Legislature(2003 - 2004)

02/24/2003 01:30 PM Senate HES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
          SENATE HEALTH, EDUCATION AND SOCIAL SERVICES                                                                        
                       STANDING COMMITTEE                                                                                     
                       February 24, 2003                                                                                        
                           1:30 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Fred Dyson, Chair                                                                                                       
Senator Lyda Green, Vice Chair                                                                                                  
Senator Gary Wilken                                                                                                             
Senator Bettye Davis                                                                                                            
Senator Gretchen Guess                                                                                                          
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                              
SENATE BILL NO. 2                                                                                                               
"An Act relating to recovery of civil damages from the parents                                                                  
or legal guardian of a minor; and providing for an effective                                                                    
date."                                                                                                                          
                                                                                                                                
     MOVED SB 2 OUT OF COMMITTEE                                                                                                
                                                                                                                                
SENATE BILL NO. 25                                                                                                              
"An Act relating to the teachers' housing loan program in the                                                                   
Alaska Housing Finance Corporation; and providing for an                                                                        
effective date."                                                                                                                
                                                                                                                                
     MOVED CSSB 25(HES) OUT OF COMMITTEE                                                                                        
                                                                                                                                
PREVIOUS ACTION                                                                                                               
                                                                                                                              
SB 2 - No previous action to consider.                                                                                          
                                                                                                                                
SB 25 - No previous action to consider.                                                                                         
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                              
Ms. Carol Comeau                                                                                                                
Superintendent of Schools, Anchorage School District                                                                            
PO Box 196614                                                                                                                   
Anchorage AK 99519                                                                                                              
POSITION STATEMENT: Supported SB 2.                                                                                           
                                                                                                                                
Mr. Jake Metcalfe                                                                                                               
Anchorage School Board                                                                                                          
Anchorage AK                                                                                                                    
POSITION STATEMENT: Supported SB 2.                                                                                           
                                                                                                                                
Ms. Debbie Ossiander, President                                                                                                 
Association of Alaska School Boards                                                                                             
PO Box 670772                                                                                                                   
Chugiak AK                                                                                                                      
POSITION STATEMENT: Supported SB 2 and SB 25.                                                                                 
                                                                                                                                
Mr. Carl Rose, Executive Director                                                                                               
Association of Alaska School Boards                                                                                             
316 W 11th St.                                                                                                                  
Juneau AK 99801                                                                                                                 
POSITION STATEMENT:  Commented on SB 2 and supported SB 25.                                                                   
                                                                                                                                
Mr. Bryan Butcher, Legislative Liaison                                                                                          
Alaska Housing Finance Corporation (AHFC)                                                                                       
Department of Revenue                                                                                                           
PO Box 101020                                                                                                                   
Anchorage AK 99510-1020                                                                                                         
POSITION STATEMENT: Commented on SB 25.                                                                                       
                                                                                                                                
Mr. Paul Kapansky, Director                                                                                                     
Mortgage Operations                                                                                                             
Alaska Housing Finance Corporation (AHFC)                                                                                       
Department of Revenue                                                                                                           
PO Box 101020                                                                                                                   
Anchorage AK 99510-1020                                                                                                         
POSITION STATEMENT:  Commented on SB 25.                                                                                      
                                                                                                                                
Mr. Daniel Fauske, Executive Director                                                                                           
AHFC                                                                                                                            
Department of Revenue                                                                                                           
PO Box 101020                                                                                                                   
Anchorage AK 99510-1020                                                                                                         
POSITION STATEMENT:  Commented on SB 25.                                                                                      
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 03-5, SIDE A                                                                                                             
Number 0001                                                                                                                     
                                                                                                                              
          SB   2-PARENT LIABILITY FOR DAMAGE BY CHILD                                                                       
                                                                                                                                
CHAIR FRED DYSON  called the Senate Health,  Education and Social                                                             
Services Standing  Committee meeting  to order  at 1:30  p.m. and                                                               
announced SB 2 to be  up for consideration. Present were Senators                                                               
Dyson, Guess, Davis and Wilken.                                                                                                 
                                                                                                                                
CHAIR DYSON,  sponsor, said he was  asked by at least  one school                                                               
district in the state to remove  the upper limit on the liability                                                               
of parents for malicious destruction  of school property by their                                                               
children. Presently, the limit is  $10,000 but, in several cases,                                                               
the cost of  damage has been higher than  that. Meanwhile, school                                                               
districts  are   already  stretched   to  meet   their  financial                                                               
obligations.                                                                                                                    
                                                                                                                                
