Legislature(2003 - 2004)

05/09/2003 02:00 PM Senate JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE JUDICIARY STANDING COMMITTEE                                                                             
                          May 9, 2003                                                                                           
                           2:00 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Senator Ralph Seekins, Chair                                                                                                    
Senator Scott Ogan, Vice Chair                                                                                                  
Senator Gene Therriault                                                                                                         
Senator Hollis French                                                                                                           
MEMBERS ABSENT                                                                                                                
Senator Johnny Ellis                                                                                                            
COMMITTEE CALENDAR                                                                                                            
CS FOR HOUSE BILL NO. 214(JUD)                                                                                                  
"An Act relating  to the recovery of punitive  damages against an                                                               
employer who is  determined to be vicariously liable  for the act                                                               
or  omission  of an  employee;  and  providing for  an  effective                                                               
     MOVED SCS CSHB 214(JUD) OUT OF COMMITTEE                                                                                   
HOUSE BILL NO. 224                                                                                                              
"An Act  relating to a tobacco  product manufacturer's compliance                                                               
with  certain statutory  requirements regarding  cigarette sales;                                                               
and providing for an effective date."                                                                                           
     MOVED HB 224 OUT OF COMMITTEE                                                                                              
SENATE BILL NO. 203                                                                                                             
"An  Act   relating  to  certain  administrative   hearings;  and                                                               
establishing the  office of administrative hearings  and relating                                                               
to that office."                                                                                                                
     HEARD AND HELD                                                                                                             
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                                                               
     MOVED CSSB 2(JUD) OUT OF COMMITTEE                                                                                         
SENATE JOINT RESOLUTION NO. 3                                                                                                   
Proposing amendments to  the Constitution of the  State of Alaska                                                               
relating to an appropriation limit and a spending limit.                                                                        
     HEARD AND HELD                                                                                                             
PREVIOUS ACTION                                                                                                               
HB 214 - See Labor and Commerce minutes dated 4/29/03 and                                                                       
     5/1/03. See Judiciary minutes dated 5/6/03 and 5/8/03.                                                                     
HB 224 - See Judiciary minutes dated 5/6/03.                                                                                    
SB 203 - See State Affairs minutes dated 5/6/03.                                                                                
SB 2 - See HESS minutes dated 2/24/03 and Judiciary minutes                                                                     
     dated 3/17/03 and 3/19/03.                                                                                                 
SJR 3 - See Judiciary minutes dated 3/19/03.                                                                                    
WITNESS REGISTER                                                                                                              
Ms. Sara Nielson                                                                                                                
Staff to Representative Samuels                                                                                                 
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Comment on HB 214.                                                                                        
Mr. Ben Brown                                                                                                                   
Alaska State Chamber of Commerce                                                                                                
Juneau, AK 99801                                                                                                                
POSITION STATEMENT: Supported HB 214.                                                                                         
Mr. Mike Barnhill                                                                                                               
Assistant Attorney General                                                                                                      
Commercial Section                                                                                                              
Department of Law                                                                                                               
PO Box 110300                                                                                                                   
Juneau, AK  99811-0300                                                                                                          
POSITION STATEMENT: Supported HB 224.                                                                                         
Mr. Dave Stancliff                                                                                                              
Regulation Review Committee                                                                                                     
c/o Senator Therriault                                                                                                          
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Commented on SB 203.                                                                                      
Mr. Andy Hemenway                                                                                                               
Hearing Officer                                                                                                                 
Department of Administration                                                                                                    
PO Box 110200                                                                                                                   
Juneau, AK  99811-0200                                                                                                          
POSITION STATEMENT: Commented on SB 203.                                                                                      
Senator Fred Dyson                                                                                                              
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Sponsor of SB 2.                                                                                          
Mr. Larry Wigit                                                                                                                 
Executive Director of Public Affairs                                                                                            
Anchorage School District                                                                                                       
Anchorage, AK 99513                                                                                                             
