Legislature(2001 - 2002)
05/08/2002 03:14 PM Senate JUD
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
SENATE JUDICIARY COMMITTEE
May 8, 2002
3:14 p.m.
MEMBERS PRESENT
Senator Robin Taylor, Chair
Senator John Cowdery
Senator Gene Therriault
Senator Johnny Ellis
MEMBERS ABSENT
Senator Dave Donley, Vice Chair
COMMITTEE CALENDAR
CS FOR HOUSE BILL NO. 180(JUD)
"An Act relating to persons who provide services related to
children; establishing a legislative task force on child
services; and providing for an effective date."
MOVED CSHB 180(JUD) OUT OF COMMITTEE
CS FOR HOUSE BILL NO. 350(FIN) am
"An Act relating to murder, conspiracy, criminal mischief, and
terroristic threatening; and providing for an effective date."
MOVED SCS CSHB 350(JUD) OUT OF COMMITTEE
HOUSE BILL NO. 348
"An Act relating to violations of domestic violence protective
orders."
MOVED HB 348 OUT OF COMMITTEE
HOUSE BILL NO. 501
"An Act relating to the use of unclaimed property to pay court-
ordered restitution; and providing for an effective date."
MOVED HB 501 OUT OF COMMITTEE
CS FOR SENATE BILL NO. 235(STA)
"An Act relating to emergency and disaster relief forces as state
employees for purposes of workers' compensation benefits;
relating to the Emergency Management Assistance Compact and the
implementation of the compact; and providing for an effective
date."
MOVED CSSB 235(STA) OUT OF COMMITTEE
SENATE JOINT RESOLUTION NO. 32
Proposing amendments to the Constitution of the State of Alaska
relating to a marine and rail transportation fund.
MOVED CSSJR 32(JUD) OUT OF COMMITTEE
SENATE BILL NO. 87
"An Act providing special absentee ballots for voters in remote
areas."
MOVED SB 87 OUT OF COMMITTEE
CS FOR HOUSE BILL NO. 304(2d RLS) am
"An Act relating to the education fund and the infrastructure and
economic development fund, to the market value of the permanent
fund, to distribution of the income of the permanent fund, and to
the determination of net income of the mental health trust fund."
HEARD AND HELD
PREVIOUS SENATE COMMITTEE ACTION
HB 180 - No previous action to record.
HB 350 - No previous action to record.
HB 348 - See HESS minutes dated 4/24/02.
SB 235 - See State Affairs minutes dated 1/24/02 and 1/31/02, and
Labor and Commerce minutes dated 2/21/02.
SJR 32 - See Transportation minutes dated 4/30/02.
SB 271 - See Transportation minutes dated 2/26/02 and 4/30/02.
SB 87 - See State Affairs minutes dated 5/05/01 and 2/10/02.
HB 304 - See Judiciary minutes dated 5/6/02.
WITNESS REGISTER
Representative Lesil Maguire
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Sponsor of HB 180 and HB 350
Ms. Linda Wilson, Deputy Director
Alaska Public Defender Agency
Department of Administration
PO Box 110200
Juneau, AK 99811-0200
POSITION STATEMENT: Opposed to HB 350
Ms. Anne Carpeneti
Assistant Attorney General
Department of Law
PO Box 110300
Juneau, AK 99811-0300
POSITION STATEMENT: Suggested an amendment to HB 350
Ms. Minta Montalbo
Staff to Representative Croft
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Available to answer questions about HB 348
Ms. Heather Nobrega
Staff to the House Judiciary Committee
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Answered questions about HB 501
Major General Phil Oates
Commissioner
Department of Military &
Veterans Affairs
PO Box 5800
Ft Richardson, AK 99505-0800
POSITION STATEMENT: Presented CSSB 235(STA)
Ms. Carol Carroll
Director, Administrative Services
Department of Military &
Veterans Affairs
PO Box 5800
Ft Richardson, AK 99505-0800
POSITION STATEMENT: Answered questions about CSSB 235(STA) and
stated opposition to SB 271.
Mr. Wayne Rush
No address provided
POSITION STATEMENT: Supports CSSB 235(STA)
Mr. Mike Mitchell
Assistant Attorney General
Department of Law
PO Box 110300
Juneau, AK 99811-0300
POSITION STATEMENT: Supports CSSB 235(STA)
Mr. Bob Doll
Director, Southeast Region
Department of Transportation &
Public Facilities
3132 Channel Dr.
Juneau, AK 99801-7898
POSITION STATEMENT: Opposed to SB 271 and SJR 32
Ms. Sara Boario
Staff to Senator Lincoln
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Presented SB 87 for the sponsor
