Legislature(1993 - 1994)
02/23/1994 01:40 PM Senate JUD
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE JUDICIARY COMMITTEE
February 23, 1994
1:40 p.m.
MEMBERS PRESENT
Senator Robin Taylor, Chairman
Senator George Jacko
Senator Dave Donley
Senator Suzanne Little
MEMBERS ABSENT
Senator Rick Halford, Vice-Chairman
OTHERS PRESENT
Senator Randy Phillips
Representative Jerry Mackie
COMMITTEE CALENDAR
SENATE BILL NO. 164
"An Act relating to municipal incorporation, reclassification, and
dissolution."
HOUSE BILL NO. 4
"An Act adding as an aggravating factor at sentencing that a victim
was elderly or disabled; and relating to failure to report harm or
assaults of the elderly or disabled."
SENATE BILL NO. 225
"An Act relating to credits against certain insurance taxes for
contributions to certain educational institutions; and providing
for an effective date."
SENATE BILL NO. 190
"An Act relating to income withholding and other methods of
enforcement for orders of support; and providing for an effective
date."
PREVIOUS SENATE COMMITTEE ACTION
SB 164 - See Community & Regional Affairs minutes dated
3/30/93, 4/13/93, 4/20/93, 4/22/93 and 4/24/93.
HB 4 - See HESS minutes dated 4/21/93.
SB 225 - See Health, Education & Social Service minutes
dated 2/2/94 and 2/4/94.
SB 190 - NO PREVIOUS ACTION.
WITNESS REGISTER
Darroll Hargraves, Chairman
Local Boundary Commission
333 W. 4th Avenue, Suite 220
Anchorage, Alaska 99501-2341
POSITION STATEMENT: Supports SB 164.
Dan Bockhorst, Staff
Local Boundary Commission
333 W. 4th Avenue, Suite 220
Anchorage, Alaska 99501-2341
POSITION STATEMENT: Supports SB 164.
Nancy Weller, Aide
Representative Jerry Mackie
State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Testified on HB 4.
Carol Carroll, Aide
Senator Jay Kerttula
State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Testified on SB 225.
Sherie Steele
Sheldon Jackson College
801 Lincoln
Sitka, Alaska 99835
POSITION STATEMENT: Supports SB 225.
Wendy Redman, Vice-President
for University Relations
University of Alaska
910 Yukon Drive
Fairbanks, Alaska 99775-2388
POSITION STATEMENT: Supports SB 225.
Laraine Derr, Deputy Commissioner
Department of Revenue
P.O. Box 110400
Juneau, Alaska 99811-0400
POSITION STATEMENT: Testified on SB 190.
Mary Gay, Director
Child Support Enforcement Division
550 W. 7th, 4th Floor
Anchorage, Alaska 99501-3556
POSITION STATEMENT: Supports SB 190
Terri Lauterbach, Attorney
Legislative Legal Counsel
Legislative Affairs Agency
130 Seward Street
Juneau, Alaska 99801
POSITION STATEMENT: Drafted CSSB 190.
ACTION NARRATIVE
TAPE 94-12, SIDE A
Number 001
CHAIRMAN ROBIN TAYLOR called the Judiciary Committee meeting to
order at 1:40.
SENATOR TAYLOR introduced SB 164 (MUNICIPAL INCORPORATION-
RECLASSIFICATION-DISSOLUTION), sponsored by the Senate Community &
Regional Affairs Committee chaired by SENATOR RANDY PHILLIPS, and
invited him to testify. SENATOR PHILLIPS deferred to DARROLL
HARGRAVES, Chairman of the Local Boundary Commission.
SENATOR TAYLOR announced there was a work draft for a committee
substitute for SB 164, and he called on MR. HARGRAVES, who
introduced two members and a staff person present from the Local
Boundary Commission: TONI SALMEIER from Anchorage, FRANCES HALLGREN
from Sitka, and Commission Staff, DAN BOCKHORST.