POSITION STATEMENT: Commented on SB 2.                                                                                        
ACTION NARRATIVE                                                                                                              
TAPE 03-43, SIDE A                                                                                                            
           HB 214-PUNITIVE DAMAGES AGAINST EMPLOYERS                                                                        
VICE  CHAIR  SCOTT  OGAN called  the  Senate  Judiciary  Standing                                                             
Committee meeting  to order  at 2:00  p.m. Present  were Senators                                                               
French  and  Therriault. The  first  order  of business  to  come                                                               
before the committee was HB 214, version Q.                                                                                     
MS.  SARA NIELSON,  staff to  Representative Samuels,  offered an                                                               
proposed  amendment  that has  language  from  the VECO  case  to                                                               
define a managerial agent.                                                                                                      
SENATOR FRENCH said  he worked with the sponsor  on this language                                                               
and moved to  adopt amendment 1. There were no  objections and it                                                               
was so ordered.                                                                                                                 
MR. BEN  BROWN, Alaska  State Chamber  of Commerce,  supported HB
214. "It's  not fair  for employers to  be saddled  with punitive                                                               
damages  for  actions  of their  employees  that  are  completely                                                               
outside the scope of employment...."                                                                                            
2:04 - 2:05 p.m. - at ease                                                                                                      
SENATOR THERRIAULT  moved to pass  SCSHB 214(JUD)  from committee                                                               
with  individual  recommendations  and the  two  attached  fiscal                                                               
notes. There were no objections and it was so ordered.                                                                          
2:06 - 2:07 p.m. - at ease                                                                                                      
              HB 224-CIGARETTE SALES REQUIREMENTS                                                                           
VICE CHAIR OGAN announced HB 224 to be up for consideration.                                                                    
MR. MIKE  BARNHILL, Assistant  Attorney General,  said this  is a                                                               
bill  that  enhances the  state's  ability  to enforce  its  non-                                                               
participating  manufacturer  escrow requirements  protecting  the                                                               
revenue  stream  the  state  gets  under  the  Master  Settlement                                                               
SENATOR  THERRIAULT moved  to  pass HB  224  from committee  with                                                               
attached  fiscal  notes  with individual  recommendations.  There                                                               
were no objections and it was so ordered.                                                                                       
2:10 - 2:11 p.m. - at ease                                                                                                      
            SB 203-OFFICE OF ADMINISTRATIVE HEARINGS                                                                        
VICE CHAIR OGAN announced SB 203 to be up for consideration.                                                                    
MR. DAVE  STANCLIFF, Regulation Review Committee,  said the basic                                                               
goals of SB 203 are to set up  a model that will grow and provide                                                               
more  efficient   and  fair  hearings   for  those   who  require                                                               
adjudications in the state administrative process.                                                                              
Secondly,  it  sets  up standards  and  protections  for  hearing                                                               
officers  statewide. Since  the  officers work  for the  agencies                                                               
that promulgate  and enforce the regulations,  a more independent                                                               
approach  is  in  order  and this  bill  provides  protection  to                                                               
hearing  officers  from agency  influence  from  both inside  and                                                               
outside the central  model - and influence  from the legislature.                                                               
It  also  establishes  a  higher  standard  of  conduct  for  the                                                               
In  effect, a  model is  created and  outside that  model, people                                                               
have a more independent status.                                                                                                 
Last, the bill establishes a time  limit for people who have been                                                               
caught up  in the  adjudication process for  years. He  said they                                                               
have  worked  extensively  with administration,  legislators  and                                                               
VICE-CHAIR OGAN said  that all three powers are  under one branch                                                               
of government -  the power to carry forth  the laws, investigate,                                                               
prosecute and adjudicate.                                                                                                       
MR.  STANCLIFF commented  that  judges are  sworn  to uphold  the                                                               
administrative  law   until  they   are  given   the  independent                                                               
standards of conduct that due process calls for.                                                                                
CHAIR SEEKINS arrived at 2:13 p.m.                                                                                              
SENATOR   THERRIAULT  asked   Mr.  Stancliff   to  go   over  the                                                               
MR.  STANCLIFF passed  the amendments  out to  the committee  and                                                               
stated  that at  every  step  of the  way  they  worked with  the                                                               
administration in consideration of  any changes in the amendments                                                               
and that they had been extremely productive and cooperative.                                                                    
The  first  amendment on  page  3,  line  15, is  a  housekeeping                                                               
amendment;  amendment  2  on  page 8,  line  1,  is  substantive.                                                               
Currently, a hearing officer has 90  days after the date the case                                                               
is  assigned  to  prepare  a  proposed  decision.  However,  they                                                               
realized that  if the  agency didn't  cooperate with  the hearing                                                               
officer, he  might not get  the material  needed to even  get the                                                               
hearing  going within  90 days  so it  was changed  to 120  days.                                                               
However, they deleted line 7 on page 8, which says:                                                                             
     If  the proposed  decision is  not  timely issued,  the                                                                    