Ms. Gail Fenumiai
Division of Elections
Office of the Lt. Governor
PO Box 110017
Juneau, AK 99811-0017
POSITION STATEMENT: Answered questions about SB 87
Mr. Jack Shay, Mayor
Ketchikan Gateway Borough
344 Front St.
Ketchikan, AK 99901
POSITION STATEMENT: Testified as the President of the Alaska
nd
Municipal League in support of CSHB 304(2 RLS)
Mr. Jim Weidner
Secretary, A Friend of the Dividend
5479 Chena Hot Springs Rd.
Fairbanks, AK 99712
nd
POSITION STATEMENT: Opposed to CSHB 304(2 RLS)
Mr. Dale Ulrich
Save Your Dividend Alaskans
Anchorage, AK
nd
POSITION STATEMENT: Opposed to CSHB 304(2 RLS)
Mr. R. Merrick Pierce
A Bright Future for Alaskans
PO Box 10045
Fairbanks, AK 99710
nd
POSITION STATEMENT: Opposed to CSHB 304(2 RLS)
Mr. Jim Kelly
Director of Communications
Alaska Permanent Fund Corporation
PO Box 25500
Juneau, AK 99802-5500
nd
POSITION STATEMENT: Answered questions about CSHB 304(2 RLS)
and said the Permanent Fund Board favors the payout methodology
in the bill but wants inflation proofing.
Representative Bill Hudson
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Answered questions about HB 304
ACTION NARRATIVE
TAPE 02-27, SIDE A
Number 001
CHAIRMAN ROBIN TAYLOR called the Senate Judiciary Committee
meeting to order at 3:14 p.m. Senators Therriault, Cowdery and
Chair Taylor were present. The first matter before the committee
was CSHB 180(JUD).
CSHB 180(JUD)-YOUTH SERVICES: REGULATION & TASK FORCE
REPRESENTATIVE LESIL MAGUIRE, sponsor of HB 180, explained that
CSHB 180(JUD) is another step the Legislature can take to protect
Alaska's children. It passed the House almost unanimously on
April 29. She noted that Congress recently passed the Adoption
and Safe Families Act because of concern for children who were
being placed in unsafe situations or not removed from them. CSHB
180(JUD) will bring Alaska's laws up to the standards in the
federal legislation. It will bring Alaska statutes into
compliance with federal licensing requirements in the areas of
prohibited crimes and it provides standards for mandatory denial
of licenses to six state licensed facilities. CSHB 180(JUD) does
not chart new water; it affects the areas that are already
licensed - foster homes, residential childcare facilities,
residential psychiatric treatment centers, child placement
agencies, maternity homes, and domiciliary schools. She clarified
that the domiciliary schools are boarding facilities. Finally,
CSHB 180(JUD) also limits the state from approving or licensing
any person that has been convicted of a felony in one of four
areas: child abuse or neglect; spousal abuse; a crime against a
child; or a crime involving rape, sexual assault or homicide. She
noted that CSHB 180(JUD) provides guidelines that will allow
departments to make decisions regarding the licensing of certain
child care facilities through proof from authorized criminal
background checks. The state can deny licensing to any person
convicted of the above felonies.
REPRESENTATIVE MAGUIRE said that in addition, the state may not
approve or license any prospective foster or adoptive parent if
the parent has, within the last five years, been convicted of a
felony involving physical assault, battery, or a drug related
offense. CSHB 180(JUD) also calls for the creation of a task
force to explore the notion of criminal background checks for
other areas. She informed members that she was asked by a
constituent to include a provision requiring mandatory background
checks for all adults who volunteer in children's clubs such as
the YMCA. She received quite a few comments and concerns from the
non-profit community about that requirement because of costs and
recruitment problems. In an effort to explore those costs and
other challenges, CSHB 180(JUD) sets up a task force to study
those concerns and report back to the legislature in January of
2003.
There being no questions or further testimony, SENATOR COWDERY
moved CSHB 180(JUD) from committee with individual
recommendations and its accompanying fiscal notes.
CHAIRMAN TAYLOR announced that without objection, CSHB 180(JUD)
moved from committee.
CSHB 350(FIN)am-TERRORISTIC THREATS & OTHER CRIMES
REPRESENTATIVE LESIL MAGUIRE, sponsor of CSHB 350(FIN)am
explained that this legislation is an omnibus homeland security
bill. Alaska statutes address issues that relate to terrorism,
but they do not take a comprehensive approach to provide tools
for prosecutors. CSHB 350(FIN)am is an effort to provide those
responsible for homeland security in Alaska the legal tools they
need to discourage false threats and to punish actual attempts to
practice terrorism in Alaska. Under CSHB 350(FIN)am, it will be
a class A felony, punishable by up to 20 years in prison, to
intentionally damage oil or gas pipelines or associated
facilities. She noted that specific facilities have been
identified and damage to them would cause widespread panic and
chaos. In addition to oil and gas pipelines, the crime would
apply to damage to water utilities, water mains, power, gas or
electrical distribution systems, or elements of the emergency
responder system. Any unsuccessful attempt to damage those
systems or an attempt to damage airplanes or helicopters would be
a class B felony. Finally, CSHB 350(FIN)am would raise
terroristic threatening from a class C to a class B felony, and
define the crime more clearly. The existing definition is
ambiguous; CSHB 350(FIN)am narrows it so that it will not apply
to a prankster. It also adds the act of making a false report of
releasing harmful chemical, biological, or explosive agents into
air, food or cosmetics. The current statute does not address air
and water so they were added.