MS.  CAROL  COMEAU,  Superintendent, Anchorage  School  District,                                                               
supported SB  2 and said  that the  penalties are very  minor for                                                               
the youth  that commit  these crimes. The  case about  the Dimond                                                               
High School  damage was  very high profile.  The court  awarded a                                                               
$158,000 judgment but it was reduced  to a total of $10,000 to be                                                               
split between  the two  juveniles. The bills  came in  at $70,000                                                               
and the district in the process  of trying to get a judgment from                                                               
the courts that is more in line with the actual costs.                                                                          
                                                                                                                                
The attitude  of the families  of youths  involved in two  out of                                                               
three cases is that they can't  know where their children are all                                                               
the time  and can't  be held  responsible for  what they  do. She                                                               
concluded:                                                                                                                      
                                                                                                                                
     We  think  that's  the  wrong  message.  We  think  the                                                                    
     message is  damaging public facilities and  not holding                                                                    
     them accountable for the damage  takes money out of the                                                                    
     classroom and  takes money away from  the instructional                                                                    
     program and it sends the  wrong message to young people                                                                    
     that these are not acceptable acts.                                                                                        
                                                                                                                                
SENATOR LYDA GREEN arrived at 1:36 p.m.                                                                                         
                                                                                                                                
MR. JAKE  METCALFE, Anchorage School  Board, supported SB  2. His                                                               
experience as  a prosecutor  leads him to  believe that  a higher                                                               
liability  limit could  have some  deterrent effects.  Last year,                                                               
about $300,000 worth of vandalism  was done. When that cost can't                                                               
be recovered,  the money  comes out  of the  district's operating                                                               
budget.                                                                                                                         
                                                                                                                                
SENATOR GREEN asked if the  minor's name is currently included in                                                               
the judgment.                                                                                                                   
                                                                                                                                
MR. METCALFE replied that he  assumed that minors' names wouldn't                                                               
be used, but initials might be.                                                                                                 
                                                                                                                                
CHAIR  DYSON  asked  him  if the  parents  could  get  bankruptcy                                                               
protection so that they would  not lose their homes, vehicles and                                                               
tools of their trade.                                                                                                           
                                                                                                                                
MR. METCALFE replied that he assumed so.                                                                                        
                                                                                                                                
CHAIR DYSON  said he assumes the  judge would be willing  to work                                                               
out  some sort  of extended  payment  plan and  maybe the  school                                                               
district could live with that.                                                                                                  
                                                                                                                                
MR.  METCALFE  responded that  he  thought  it  was the  type  of                                                               
situation where  they would work to  try and get as  much as they                                                               
could and settle it.                                                                                                            
                                                                                                                                
SENATOR GREEN asked  with the reference to  a homeowner's policy,                                                               
whether he was talking about the liability of the child.                                                                        
                                                                                                                                
MR. METCALFE replied  the parents [would be]  responsible for the                                                               
children.                                                                                                                       
                                                                                                                                
SENATOR GREEN  asked what  experience he had  with the  limits of                                                               
that kind of liability.                                                                                                         
                                                                                                                                
MR. METCALFE  replied not a  lot, adding that he  didn't practice                                                               
that kind of law.                                                                                                               
                                                                                                                                
SENATOR GREEN said  she thought it was limited  to children under                                                               
12 years of age.                                                                                                                
                                                                                                                                
SENATOR  GARY  WILKEN  said  he understood  the  purpose  of  the                                                               
legislation,  but he  was concerned  about collateral  damage and                                                               
gave the example of a middle  class family - husband and wife, 40                                                               
years  old, three  kids  - one  of them  goes  sideways and  does                                                               
something equal to the experience in Anchorage.                                                                                 
                                                                                                                                
     We've got  to absolutely  knock some heads  and $10,000                                                                    
     isn't a head knocking  to me...but $100,000 or $150,000                                                                    
     that  puts in  jeopardy  their house,  their home,  the                                                                    
     other two  kids and the  family is trying to  get along                                                                    
     and that bothers me.                                                                                                       
                                                                                                                                
The  open-endedness  of the  legislation  concerned  him, but  he                                                               
thought they  might be able  to get  the same effect  without the                                                               
downside.                                                                                                                       
                                                                                                                                