     agency decision that  is subject to the  hearing is the                                                                    
     final  agency  decision  and  a  party  requesting  the                                                                    
     hearing may appeal straight to Superior Court.                                                                             
It  sounds  good  in  principal,  but it  doesn't  work  well  in                                                               
practice for  two reasons.  The first reason  is, if  the hearing                                                               
isn't  even  conducted, all  of  a  sudden  the only  record  the                                                               
petitioner has to build their case on  is a bad record or none at                                                               
all. The  administration asked for  the leeway to trust  that the                                                               
new model would work properly and to delete that type of hammer.                                                                
On page  8, line 21,  it says the  hearing officer will  have 120                                                               
days and then submits the  hearing to the commissioner or agency.                                                               
The commissioner  would have  30 days to  decide whether  to take                                                               
action  or  not. That  bar  has  been  raised  so that  when  the                                                               
commissioner takes action,  they have to very  explicitly say why                                                               
and make it a matter of  the public record - something that isn't                                                               
necessarily occurring  now. Also, currently, if  the commissioner                                                               
remands the case  back to the agency, it doesn't  say how long it                                                               
can stay there, which has been a  problem. So, he fixed a time of                                                               
60  days starting  from the  time the  hearing officer  hears and                                                               
proposes the decision. Within that  60 days, the commissioner has                                                               
up to 30  of them to decide what  to do or to do  nothing; and if                                                               
it's remanded back, there's an  additional 30 days for the agency                                                               
to  complete and  issue a  final  decision. That  puts the  total                                                               
clock under this amendment at 182 days.                                                                                         
MR.  STANCLIFF said  he contacted  Judge Belcher  in Colorado,  a                                                               
nationally recognized  expert, on  what he  felt was  the outside                                                               
time his central panel ever had  to use and he answered 180 days.                                                               
"So,  we're in  line  with  a model  that  is  working very  well                                                               
nationally   and  the   administration  has   every  option   and                                                               
flexibility within this model to speed parts of it up..."                                                                       
The new  model has a requirement  to keep good records,  but they                                                               
accidentally asked  them to  keep records of  not only  what they                                                               
do, but  records of whatever  the agency  does, too. This  is not                                                               
only  duplicative,  but  it's  going to  make  them  into  record                                                               
keepers  rather than  processors  and  adjudicators. Amendment  3                                                               
clarifies that.                                                                                                                 
SENATOR THERRIAULT moved to adopt  the three amendments, S.2, S.3                                                               
and S.4,  as one amendment. There  were no objections and  it was                                                               
so ordered.                                                                                                                     
                      A M E N D M E N T 1                                                                                   
OFFERED IN THE SENATE                                                                                                           
     TO:  CSSB 203(STA)                                                                                                         
Page 3, line 15, following "year":                                                                                              
     Insert "the results of the survey along with"                                                                              
                      A M E N D M E N T 2                                                                                   
OFFERED IN THE SENATE                                                                                                           
     TO:  CSSB 203(STA)                                                                                                         
Page 8, line 1:                                                                                                                 
     Delete "immediately"                                                                                                       
     Insert ", within two working days,"                                                                                        
Page 8, lines 4 - 5:                                                                                                            
     Delete "within 90 days after the date a case is assigned                                                                   
for hearing"                                                                                                                    
     Insert "within 120 days after the date the agency received                                                                 
the request for a hearing"                                                                                                      
Page 8, lines 7 - 10:                                                                                                           
     Delete "If the proposed decision is not timely issued, the                                                                 
agency decision that  is the subject of the hearing  is the final                                                               
agency decision and  the party requesting the  hearing may appeal                                                               
from  that  decision  to  the  superior  court  or  as  otherwise                                                               
provided by law for appeals of final agency decisions."                                                                         
     Insert "The hearing officer shall immediately submit the                                                                   
proposed decision to the agency."                                                                                               
Page 8, line 21, following "proceedings;":                                                                                      
     Insert "the hearing officer shall complete the additional                                                                  
work on  the case  and return   it to the  agency within  60 days                                                               
after  the date  the original  proposed decision  of the  hearing                                                               
officer was submitted to the agency by the hearing officer;"                                                                    
                      A M E N D M E N T 3                                                                                   
OFFERED IN THE SENATE                                                                                                           
     TO:  CSSB 203(STA)                                                                                                         