SENATOR ELLIS asked for clarification of the reference to
cosmetics.
REPRESENTATIVE MAGUIRE explained that cosmetics and food are
named in the existing statutes but water and air are not.
SENATOR THERRIAULT referred to page 8, lines 29 and 30 of CSHB
350(FIN)am and asked why bacteriological, biological, chemical
and radiological substances were separated out since they are
inclusive of each other.
REPRESENTATIVE MAGUIRE said she and Ms. Carpeneti labored over
that question. Those substances were differentiated as the result
of a compromise with some minority members on the House Finance
Committee. Those members felt the original language (a toxic
agent that could cause serious bodily harm) was too broad so the
federal definition was used to narrow it. Those members were
concerned that the original language could apply to a person who
did not intend to do harm.
CHAIRMAN TAYLOR took public testimony.
MS. LINDA WILSON, Deputy Director of the Alaska Public Defender
Agency, said that since September 11, the federal and state
governments have felt the need to respond with appropriate
legislation to address terroristic threats and tighten up
loopholes to strengthen existing laws. The public defender's
agency certainly supports those efforts but it does not support
CSHB 350 (FIN)am for the following reasons.
CSHB 350 (FIN)am creates a "disproportionality" within the
criminal statutory scheme. Under Alaska's criminal code, crimes
are classified according to the type of injury caused and the
culpability of the defendant. Murder in the first degree is an
unclassified felony offense. Murder in the second degree is also
an unclassified felony that includes the crime of felony murder.
Within that felony murder aspect, many crimes are listed. If,
during the commission or the attempt to commit one of those
underlying crimes, or in fleeing from that crime, a person dies,
the person may be charged with second degree murder in addition
to the underlying offense. CSHB 350 (FIN)am leapfrogs two
underlying offenses - criminal mischief in the first degree and
terroristic threatening in the first degree as offenses that
would qualify under murder in the first degree for felony murder
that would otherwise appropriately belong in murder in the second
degree. The crimes delineated in the murder in the second degree
felony murder include arson in the first degree, kidnapping,
sexual assault in the first degree, sexual abuse of a minor in
the first degree, burglary in the first degree, escape in the
first degree, robbery in the first degree, and misconduct
involving controlled substances in the first degree. Yet CSHB 350
(FIN)am pulls out two crimes that were not even included in
murder in the second degree and elevates them to felony murder in
the first degree. She stated it is more appropriate that these
two crimes be included with all of the other serious crimes that
are in murder in the second degree.
MS. WILSON continued by informing members that class A felonies,
which are below unclassified felonies, are reserved for crimes
that involve conduct that actually results in serious physical
injury or a substantial risk of serious physical injury. Some
examples of crimes classified as class A felonies are arson in
the first degree, assault in the first degree, a weapons
misconduct offense in the first degree, and escape in the first
degree. Class B felonies are for the more serious or aggravated
property offenses and offenses against public administration or
order and conduct that results in less severe violence against a
person than would be in a class A felony. Some examples of class
B felonies are burglary in the first degree, perjury, bribery and
forgery. CSHB 350(FIN)am elevates criminal mischief in the first
degree to a class A felony for damage to property in excess of
$100,000. It also elevates, from a C to a B felony, tampering
with an airplane in addition to tampering with an oil or gas
pipeline or supporting facility. Increasing these four crimes
creates "disproportionality." These four crimes should remain
with the other sets of crimes more appropriately described as B
and C felonies as they better fit the overall classification
scheme.
MS. WILSON said she is specifically concerned about the new
offense created within terroristic threatening on page 8.
Terroristic threatening right now is a class B felony. CSHB 350
(FIN)am divides terroristic threatening into two degrees and
makes the more serious of the two, terroristic threatening in the
first degree, a class B felony. This particular section of the
bill was amended but the amendment did not make reference to the
mental state for this crime. The original language required that
the person intentionally placed a person in fear or caused
serious public inconvenience or evacuation. The House Finance
Committee amended that section so that a crime is committed if
the result is that a person was placed in fear, etcetera.
However, that amendment did not address the mental element of
intent. She suggested including that mental element within the
bill.
CHAIRMAN TAYLOR moved to amend page 8, line 28, to insert the
word "intentionally" after the word "person." He then asked Ms.
Carpeneti to comment.
MS. ANNE CARPENETI, representing the Criminal Division of the
Department of Law, told members the reason the word
"intentionally" was removed by House members was that it
originally had been a specific intent crime to knowingly send
anthrax-type materials with the intent to cause various results.
The version under consideration by the House did not require the
prosecution to prove that the perpetrator had, in fact, caused
those results. The House considered that it wanted to have the
result as the element the state needed to prove and made a change
on page 9, by adding the results that were caused. Title 11 reads
into those circumstances a reckless culpable mental state,
meaning the person knew the risk and disregarded it. Therefore, a
culpable mental state is included already.
CHAIRMAN TAYLOR asked Ms. Carpeneti if she would object to
including the word "knowingly."