CHAIR  DYSON  responded that  bankruptcy  laws  will protect  the                                                               
family from losing their home, the  tools of their business and a                                                               
vehicle.  He added,  "So  they're  not going  to  be  out in  the                                                               
street...."                                                                                                                     
                                                                                                                                
SENATOR GRETCHEN GUESS  said she didn't see any  reference to the                                                               
child in  the legislation and  whether the  child had any  or may                                                               
have  assets  in the  future.  She  asked  if that  omission  was                                                               
intentional.                                                                                                                    
                                                                                                                                
CHAIR DYSON replied that he  didn't understand how minor children                                                               
could own  assets apart from  their parents. He  assumed whatever                                                               
the parents  could work out with  the child would be  up to them.                                                               
Under  the state  code, if  a parent  or a  legal guardian  of an                                                               
unemancipated minor under 18 has  that child run away and reports                                                               
him as a runaway, the parents are off the hook.                                                                                 
                                                                                                                                
SENATOR GREEN  asked if the child  could be named in  the future,                                                               
upon  adulthood.  She  didn't  think  that  would  be  cruel  and                                                               
unusual.                                                                                                                        
                                                                                                                                
MS.  DEBBIE OSSIANDER,  President, Association  of Alaska  School                                                               
Boards (AASB),  said this  issue is  supported by  AASB's general                                                               
membership. Many  schools had experienced vandalism  in excess of                                                               
$10,000.   Mountain Village School,  for example, had a  fire set                                                               
to cover the theft of a  soda machine and the school burned down.                                                               
Costs resulting from actions like that are a serious concern.                                                                   
                                                                                                                                
MR. CARL  ROSE, Executive Director, Association  of Alaska School                                                               
Boards, supported SB  2. He explained that the  state has varying                                                               
levels of indemnification, but all  school districts are required                                                               
to have insurance. There are  issues of deductibles, however, and                                                               
the  Anchorage  [school district],  for  one,  has a  $1  million                                                               
deductible  insurance policy.  Almost anything  under that  comes                                                               
out of  their general  fund. In  1992-1996, rural  schools across                                                               
the  state claimed  $34 million  in  losses, including  a lot  of                                                               
vandalism. Any  large loss  has a large  impact on  the insurance                                                               
market.                                                                                                                         
                                                                                                                                
CHAIR DYSON  said a question  came up about liability  for foster                                                               
parents and the law  is quite clear that as long  as the child is                                                               
a ward of the state, the parents incur no liability.                                                                            
                                                                                                                                
SENATOR GUESS asked if the state would incur those expenses.                                                                    
                                                                                                                                
CHAIR DYSON answered yes.                                                                                                       
                                                                                                                                
SENATOR  GARY WILKEN  moved  to  pass SB  2  from committee  with                                                               
individual recommendations  and the  attached fiscal  note. There                                                               
were no objections and it was so ordered.                                                                                       
                                                                                                                                
                 SB  25-AHFC LOANS TO EDUCATORS                                                                             
                                                                                                                                
CHAIR FRED DYSON said that SB 25 would be up for consideration.                                                                 
                                                                                                                                
SENATOR  GARY WILKEN  noted that  a committee  substitute labeled                                                               
23-LS0080\H, dated  2/21/03, was prepared. It  designates single-                                                               
family housing  only on line  9, and sets  out who is  covered on                                                               
lines 11  - 14.   A provider of  related services is  covered but                                                               
not  named in  the  bill, but  it  includes physical  therapists,                                                               
occupational  therapists,  speech  therapists,  librarians  or  a                                                               
school nurse  as long as  they possess one of  the state-required                                                               
certificates.                                                                                                                   
                                                                                                                                
SENATOR  WILKEN moved  to adopt  the committee  substitute. There                                                               
were no objections and it was so ordered.                                                                                       
                                                                                                                                
MR. BRIAN  BUTCHER, legislative  liaison, Alaska  Housing Finance                                                               
Corporation (AHFC), said he was present to answer questions.                                                                    
                                                                                                                                
SENATOR  LYDA GREEN  said  she  had concerns  about  the lack  of                                                               
requirements in  the bill. It  contains no requirement  that need                                                               
be established, no limit on  location, no requirement to continue                                                               
teaching, no limit  to a one-time only loan,  no first-time buyer                                                               
limitation, no age factor and no  upper limit on price. She asked                                                               
if  those things  are in  the terms  and conditions  mentioned on                                                               
page 2, paragraph (b), or whether  they have to be spelled out in                                                               
the bill.                                                                                                                       
                                                                                                                                