Page 9, lines 24 and 25:                                                                                                        
     Delete all material.                                                                                                       
     Insert   "acquire   and   organize   records   relating   to                                                               
administrative hearings of the office.   The records must include                                                               
Page 9, line 28, following "records.":                                                                                          
     Insert "The records shall be made available to the public."                                                                
MR. STANCLIFF  noted a letter  from the Disability Law  Center of                                                               
Alaska that brought to their  attention that federal law requires                                                               
that  a state  educational  agency or  a  local education  agency                                                               
conduct the  hearings under their  particular statutes  having to                                                               
do with  children with disabilities  as it applies  to education.                                                               
However, they said they would be  willing to work with him to see                                                               
if by keeping them in this  bill, they rub up against the federal                                                               
statute. He said they would work  with the AG's office to correct                                                               
that if it is a problem.                                                                                                        
SENATOR  FRENCH  asked  what happens  when  the  hearing  officer                                                               
doesn't return the  decision within a specified  time. Could they                                                               
go to court?                                                                                                                    
MR.  STANCLIFF responded  that the  amendment  they just  adopted                                                               
removes the provision to go to court.                                                                                           
SENATOR FRENCH asked if there was  any time frame for them to get                                                               
through before being able to go to court.                                                                                       
MR. STANCLIFF answered there is not.                                                                                            
SENATOR  FRENCH asked  whether PFD  disputes are  in this  act or                                                               
whether they stand alone.                                                                                                       
MR. ANDY HEMENWAY, Department  of Administration Hearing Officer,                                                               
answered the PFD hearings will not be under this act.                                                                           
SENATOR FRENCH asked about fishery laws and regulations.                                                                        
MR. STANCLIFF said  they will not be  in administrative hearings.                                                               
The RCA  is not  included and  neither are  oil and  gas taxation                                                               
issues. The idea is if the  model works well, it could eventually                                                               
evolve to be the total clearing house.                                                                                          
Only one  category of taxation  relates to  oil and gas,  the oil                                                               
and gas property tax  on page 5, lines 12 & 13,  of the CS, which                                                               
are  presently  being  heard  by a  hearing  officer  within  the                                                               
Department of Revenue.                                                                                                          
     There are  two types  of issues  that arise  under that                                                                    
     statute. One  type is  whether or  not the  property in                                                                    
     question is  in fact  taxable property for  purposes of                                                                    
     those  statutes.  Those  questions  would  go  to  this                                                                    
     central panel  [by a hearing officer  in the Department                                                                    
     of Revenue].                                                                                                               
     The other  question that arises under  those provisions                                                                    
     of law is  how much is the property worth,  what is the                                                                    
     amount of the tax.  Those issues under current practice                                                                    
     are  decided  by  the State  Assessment  Review  Board,                                                                    
     which  is   essentially  a   collection  of...municipal                                                                    
     assessors,  basically....Those  cases   are  now  being                                                                    
     conducted  by  that  board, not  by  hearing  officers.                                                                    
     They're  not  delegated  out   and  under  the  current                                                                    
     legislation...they  would continue  to be  conducted by                                                                    
     the State Assessment Review Board.                                                                                         
SENATOR FRENCH asked if he knew  how long it takes to get through                                                               
the system now.                                                                                                                 
MR.  STANCLIFF replied  they provided  a full  report that  lists                                                               
every hearing function  and how long they  have taken previously.                                                               
He said that the new  officers would not be classified employees,                                                               
but they  would be  partially exempt and  have the  same guidance                                                               
that Division  of Election employees  have under AS  39. However,                                                               
they cannot be summarily removed.                                                                                               
SENATOR FRENCH asked  if this sets a 90-day  drop-dead period for                                                               
resolving the hearings.                                                                                                         
MR. STANCLIFF replied no longer  and that the amendment they just                                                               
adopted  gives 120  days  to  the hearing  officer  to produce  a                                                               
product  and 180  days total  from  the time  someone requests  a                                                               
hearing that the agency has to provide a final decision.                                                                        
SENATOR  FRENCH asked  if any  hearing  bodies were  consistently                                                               
exceeding that period of time.                                                                                                  
MR. STANCLIFF said  there is a list  in excess of 50  - 100 cases                                                               
that won't even get  heard for a year or more.  He said there are                                                               
horror stories, but this bill is not targeting those.                                                                           