MS. CARPENETI said she did not.
CHAIRMAN TAYLOR withdrew his amendment and moved to insert, on
page 8, line 28, the word "knowingly" after the word "person." He
stated that he felt Ms. Wilson's comments were well founded.
There being no objection, CHAIRMAN TAYLOR's amendment was
adopted.
SENATOR THERRIAULT noted that Ms. Carpeneti had mentioned a
provision in the Senate version that was more artfully crafted
and asked her to direct him to it.
MS. CARPENETI referred to page 9, line 26, and said the problem
with changing it back to the Senate language at this time is that
the entire section would have to be rewritten because of the way
the lead-in reads.
SENATOR COWDERY moved SCS CSHB 350(FIN) am from committee with
its zero fiscal note.
CHAIRMAN TAYLOR announced that without objection, SCS CSHB
350(FIN) am moved from committee.
3:36 p.m.
HB 348-VIOLATION OF A DOMESTIC VIOLENCE ORDER
MS. MINTA MONTALBO, staff to Representative Croft, sponsor of HB
348, asked that members ask any questions of Ms. Carpeneti, as
she worked with Representative Croft on this bill.
CHAIRMAN TAYLOR noted there were no questions or further
testimony.
SENATOR COWDERY moved HB 348 from committee with individual
recommendations.
CHAIRMAN TAYLOR announced that without objection, HB 348 moved
from committee.
The committee took up HB 501.
HB 501-UNCLAIMED PROPERTY & RESTITUTION
MS. HEATHER NOBREGA, counsel to the House Judiciary Committee,
told members that HB 501 makes it easier for the Department of
Law to collect unclaimed property of criminals to pay
restitution.
CHAIRMAN TAYLOR noted that it would be a rare situation when
property is unclaimed or abandoned but it does occur.
SENATOR COWDERY moved HB 501 from committee with individual
recommendations and its accompanying fiscal note.
CHAIRMAN TAYLOR announced that HB 501 moved from committee
without objection.
The committee took up SB 235.
SB 235-EMERGENCY MANAGEMENT ASSISTANCE COMPACT
MAJOR GENERAL PHIL OATES, Adjutant General and Commissioner of
the Department of Military and Veterans Affairs, said CSSB
235(STA) pertains to the Emergency Management Assistance Compact
(EMAC). Other states in our nation stand in line to assist other
states on a duty rostered basis. The states are indemnified from
any liability for that support and are actually reimbursed for
it. He said it is important to note two things: the New York
State Legislature met immediately after September 11 and adopted
EMAC; and states have been successful at the federal level in
arguing for a soft match to receive the federal supplemental this
year. The primary determinant of getting the federal resources
will be membership in EMAC. At the end of this year, all but four
states are anticipated to have signed on to EMAC. He noted this
piece of legislation may be one of the more important pieces of
legislation passed this entire year.
CHAIRMAN TAYLOR announced his intention to move the bill from
committee today and took public testimony.
MR. WAYNE RUSH stated support for CSSB 235(STA).
MR. MIKE MITCHELL, Assistant Attorney General, informed members
he assisted in drafting SB 235 and was available to answer
questions. He added the Department of Law supports CSSB 235(STA).
There being no further testimony, SENATOR COWDERY moved CSSB
235(STA) from committee with individual recommendations and its
zero fiscal note.
CHAIRMAN TAYLOR objected so that Senator Therriault could ask a
question.
SENATOR THERRIAULT asked for an explanation of the changes made
in the Community and Regional Affairs Committee.
MS. CAROL CARROLL, Department of Military and Veterans Affairs,
explained that a technical change was made that tightened up the
eligibility under Workers' Compensation. It clarified that to be
eligible, a person had to be called or under the purview of
emergency services before covered by workers' compensation.
CHAIRMAN TAYLOR announced that without objection, CSSB 235(STA)
moved from committee.
The committee took up SB 271.
SB 271-MARINE AND RAIL TRANSPORTATION AUTHORITY
CHAIRMAN COWDERY informed members that the Senate Transportation
Committee held several hearings on SB 271 and amended it to
remove the Alaska Railroad Corporation (ARRC). He pointed out the
amendment did not get incorporated into the current version.
CHAIRMAN TAYLOR informed members that is why the committee has a
work draft before it, labeled Utermohle 4/19/02 (Version C). He
asked for a motion to adopt that work draft in lieu of the
original bill.
SENATOR COWDERY so moved.
CHAIRMAN TAYLOR announced that without objection, Version C was
adopted as the working draft of the committee. He then asked
Senator Ward to testify.
SENATOR JERRY WARD, sponsor of SB 271, told members that Version
C creates an Alaska Marine Highway Authority with all of the
powers of an authority. A companion piece of legislation, SJR 32,
addresses the fact that the authority will operate on dedicated
funds. The authority is modeled after many other authorities in
the "Lower 48." The authority will be given 500,000 acres of
state land. He believes the Alaska Marine Highway System (AMHS)
has not been on the same footing as the Alaska Railroad
Corporation, which would be have operated at a loss for the last
eight years without a land base. When the AMHS was formed in
1963, it did not receive a land base. After several attempts to
fund the AMHS through endowments and various sources, the funds
have been depleted so that agency now receives a decreasing
amount of general fund monies each year.