MR. HARGRAVES began by urging the legislature to pass the bill this
year, and he praised the hard work by sponsors and staff. He
explained the bill makes some technical amendments to the law that
are needed by the boundary commission and are detailed on pages 38
and 39 of this year's report from the commission.
Number 058
MR. HARGRAVES reviewed the main provisions in the bill beginning
with (1) Establishes mechanism for first class and home rule cities
to reclassify as second class cities. (2) Provides State oversight
concerning all municipal reclassification. He gave some examples
of the need for this provision. (3) Permits direct incorporation
of home rule cities and unified municipalities, and confirms that
home rule cities and home rule boroughs may be created through
merger and consolidation. (4) Confirms the discretion of the Local
Boundary Commission in approving, denying or amending petitions.
(5) Confirms that the Local Boundary Commission has legislative
authority to adopt regulations for incorporation and dissolution.
MR. HARGRAVES explained it was vital to have the legislation
because of events that will be coming forth in the next few months.
He called attention to the work draft, Section 22 on page 8, to
suggest a change to Sec. 29.06.520 by deleting TO ASSETS AND
LIABILITIES. and leave the title as SUCCESSION. He explained the e
section dealt with quite a few "rights, powers, and duties."
SENATOR TAYLOR asked for a motion to adopt for discussion purposes
the proposed committee substitute prepared by the Judiciary
Committee.
Number 104
SENATOR DONLEY asked for an assessment of the differences in the
work draft with the original SB 164. MR. HARGRAVES asked that MR.
BOCKHORST from the boundary commission staff reference the changes.
MR. BOCKHORST explained the difference between the Judiciary work
draft and the CS FOR SENATE BILL NO. 164(CRA) is the addition of
Section 22 on page 8. He further explained Section 22 restores
some language that was in the statute in 1988, prior to a change in
the law that was to make it easier for certain dissolutions to
occur.
MR. BOCKHORST continued to explain the powers, duties, rights had d
been eliminated from the section, which, he thought created some
unintended circumstances, where the state or successor municipality
could be burdened with the responsibility of paying off debts, but
may not have the power, the right, or the duty to collect revenues
to pay those debts.
SENATOR DONLEY questioned the difference between the powers and
duties when a municipality down grades from a first class to a
second class. He asked if the municipality down grades, do they
keep the same powers, duties, and rights, and why would they down
grade?
MR. BOCKHORST explained Section 22 deals only with dissolution and
has nothing to do with reclassification from first to second class
status.
SENATOR DONLEY suggested a municipality could dissolve and be
recreated as a second class entity. He thought the municipality
would be recreated with all of the rights, powers, and duties as
when they were a first class.
Number 156
MR. BOCKHORST continued to explain Section 22 only applies to a
dissolution, and he reiterated the state of Alaska or another
municipal government is going to be burdened with the assets and
liabilities.
MR. BOCKHORST claimed the language suggests, that if the State or
another municipal government is going to be burdened with the
liabilities of a dissolved government, then the successor needs to
have the powers, duties, and rights owned by the former municipal
government in order to collect revenues and pay off the debts.
MR. BOCKHORST said reclassification was a separate issue, and under
current law, if a first class city wanted to reclassify to second
class status, there is no direct way to do so. He used the cities
of Dillingham and Galena as an example of first class cities in an
unorganized borough, both operate school districts. He said there
was an interest, because of the financial burden faced by the
communities to provide schools, or to dissolve or reclassify into
second class status. If they dissolved under the present system
the responsibility for education would be transferred to the State
of Alaska to be operated as a school district under the regional
education attendance area system.
SENATOR LITTLE said the city of Seldovia has been used as an
example in the backup material, and she posed the hypothetical that
Seldovia has petitioned to dissolve. If the Kenai Peninsula
Borough refused to establish a service area to take care of the
services previously accepted by the city of Seldovia, she asked how
the bill would influence that situation.
Number 202
MR. BOCKHORST explained if, under Section 22, the Kenai Peninsula
Borough refused to act as a successor to a dissolved city of
Seldovia, the law as it currently exists says all those assets and
liabilities will be transferred from Seldovia to the State of
Alaska. Without the language in Section 22, he further explained
the state gets saddled with debt without the assets to collect
taxes to pay for Seldovia's obligation bonds.