SENATOR FRENCH  asked if  someone that has  a grievance  and goes                                                               
into a  hearing officer, but  has nothing  happen in 180  days is                                                               
automatically shunted off to court.                                                                                             
MR. STANCLIFF  replied there  is no automatic  shunt, but  a case                                                               
could be  made with a competent  attorney to the courts  that the                                                               
deadline was exceeded.                                                                                                          
MR.  HEMENWAY  added  that  there   is  some  concern  about  the                                                               
consequence of having the ability  to go straight into court with                                                               
a "half baked" record.                                                                                                          
     The  intent is  that  the chief  hearing officer  would                                                                    
     create internal  guidelines to govern how  long will it                                                                    
     take  to process  cases from  each different  agency so                                                                    
     you can establish appropriate time  frames for any type                                                                    
     of case  that might come  along and that those  will be                                                                    
     included in the performance  evaluation for the hearing                                                                    
     officers. The intent here  is...to make the consequence                                                                    
     appropriately considered  in the personnel  process for                                                                    
     the  hearing officer  since they  are the  ones charged                                                                    
     with getting the work done in a timely manner.                                                                             
CHAIR SEEKINS said  he would hold the bill  for further testimony                                                               
in future meetings.                                                                                                             
          SB   2-PARENT LIABILITY FOR DAMAGE BY CHILD                                                                       
CHAIR SEEKINS announced SB 2 to be up for consideration.                                                                        
2:40 p.m.                                                                                                                     
SENATOR DYSON,  sponsor of SB  2, said his school  district asked                                                               
that the legislature remove the  liability limit on parents - the                                                               
present one is $10,000 - to allow them to recover more damages.                                                                 
SENATOR OGAN  moved to adopt  version W of  SB 2, as  the working                                                               
SENATOR FRENCH objected for purposes of discussion.                                                                             
SENATOR  DYSON said  that  SB 2  clears up  the  fact that  legal                                                               
guardians are not  held liable if they  accept the responsibility                                                               
of  being legal  guardian  for a  child that  is  not their  own.                                                               
Adoptive  parents of  hard-to-place  children are  also not  held                                                               
liable.  Foster parents  are not  held responsible  currently for                                                               
acts incurred by the kids.                                                                                                      
SENATOR  OGAN said  the district  could  sue the  student of  the                                                               
parent, but  invariably they go  after the parent because  of the                                                               
perception that they have deeper  pockets. They have tried to get                                                               
the  child to  reimburse the  parents with  use of  his Permanent                                                               
Fund Dividend, but  couldn't find a good  mechanism for attaching                                                               
the present  or future wealth of  a child. Even good  parents can                                                               
have bad  kids who could do  enough damage to something  that the                                                               
parents could become  impoverished for life. When the  kid is 18,                                                               
they get their  record washed clean according to  Alaska law, but                                                               
the parent has possibly been ruined.                                                                                            
SENATOR DYSON said  he thinks he is exaggerating,  because no one                                                               
gets ruined  for life by  incurring debt. That's  what bankruptcy                                                               
laws are  set up for.  If you don't  let the parent  reimburse to                                                               
the extent that  they are able, then  you say to the  rest of the                                                               
people  in the  community that  they get  the responsibility  for                                                               
paying for the damage a kid they had no control over did.                                                                       
SENATOR OGAN said he understands what  he is trying to do, but an                                                               
unlimited amount is too much.                                                                                                   
SENATOR DYSON  responded the version  coming over from  the House                                                               
has a limit of $15,000.                                                                                                         
CHAIR SEEKINS asked if he  knows if any schools carried vandalism                                                               
insurance and what deductible they have.                                                                                        
MR. LARRY  WIGIT, Executive  Director, Public  Affairs, Anchorage                                                               
School District, said  they are self-insured which  means that it                                                               
would come out of their operating budget.                                                                                       
CHAIR SEEKINS  asked if they  have a  reserve set aside  for this                                                               
type of thing.                                                                                                                  
MR.  WIGIT replied  that  they  are required  by  law  to keep  a                                                               
minimum amount of money for  maintenance. Depending on the issue,                                                               
several million dollars would be available.                                                                                     
SENATOR  OGAN  asked  if  there  was a  reason  they  don't  have                                                               
MR.  WIGIT replied  that even  if  they did  have insurance,  the                                                               
premiums  would come  from monies  that could  be used  for other                                                               
TAPE 03-43, SIDE B                                                                                                            
SENATOR DYSON  said he is  willing to work with  Senators Seekins                                                               
and  Ogan  on  their  concerns,  one of  which  is  the  lack  of                                                               