SENATOR WARD drew members' attention to a letter from
Commissioner Pat Pourchot of the Department of Natural Resources,
who said that giving 500,000 acres to the authority will divert a
significant revenue stream out of the general fund. Senator Ward
submitted that if a half-million acres was generating a
significant revenue stream, this legislation would not be
necessary. The state has 103 million acres of land that are not
being developed; if the Alaska Railroad Corporation had that
land, everybody would be working for it. He asked members to
consider passage of this legislation to remove 500,000 acres of
state land from state control and put it into an authority so
that the AMHS can eventually become self-sufficient. He added
that the AMHS will not become self-sufficient from day one; it
will still need general funds or CBR funds. He said he believes
the AMHS is every bit if not more important than the Alaska
Railroad. Senator Ward informed members that SB 271 is very
similar to legislation introduced in the past by former Senator
Lloyd Jones and Chairman Taylor, except that SB 271 gives a land
base to the authority.
SENATOR THERRIAULT asked if the land would be located around AMHS
operations as the railroad land is located along the railroad
corridor.
SENATOR WARD clarified that ARRC's land base is not located
around the railroad corridor. Some of the land was transferred in
1983 upon the sale of the railroad, but about 40,000 acres is
also available that has nothing to do with the operation of the
railroad. He said he does not care where the state land is
located because there is no Alaska land that is not valuable. He
said he hopes it is land that could be logged right away so that
the AMHS could begin to supplement its operations.
SENATOR COWDERY asked if a high percentage of ARRC's profits come
from its landholdings rather than from hauling freight.
SENATOR WARD said that is the way it should be because when the
railroad was built across the Lower 48, it was given every other
section of land to supplement the operation of the railroad. He
stated:
Even though they're not under the Executive Budget Act,
that $10 to $11 million per year - that generates the
$5 to $6 million worth of profit that they show every
year on their books. Without that they would be here
asking for a general fund draw, such as we have now put
the position of the Marine Highway having to do. It
just seems logical to me if it's good enough for the
railroad, it's good enough for the Marine Highway
System.
SENATOR ELLIS asked if the Southeast Conference opposes SB 271.
SENATOR WARD said he believes that is correct and that they want
to leave it as a "line-item agency." He said that is why he
referred to Commissioner Pourchot's letter. The flaw in the
system is that the 103 million acres owned by the state is not
generating any revenue, which is why the commissioner's statement
is incorrect.
SENATOR ELLIS asked why the Southeast Conference is opposed to
the bill.
CHAIRMAN TAYLOR clarified the Southeast Conference has indicated
it will be putting a group together to study the concepts of an
authority and to see what other states have done. The Conference
was not sure if SB 271 is the best design. At times in the past,
it has strongly supported an authority without a land grant.
SENATOR WARD added the Conference said it does not want to go
against the Administration's opposition at this time.
CHAIRMAN TAYLOR took public testimony.
MS. CAROL CARROLL, Department of Natural Resources, said DNR
opposes SB 271 for the following reasons that focus on Section
25, which provides 500,000 acres to the fund.
· State land should be managed for the benefit of all Alaskans
and the legislature should appropriate revenue from state
lands rather than appropriate the land itself. DNR currently
manages state land to benefit all Alaskans and makes quite a
bit of money doing so. While the state owns more than 100
million acres, DNR has a limited amount of land that can
generate revenue. Most of that land has oil and gas
deposits.
· Transferring land from DNR management to other state
agencies does not necessarily lead to increased revenue
production to the state. Most of the ability to generate
revenue from state land is a function of either world
markets for resources, the price of oil or minerals, or
having the staff needed to make land available for sale or
lease.
· Simply transferring land from DNR to the fund will not alone
generate more revenue. The bill will be expensive to
implement. Any potential increase in the revenue must be
weighed against the significant costs required to identify
and transfer large acreage from the land from one agency to
another and the long term costs to establish another state
land management agency that duplicates DNR. The agency will
duplicate DNR's functions. The land transfers will cost over
$15 million with most of that cost being for land surveys
required to transfer land from DNR to the authority.
· SB 271 will further complicate land ownership in Alaska
making resource development and public access more
difficult. It would also compound the difficulty in
resolving the current school grant lands litigation or in
providing additional lands to the University of Alaska as
the fund will no doubt select lands that will be most
suitable for a legal settlement if the state is required to
transfer land to the University or to reconstitute the
school trust or land trust.
MS. CARROLL said a staff person from the Division of Lands was
available via teleconference to answer specific questions.
CHAIRMAN TAYLOR asked if DNR actively opposed the conveyance of
250,000 acres of state land to the University of Alaska.
MS. CARROLL said that is correct.
CHAIRMAN TAYLOR asked if DNR also actively opposed the conveyance
of lands to Alaska's schools and that litigation on that action
is pending.