SENATOR LITTLE clarified that Section 22 would allow the state to
assume the rights, powers, and duties for Seldovia. MR. BOCKHORST
said she was correct, and he further explained what happened when
these powers were eliminated in the 1988 law. He said Section 22
was restorative language in the statute that existed previously.
In a discussion with MR. BOCKHORST, SENATOR LITTLE received some
historical information on the proposed changes and on the expressed
statutory authority for the state to continue to levy taxes
previously levied by Seldovia.
SENATOR TAYLOR picked up on the hypothetical of Seldovia where the
borough succeeded to Seldovia's assets, and added the factors of
the borough having limited powers and Seldovia being a home rule
city with general powers. He quoted SENATOR DONLEY'S question if
the borough would inherit through Section 22 those powers which it
doesn't otherwise have, or would it only be to the extent that it
impacts rights, powers, and duties needed regarding liabilities.
He gave the example of a police department in Seldovia and no
police authority in the Kenai Peninsula Borough.
There was a short discussion among the committee members with MR.
BOCKHORST on what Section 22 really says. MR. BOCKHORST explained
in the dissolution process there would have to be a transition plan
prepared, and the borough would be required to establish a service
area to assume the powers and duties of Seldovia.
Number 255
SENATOR LITTLE said she was hopeful Seldovia would not dissolve
itself.
SENATOR DONLEY asked SENATOR PHILLIPS whether he thought Section 22
was a good amendment, and SENATOR PHILLIPS said it was done in a
draft after leaving his committee. SENATOR DONLEY also asked why
the provisions in Section 22 were taken out in 1988.
MR. BOCKHORST thought it was because the Local boundary Commission
denied the petition for the dissolution of the city of Akiachak
using the law as written prior to the 1988 amendments. He said, at
that time, REPRESENTATIVE LYMAN HOFFMAN prepared a series of
amendments to eliminate what was perceived as road blocks causing
the commission to deny the petition for the dissolution of
Akiachak.
MR. BOCKHORST explained that Section 5 of the bill adopted by the
legislature in 1988 was intended to eliminate any question that a
successor to a dissolved municipal government would allow the State
of Alaska to contract with an Indian Reorganization Act village or
traditional council, but doing so would not grant any recognition
of governmental powers in the course of entering into a contract
between the State of Alaska and a village council. He indicated a
copy of the text of the 1988 amendment was in the bill packet.
SENATOR DONLEY asked how the amendment addressed that concern,
which he considered a legitimate one.
MR. BOCKHORST thought the intention was to insure, for a native
village council, it would not be recognized as a governmental
entity with governmental powers. He explained Section 22 clearly
says the powers, right, and duties of a former municipal government
would only succeed to another municipality or to the State. He
thought the intent by REPRESENTATIVE HOFFMAN was retained.
SENATOR DONLEY now felt the legislation was acceptable, but asked
MR. BOCKHORST if he had talked to REPRESENTATIVE HOFFMAN. He
suggested, out of curtesy, it should have been done, since MR.
BOCKHORST was attempting to amend a bill written by a current
legislator.
Number 305
MR. HARGRAVES said he would pay close attention to SENATOR DONLEY'S
advice and would be visiting REPRESENTATIVE HOFFMAN'S office.
SENATOR TAYLOR restated the amendment to delete on page 8, line 22
the words TO ASSETS AND LIABILITIES. Without objections, so
ordered.
SENATOR JACKO moved to pass CS FOR SENATE BILL NO. 164(JUD) as
amended (MUNICIPAL INCORPORATION/RECLASSIFICATION/DISSOLUTION)
from committee with individual recommendations. Without
objections, so ordered.
SENATOR TAYLOR introduced HB 4 (PROTECT ELDERLY AND DISABLED
ADULTS) sponsored by REPRESENTATIVE JERRY MACKIE. He noted the
addition of a committee substitute, and there was some discussion
as to whether it had been heard before. SENATOR TAYLOR clarified
there was a companion bill, HB 3, dealing with those who care for
the elderly, whereas HB 4 relates to failure to report harm or
assaults on the elderly or disabled.