accountability for kids within the school system.                                                                               
MR. WIGIT said that they have some insurance, but [indisc].                                                                     
SENATOR FRENCH  asked if there are  legal steps a child  can take                                                               
to become emancipated.                                                                                                          
SENATOR DYSON replied  a child could go to court  and apply to be                                                               
CHAIR SEEKINS  said he supports the  concept in the bill,  but at                                                               
the same  time, he worries about  what we're doing as  a state to                                                               
support parents who  want to keep kids from doing  those kinds of                                                               
SENATOR DYSON said he agrees  with Senators Seekins and Ogan, but                                                               
he hopes  they will not  hold up action  on this bill  while they                                                               
await their solution.                                                                                                           
CHAIR  SEEKINS  said   he  would  not  want   to  make  liability                                                               
limitless. He asked  if it was improper under current  law to put                                                               
a dollar  judgment on a minor  and do they have  the authority to                                                               
change  that. He  thought that  if a  minor child  could be  held                                                               
responsible for  murder then they  could be held  responsible for                                                               
paying back part of a debt they incur.                                                                                          
SENATOR FRENCH moved a conceptual  amendment to reinsert language                                                               
on page 1, line  14, and page 2, line 1  "not to exceed $25,000".                                                               
There was no objection and it was so ordered.                                                                                   
SENATOR  OGAN  moved  to  pass   CSSB  2(JUD),  version  W,  from                                                               
committee with the  fiscal note and asked  for unanimous consent.                                                               
There was no objection and it was so ordered.                                                                                   
         SJR  3-CONST AM: APPROPRIATION/SPENDING LIMIT                                                                      
CHAIR SEEKINS announced SJR 3 to be up for consideration.                                                                       
SENATOR DYSON, sponsor of SJR 3,  said he served six years on the                                                               
Anchorage  Assembly and  saw  a  tax cap  limit  there work  very                                                               
effectively.  It  allowed  the  tax revenues  to  expand  as  the                                                               
population  and  CPI  expanded and  allowed  for  voter  approved                                                               
projects. The  bill before  them doesn't  limit taxes;  it limits                                                               
spending. It limits  it to something like the same  sort of thing                                                               
-  the  growth, inflation  and  the  things  that are  outside  a                                                               
general fund budget.                                                                                                            
He   received   a   proposed  committee   substitute   from   the                                                               
administration, version  D, that  significantly expands  the list                                                               
of items that  are not under the cap, but  he wants the committee                                                               
to  confine  itself  to  discussing   the  appropriateness  of  a                                                               
constitutional cap  and then send  it on  to Finance to  hash out                                                               
the items.                                                                                                                      
CHAIR  SEEKINS said  he finds  that  there are  16 other  states,                                                               
including    Alaska,   that    already   have    an   ineffectual                                                               
constitutional spending limit.                                                                                                  
SENATOR  OGAN said  one  loophole to  get around  a  vote of  the                                                               
people is  through lease purchase options,  which the Legislature                                                               
did  previously with  courthouses. He  thinks there  should be  a                                                               
definition of  a lease purchase,  although he isn't sure  this is                                                               
where it should be.                                                                                                             
He is also  concerned that the four percent per  year is a little                                                               
high and  wants some  spreadsheets on what  that would  amount to                                                               
every year.                                                                                                                     
SENATOR  DYSON  said the  D  version  outlines (instead  of  four                                                               
percent) an average of the  CPI and population growth, which ends                                                               
up  being,  with a  2.5  percent  population  growth and  a  four                                                               
percent CPI, an expansion of 3.25 percent.                                                                                      
SENATOR  FRENCH asked  what effect  it  would have  had on  state                                                               
spending  if this  had been  in place  at the  time of  the state                                                               
CHAIR  SEEKINS said  he is  concerned  about what  they could  do                                                               
SENATOR DYSON argued  that we have had  a constitutional spending                                                               
limit in place since 1981 and  it hasn't been challenged, but the                                                               
question  is whether  it's appropriate.  His  preference is  that                                                               
they  pass something  like  the  A version  and  let the  Finance                                                               
Committee deal with suggestions from  the administration in the D                                                               
SENATOR OGAN said he doesn't  see language that repeals the other                                                               
constitutional spending limit, which hasn't been challenged.                                                                    
SENATOR FRENCH pointed out that it's in the A version.                                                                          
SENATOR  OGAN said  the existing  spending limit  is ignored.  He                                                               
wonders whether  future Legislatures will  ignore it, if  this is                                                               
put into law.                                                                                                                   
CHAIR SEEKINS said he would hold the bill for further                                                                           
information and discussion. There being no further business to                                                                  
come before the committee, he adjourned the meeting at 3:20 p.m.                                                                

Document Name Date/Time Subjects