MS. CARROLL said she does not know that DNR actively disagreed
with the transfer of the land under the public school land. She
said she believes DNR is currently undergoing a process to value
that land.
CHAIRMAN TAYLOR responded:
In fact it was the Department of Natural Resources
that, back about 25 years ago, that stole all the land
away from the Mental Health Trust and we got sued over
that one and that cost us - it could have cost us
several billions of dollars. In fact what did we do to
solve the mental health litigation? We gave them land
back, didn't we? And it was land that was given back
very reluctantly, I might add, by the Department of
Natural Resources who had done such a poor job of
managing it that there were not funds available off of
that management - giving away lands, selling lands,
locking lands up into parks that were designed to be
forests and to provide revenue. Sadly it was your
department again that put us in that position and we
ended up with 3500 families in this state who had
purchased land and built houses on it only to find out
that it was mental health land that had been conveyed
by the Department of Natural Resources in violation of
the Mental Health Trust. All of those things are
historical things that I think you and I both agree on
were probably not the best decisions made in land
management by the Department of Natural Resources so
when I hear your comment that the Department of Natural
Resources must manage for all of the people in the
state, I have a hard time conceiving that anybody in
their right mind would ever turn over any land to the
Department of Natural Resources to manage in light of
the track record over there. But that's only a comment
on my part.
CHAIRMAN TAYLOR then thanked Ms. Carroll for coming forward and
said he was not sure that he favored giving an authority 500,000
acres because although he can't imagine a group that could manage
it worse than the department, an authority might come close. He
then asked Mr. Doll to testify.
MR. BOB DOLL, Regional Director for the Southeast Region of the
Department of Transportation and Public Facilities (DOTPF),
informed members that DOTPF does not support SB 271 for several
reasons. First, there is the uncertainty associated with the sale
of the land and the amount of revenue it would produce. Second,
SB 271 creates a separate authority to perform the function now
being performed by the department.
TAPE 02-27, SIDE B
MR. DOLL said that would be a regressive step regarding the
system's ability to respond to public concerns and to general
operations. Third, it creates an anomalous position for the
marine highway authority with regard to approaching the topic of
federal funding for transportation projects in the state. If
DOTPF has no responsibility for operating the system and the
results obtained, its ability to make an appeal for and gain
approval of expenditure of federal funds for transportation on
marine highway topics would be impaired. Finally, SB 271 requires
a constitutional amendment to set up the fund, which will require
a great deal of effort for an administrative change that is
within the capability of both the executive and legislative
branches of government.
There being no further questions or testimony, SENATOR COWDERY
moved CSSB 271(TRA) from committee with its accompanying fiscal
note and individual recommendations.
SENATOR ELLIS objected.
The motion to move CSSB 271(TRA) from committee carried with
Senators Cowdery, Therriault and Taylor voting in favor, and
Senator Ellis voting against.
The committee took up SJR 32.
SJR 32-CONST. AM:MARINE/RAIL TRANSPORTATION FUND
SENATOR WARD, sponsor of SJR 32, informed members that SJR 32 is
a companion bill to SB 271 and is required to dedicate funds to
an Alaska Marine Highway Authority.
CHAIRMAN TAYLOR pointed out that a work draft that removed the
Alaska Railroad Corporation from the resolution was before the
committee.
SENATOR WARD said the Alaska Railroad Corporation was removed by
the Senate Transportation Committee and the new draft was before
members. He noted some of the Transportation Committee members
wanted the railroad removed because of concern about the
Executive Budget Act.
CHAIRMAN TAYLOR specified that the work draft was labeled
Utermohle 4/18/02 Version C. He then moved that the work draft be
adopted and asked for unanimous consent. There being no
objection, the motion carried. He then moved Version C from
committee.
SENATOR ELLIS objected and commented that Senator Ward has said
this legislation is important because he has seen what goes on
with the AMHS budget but Senator Ward is in charge of
appropriations for the AMHS. He asked Senator Ward if he is using
the behavior of the Senate Majority as a justification for this
change.
SENATOR WARD said he is in charge of the appropriations but he
does not believe the AMHS has been treated fairly. He said he
tried to get several land endowment bills through the legislature
in 1983 and was told at that time by some of his Democratic
colleagues that it would take too long to develop the lands, up
to 20 years. He repeated that he does not believe the AMHS is
being funded properly and that DOTPF and the Knowles
Administration are letting the AMHS sink because they do not have
a better plan.
SENATOR ELLIS maintained his objection. The motion to move CSSJR
32(JUD) from committee carried with Senators Cowdery, Therriault
and Chair Taylor voting in favor, and Senator Ellis opposed.
The committee took up SB 87.
SB 87-SPECIAL ABSENTEE BALLOTS
MS. SARA BOARIO, staff to Senator Georgiana Lincoln, sponsor of
SB 87, explained that SB 87 will give voters living in remote
locations the opportunity to vote using the 60-day special
advance absentee ballot. In current statute, only voters living,
working or traveling outside of the United States are eligible
for the special ballot. However, distance, terrain and natural
conditions have prevented voters in remote areas from receiving
their by-mail ballots because the current three-week window of
opportunity has not provided enough time for them to be received.