Number 350
REPRESENTATIVE MACKIE reviewed his sponsor statement explaining
that HB 4 would provide a consistent penalty of a class B
misdemeanor for conviction for failure to report the harm of an
elderly or disabled person under these statutes. It would also
require the court to report convictions to the appropriate
licensing/regulatory entity. Conviction of a professionally
licensed person for failure to report a crime against an elderly or
disabled person could lead to disciplinary actions or sanctions.
SENATOR TAYLOR opened the meeting for questions and SENATOR LITTLE
asked REPRESENTATIVE MACKIE to explain the changes in the committee
substitute. He deferred to his aide, NANCY WELLER.
MS. WELLER explained the original bill was more comprehensive and
carried aggravating factors for the protection of the elderly, but
the Department of Law felt those protection were already covered
under aggravating factors presently in place.
There being no further testimony, SENATOR TAYLOR asked for the
pleasure of the committee.
SENATOR JACKO moved to pass CS FOR HOUSE BILL NO. 4(JUD)(PROTECT
ELDERLY AND DISABLED ADULTS) from committee with individual
recommendations. Without objections, so ordered.
SENATOR TAYLOR introduced SB 225 (INSURANCE TAX CREDIT:GIFTS TO
COLLEGES) sponsored by SENATOR JAY KERTTULA and noted there was a
HESS committee substitute. He called on CAROL CARROLL to testify
on behalf of SENATOR KERTTULA.
MS. CARROLL explained the bill, SB 225, would allow authorized
insurance and title insurance companies to credit their state tax
liability with an amount equal to donations they make to qualified
higher educational institutions now available to other corporations
within the State of Alaska. She offered to answer questions.
SENATOR JACKO referenced page 2 and asked if she was speaking about
two or four year institutions. MS. CARROLL read lines 1 through 3
to answer his question which gave acceptance to two-year or four-
year colleges or universities.
SENATOR DONLEY clarified the credit was 50% up to $100 thousand and
then 100% for the next $100 thousand. MS. CARROLL said he was
correct, and SENATOR DONLEY disagreed with the 100% credit language
because it would allow private citizens to allocate money instead
of the legislature.
Number 409
SENATOR LITTLE gave an example of a credit union owing $100
thousand in taxes, and instead, giving the $100 thousand to the
University of Alaska as a donation. She asked for an explanation.
MS. CARROLL explained if a company has a tax liability to the state
and wanted to donate the whole $100 thousand, the company would
only be able to take a tax credit of 50% of the amount. SENATOR
DONLEY also explained the company could give $150 thousand and
receive a credit for the $100 thousand.
MS. CARROLL noted in Section 2 stating "or 50% of the tax payers
liability, whichever is less," which, she said, would not allow a
100% in the case described by SENATOR DONLEY. SENATOR TAYLOR
explained the most such a company could receive would be 50% of
their total tax liability. MS. CARROLL added, "as long as it is
not over $150 thousand."
SENATOR JACKO asked if was open to use by the scholarships managed
by the Postsecondary Education Commission, but MS. CARROLL said the
provisions only apply to the three universities.
SENATOR JACKO questioned the retroactive effective date. MS.
CARROLL explained it would give insurance companies the opportunity
to donate this year.
SENATOR LITTLE asked why the bill was limited to certain insurance
taxes, and were there provisions for individuals to contribute to
the university under the legislation.
MS. CARROLL explained in statute this credit is already available
to anyone who pays a corporate income tax, oil production tax,
fishing taxes or mining taxes.
SENATOR TAYLOR opened the teleconference network and invited SHERIE
STEELE from Sitka to testify.