MR. PAUL  KAPANSKY, director, Mortgage Operations,  answered that                                                               
the department envisioned the program  would overlay its existing                                                               
programs. For  example, if the individual  borrower qualified for                                                               
the  first-time  homebuyers  program,  he  would  also  meet  the                                                               
requirements of this  program and be able to get  a loan for 100%                                                               
loan to value. It would work  the same for the veterans and rural                                                               
programs.                                                                                                                       
                                                                                                                                
SENATOR  GREEN  asked   if  there  is  any   requirement  in  the                                                               
legislation  that it  pertains to  first-time buyers  and whether                                                               
that language needs to be in statute.                                                                                           
                                                                                                                                
MR.  DANIEL  FAUSKE,  Executive Director,  AHFC,  explained  that                                                               
typically,  people  will  qualify   for  a  number  of  different                                                               
programs and  then they decide which  one they want to  use. This                                                               
bill  removes  the  need  for  a down  payment  because  a  major                                                               
impediment for  most people  when purchasing a  home is  the down                                                               
payment requirement.                                                                                                            
                                                                                                                                
He said the issue  of what to do if a  borrower quit the teaching                                                               
profession  was  discussed internally  and  it  was decided  that                                                               
would  be  very  hard  to police.  Their  rural  lending  program                                                               
requires  that a  teacher be  housed in  each one  of the  units,                                                               
whether it's a duplex or a  four-plex, and AHFC has the option of                                                               
increasing the  interest back up  to what  it would have  been if                                                               
that requirement isn't met.                                                                                                     
                                                                                                                                
SENATOR GREEN asked what the upper  limit is on the amount of the                                                               
loan.                                                                                                                           
                                                                                                                                
MR. FAUSKE  replied that depends on  what a person can  afford to                                                               
borrow.                                                                                                                         
                                                                                                                                
SENATOR  BETTYE  DAVIS  asked  if land  had  been  identified  in                                                               
various areas where these houses could be built.                                                                                
                                                                                                                                
MR.  FAUSKE replied  that  they hadn't  envisioned  this bill  as                                                               
covering going out and building homes.                                                                                          
                                                                                                                                
SENATOR  DAVIS  asked  if  he   was  saying  that  land  was  too                                                               
expensive.                                                                                                                      
                                                                                                                                
MR.  FAUSKE  elaborated  that  he was  working  with  the  Denali                                                               
Commission  and  the  U.S.  Department  of  Agriculture  to  find                                                               
available  funding  for  land,  but   one  has  to  consider  the                                                               
infrastructure that  is needed for  development as well  and that                                                               
is a factor in many rural areas.                                                                                                
                                                                                                                                
SENATOR WILKEN  asked if this  is a  one-time only bill.  He gave                                                               
the  example of  a  teacher moving  to Fort  Yukon  to teach  and                                                               
buying  a home  under  this  bill and  then  moving  to teach  in                                                               
Fairbanks. He wanted  to know if he would have  to use the assets                                                               
built up on the first loan to finance the new one.                                                                              
                                                                                                                                
MR. FAUSKE replied that he thought  that teacher would be able to                                                               
use this program again.                                                                                                         
                                                                                                                                
SENATOR  GREEN said  she didn't  think  a person  would have  any                                                               
equity in two years with a "no-down."                                                                                           
                                                                                                                                
MR. FAUSKE agreed.                                                                                                              
                                                                                                                                
MS.  OSSIANDER  said  the  AASB's top  priorities  are  fair  and                                                               
equitable  funding  and  providing  ways  to  help  with  teacher                                                               
recruitment  and retention.  At its  meeting yesterday,  the AASB                                                               
unanimously supported this bill.                                                                                                
                                                                                                                                
MR. ROSE indicated his support also.                                                                                            
                                                                                                                                
SENATOR WILKEN moved to pass CSSB 25(HES), version 23-LS0080\H,                                                                 
from committee with individual recommendations. There were no                                                                   
objections and it was so ordered.                                                                                               
                                                                                                                                
CHAIR DYSON adjourned the meeting at 2:15 p.m.                                                                                  

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