The Division of Elections already distributes the special 60-day
absentee ballot so there will be no additional cost. Concerns
were expressed in the Senate State Affairs Committee about the
interpretation of the words "remote" and "reasonable" but the
Division of Legal Services addressed those concerns to the
satisfaction of the committee.
SENATOR COWDERY asked if villages would be considered remote.
MS. BOARIO said the Division of Legal Services recommended that
the Division of Elections' regulations be reviewed to see how
they are applied to determine permanent absentee voters. One of
the criteria in the regulations the Division uses to identify
absentee voter is if the voter resides in a remote area of Alaska
where distance, terrain, or other natural conditions deny the
voter reasonable access to the polling place.
MS. GAIL FENUMIAI, Division of Elections, affirmed that SB 87 is
designed for people in remote locations without access to a
polling place due to distance, terrain, or other natural
conditions. Mail service may be sporadic in the wintertime or no
mail service may be available. If they receive a ballot 60 days
before the election, there is a better chance they can get it
back in time to be counted for the election.
SENATOR COWDERY asked if the timeline established by law on
deadlines for absentee voting will still hold.
MS. FENUMIAI said that is correct.
There being no further questions, SENATOR COWDERY moved SB 87
from committee with individual recommendations.
CHAIRMAN TAYLOR announced that without objection, SB 87 moved
from committee.
nd
CSHB 304(2 RLS)am-PERM. FUND INCOME/ DIVIDENDS/ FUNDS
CHAIRMAN TAYLOR said the committee has received several letters
on HB 304. He then asked Mr. Shay to testify.
MAYOR JACK SHAY, Ketchikan Gateway Borough and President of the
Alaska Municipal League (AML), told members the AML supports CSHB
nd
304(2 RLS)am. The AML realizes the legislation is controversial.
The AML is appreciative of any consideration the committee gives
to this legislation.
MR. JIM WEIDNER, a member of A Friend of the Dividend, said he
has campaigned to support the permanent dividend program since
its inception in the early 1980s. He said the purpose of the
permanent fund and dividend is to implement the state's
constitutional requirement to maximize the benefits of Alaska's
resources to all people. He enumerated seven examples of how the
permanent fund dividend meets the public purpose:
· It equally distributes Alaska's public wealth without regard
to age, sex, race, creed, color, economic status, geographic
location or political affiliation;
· It establishes a stable, statewide economic floor which
would not otherwise exist in all areas of the state;
· It helps reduce economic poverty and welfare dependency and
related social problems, such as alcohol, violence, child
abuse and criminal behavior;
· It maximizes individual responsibility by allowing each
person the individual freedom to invest their money as they
see fit;
· It reduces government [indisc.] and uneven wealth
distribution and waste inherent in the government's
political system;
· It promotes conversion of the Alaska economy from a self-
serving paternalistic system benefiting a very few; and
· It reduces the cost of living for Alaskans and promotes
small scale business and competitive economic development.
MR. WIEDNER said that elements of HB 304 and HB 20 were posed on
a ballot initiative several years ago. That ballot initiative to
raid the permanent fund was well funded and supported by the
political establishment and people living off of the state's oil
wealth spending. The University of Alaska promoted it, as well as
the teachers' union and Commonwealth North. That initiative lost
with 83 percent of the vote, a crushing political defeat. It
failed in every single precinct in the state. He said that some
people spend their dividends on their children's education,
others use it for house repairs, car payments, clothing, and
donations. He noted it is part of human nature to want to get
something with someone else's money. Dividends are what they are
today because former predatory attempts have been fought off. He
asked that committee members oppose the legislation.
MR. DALE URICH, Secretary of Save Your Dividend Alaskans (SYDA),
nd
said he agrees with the former speaker and opposes CSHB 304(2
RLS)am or any other legislation that attempts to tap the
permanent fund dividend. He stated that SYDA supports legislators
who are fighting to reduce government spending and oppose these
types of bills and its members will be at the polls. He asked
legislators to strike the term "budget shortfall" from any text
they are working on and use the word "overspending" instead.
MR. R. MERRICK PIERCE, representing A Bright Future for
Fairbanks, said the cumulative impact of HB 303, HB 304 and HB 20
will have a devastating effect on the Fairbanks North Star
Borough economy. The population in the borough has fallen since
1995. Wages in the borough are not keeping up with inflation. If
the three bills were to pass, they would pull about $90 million
annually out of the private sector of the borough. That
represents the same amount as the annual budget of the Fairbanks
North Star Borough. He finds it unimaginable that any legislator
from that borough could support these pieces of legislation. He
noted that recent research published by the Wall Street Journal
showed that the states that cut taxes the most had the largest
increase in jobs. Also, those states with the lowest taxes were
more likely to have population growth. He stated that if these
pieces of legislation pass, the Fairbanks North Star Borough will
see jobs and population loss. He asked members to defeat these
bills.