Number 450
MS. STEELE identified herself as the Director of Development for
Sheldon Jackson College, and acknowledged MS. CARROLL had testified
to most of their points. She reviewed a letter from KENNETH
CAMERON D.M.D. acting president of Sheldon Jackson College in
support of SB 225, in which he wrote, "The Alaska Income Tax
Education Credit is an extremely useful tool for Alaskans because
it encourages mutually beneficial partnerships between industry and
higher education. This tool allows colleges in the state to
enhance and improve academic programs by having access to the
funding necessary to implement quality education for Alaskans. An
omission in the original legislation, namely the omission of
including the insurance industry as a taxpayer group eligible to
participate in this most essential partnering incentive, can be
rectified by SB 225."
SENATOR TAYLOR next called on WENDY REDMAN, Vice-President for
University Relations for the University of Alaska to testify.
MS REDMAN explained the tax credit legislation passed several years
ago has proved very helpful to the University of Alaska, APU and
Sheldon Jackson in seeking private funds as one more tool to
broaden the base of support, especially for the University of
Alaska. She said their campus raised close to $12 million over the
past two years, with the majority of the funds placed in endowments
that will provide benefits to students far into the future. MS.
REDMAN said the tax credit legislation was responsible for about $1
million of the donations, but she claimed this was not lost revenue
to the state. She urged the passage of the legislation and offered
to answer questions.
SENATOR DONLEY asked if the fundamental law being amended has ever
been challenged? MS. REDMAN said it has not. SENATOR TAYLOR asked
if challenge had been anticipated, and MS. REDMAN said there was
some anticipation when it was first past.
SENATOR JACKO asked for details, and SENATOR DONLEY explained
Article 7, Section 1 of the State Constitution says, "... no money
shall be paid from public funds for direct benefit to any religious
or any other private educational institution." He claimed the
original bill denies the State income to the benefit of a private
educational institution and is unconstitutional.
Number 505
MS. REDMAN told SENATOR TAYLOR it has never been challenged, and
she reviewed the discussion when the bill was first passed. She
said REPRESENTATIVE GRUENBERG had a ruling based on information
from another state that "... when you're capturing revenue before
it hits the general fund, as apposed to after, therefore, it is not
general funds." She said there were rulings on both sides of the
issues.
SENATOR TAYLOR acknowledged a letter from Dr. F. Thomas Trotter,
President of Alaska Pacific University in support of SB 225.
SENATOR JACKO moved to pass CS FOR SENATE BILL NO. 225(HES)
(INSURANCE TAX CREDIT:GIFTS TO COLLEGES) from committee with
individual recommendations. Without objections, so ordered.
SENATOR TAYLOR introduced SB 190 (ENFORCEMENT OF SUPPORT ORDERS)
sponsored by the Senate Judiciary Committee by request and invited
LARAINE DERR, Deputy Commissioner for the Department of Revenue, to
testify.
MS. DERR explained she had recently taken on the responsibility for
the Child Support Enforcement Division, but preferred to defer to
MARY GAY, Division Director, for a review of the bill. MS. DERR
said the bill would bring the State statute into line with federal
requirements, and she introduced MS. GAY, who would be speaking on
the teleconference network from Anchorage.
MS. GAY explained SB 190 would amend Alaska State Statute 25.27.062
and bring the State into compliance with federal regulations. She
also explained the Family Support Act of 1988 which requires the
State to enact laws and implement procedures for wage withholding.
Section 101 of the Family Support Act also requires that, effective
January 1, 1994, States implement immediate withholding in all
support orders initially issued in the State which are not being
enforced under Title IV-D.
MS. GAY concluded by stressing that federal funding was contingent
upon this legislation.
SENATOR TAYLOR announced a new committee substitute prepared by
TERRI LAUTERBACH, 8LS1001\K, 2/23/94, which incorporates the
changes, the first one being the bond security requirement, and the
second, on page 2, line 3, where the Child Support Enforcement
Agency's (CSEA) responsibility is clarified. SENATOR TAYLOR asked
his aide, KEVIN SULLIVAN, to clarify the sunset provision.
Number 554
SENATOR TAYLOR asked MS. GAY if she had reviewed the committee
substitute before the committee, and she replied she had not. MR.
SULLIVAN said a copy had been faxed to her office today.
SENATOR TAYLOR reviewed the changes made by MS. LAUTERBACH, and
reminded the committee this was federally mandated legislation that
could affect the existence of the child enforcement agency, since
presently the cost of the agency from federal funding.
SENATOR LITTLE clarified that if the bill is not passed, the State
would lose significant funds in promoting the collection of child
support payments, which directly affects the number of people on
welfare with the accompanying costs. She thought it was important
the bill be put forward, and she questioned the removal of
conflicting language within the bill. SENATOR TAYLOR asked MR.
SULLIVAN to explain what has happened to the bill.
MR. SULLIVAN explained to MS. GAY when he had received the bill as
well as the memo from MS. LAUTERBACH, and that it had been faxed to
her. He suggested she send someone to find it, so all participants
would be looking at the same information.
MR. SULLIVAN told SENATOR LITTLE the question put before Legal
Services was whether it complied with federal requirements, and he
explained the research that went into the committee substitute. By
sending the memo to the Child Support Enforcement Agency, he said
the committee was made aware of other federal requirements that
actually did speak to the bill with the exception of the sunset
provision. He explained all of this contributed to the committee
substitute, which was then delivered back to MS. GAY, and he also
explained the reinsertion of the bonding requirements.
MS. GAY spoke to the urgency of passing the legislation, not only
to fund the Child Support Funding Agency, but to protect the Aid to
Families with Dependent Children funding, which would amount to
half of $62 million provided by the federal government.
Number 588
SENATOR LITTLE asked to have MS. LAUTERBACH explain the changes
being considered in the committee substitute.
MS. LAUTERBACH and SENATOR LITTLE discussed which version of the
committee substitute should be considered. MS. LAUTERBACH
explained the very latest version contained the bonding and
security provisions, which were returned to the legislation, and to
take out the extension of the employer information program as
passed in 1991. MS. LAUTERBACH had discussed the legislation with
MS. GAY, who pointed out some regulations not previously seen by
MS. LAUTERBACH.
TAPE 94-12, SIDE B
Number 001
MS. LAUTERBACH explained the bonding and security provisions were
from even older regulations, and she had returned them to the
legislation. She further explained the changes in the repealer
relating to the employer information program were requested by
Judiciary staff.
SENATOR LITTLE asked MS. LAUTERBACH and MS. GAY why the employer
recording provision were not returned to the bill, since the bill
deals exclusively with implementing the federal withholding
requirements. They all agreed the employer recording provision
worked well for the Alaska Child Support Enforcement Division by
returning money to AFDC. SENATOR LITTLE suggested it would be in
the State's best interest to retain the program, but MS. GAY
thought it might hold up passage of the bill, which she considered
critical.
SENATOR LITTLE asked whether the provision was controversial, and
both SENATOR TAYLOR and MS. GAY said it was. MS. GAY explained the
federal government would probably require the continuation of the
program as far as reporting of all new hires, and their W-4 forms
to be matched with child support records.
SENATOR LITTLE said her preference was to leave the program in
effect, since she thought it was important to increase whenever
possible the collection of child support backlogs.
MS. GAY said REPRESENTATIVE MARK HANLEY has a bill to reinstate the
provision, and SENATOR TAYLOR explained he had been told that SB
190 was solely to bring the State into compliance with federal law.
He said he was only trying to present a pure bill, which would be
easier to defend on the floor of the Senate.
Number 043
After some discussion, SENATOR TAYLOR moved to adopt CS FOR SENATE
BILL NO. 190(JUD), previously identified as LAUTERBACH, 2/12/94.
Without objections, so ordered.
SENATOR LITTLE moved to pass CS FOR SENATE BILL NO. 190(JUD)
(ENFORCEMENT OF SUPPORT ORDERS) from committee with individual
recommendations. Without objections, so ordered.
There being no further business to come before the committee, the
meeting was adjourned at 2:35 p.m. by SENATOR TAYLOR.
| Document Name | Date/Time | Subjects |
|---|