CHAIRMAN TAYLOR asked Mr. Pierce to repeat the amount of money
passage of these bills will cost the Fairbanks North Star
Borough.
MR. PIERCE replied $90 million.
CHAIRMAN TAYLOR stated:
I ballparked at about that same place, maybe a little
bit higher, because they're talking of taking $1
billion total out of the state's economy in the form of
income taxes, raid on the permanent fund in this bill -
304, and then the additional $70 million that they're
taking in HB 20. I was told that totals almost a
billion and if you divide that out by the population
for how many people live in the Fairbanks North Star
Borough, I actually came out with a number that would
roughly be about - I think you're about 25 percent of
the population of this state - maybe you're not but if
you're 20 percent of the population of this state,
that's $200 million that has to come out of the
Fairbanks area and it comes in the form of reduced
payments on permanent fund dividends, which is [HB] 304
and [HB] 20 and then of course increased income taxes
in the other bill. I was a little bit higher than that.
He then asked if Mr. Pierce used both the income tax and the raid
on the permanent fund in calculating $90 million.
MR. PIERCE said the North Star Borough has about 13 percent of
the state population. He said his calculation was based on about
77,000 North Star Borough residents who collect a dividend based
on $700 per dividend. That equals about $53 million from the
permanent fund dividend. He calculated the income tax using
34,000 workers paying $100 each, which equals about $34 million.
CHAIRMAN TAYLOR agreed that will have a devastating impact on the
Fairbanks economy, which he considers one of the more healthy in
the state. He then thanked all participants and informed members
that Senator Ward has submitted an amendment.
SENATOR WARD said he hopes the committee does not move CSHB
nd
304(2 RLS)am out but if it does, he has proposed an amendment
nd
that changes the effective date so that CSHB 304(2 RLS)am will
take effect upon passage of SJR 23, which is the constitutional
spending limit. He said he believes that Alaska is not living
within its means and instead of privatizing, prioritizing, and
looking at other industries to see whether or not they should
contribute to the overspending of state government, it is
proposing to reach into the pockets of every man, woman, and
child. He said if the committee wants to steal the dividend, he
asks that it put an effective date on the legislation so that it
cannot do so until a constitutional spending limit is voted on.
CHAIRMAN TAYLOR stated that he will have to oppose the amendment
because he would hate to see people vote to take money out of the
dividend without allowing them a vote on that specific question.
He said he does not know of a politician who is currently in
office who did not promise the people of Alaska that the
permanent fund would not be touched without a vote of the people.
nd
He said the amendment to CSHB 304(2 RLS)am would place a
condition on the taking of money from the fund based upon a
public vote on a spending cap which is a whole different
question. He suggested keeping the two questions separate in that
there must be a spending cap in place before a separate vote is
taken on whether or not to raid the fund.
SENATOR WARD said he agrees and that is the reason he asked the
committee not to pass the bill out. He noted the Governor, when
asked directly by the press, gave an answer that was 3½ minutes
long and was not a "yes" or "no" to the question of whether he
would veto a bill that did not require a vote of the people. He
said when the 1989 raid of the permanent fund took effect, a
majority of the Republicans stopped it until, "the Governor came
down and solicited the help of the Democrats to put that on the
ballot." He said it is very intoxicating to spend other people's
money.
CHAIRMAN TAYLOR announced that the committee would hold CSHB
nd
304(2 RLS)am at this time and asked Mr. Kelly to testify.
MR. JIM KELLY, Director of Communications for the Alaska
Permanent Fund Corporation, informed members that two things are
required to manage a large amount of money for a long period of
time if the purpose is to provide benefits to people: provide a
stable and growing amount of income for the current generation
and manage the payout so that the fund will be there for the
beneficiaries of the future. The methodology proposed in CSHB
nd
304(2 RLS)am is one that the trustees believe will accomplish
both. Changing the distribution payout to 5 percent of market
value is an improvement over the status quo. The Senate Judiciary
Committee passed out a proposed constitutional amendment, which
provides for a spending limit on the use of the permanent fund
income last week. That is the Board of Trustees preferred route
as it puts limits on how much of the fund can be used and it
provides Alaskans a chance to vote on the issue. He said the
issue of how the money will be used once the payout methodology
is in place is not one the Board of Trustees has been involved
with. However, the Trustees are concerned that the fund be
inflation-proofed so that benefits can be provided in the future.
The constitutional amendment puts inflation proofing in the
Constitution and that will ensure that the fund will produce $40
billion over the next 25 years, an amount double the amount of
nd
income from oil. He stated that CSHB 304(2 RLS)am repeals
statutory inflation proofing which would be acceptable if, at the
same time, a constitutional amendment is passed. Otherwise, the
nd
Trustees have difficulty with CSHB 304(2 RLS)am because the
intention to limit the payout to 5 percent is good, but one
legislature can undo what another has done. He concluded by
saying there is a lot of merit in this legislation but it needs
to be "married" to the constitutional amendment.
4:41 p.m.
CHAIRMAN TAYLOR thanked Mr. Kelly and said he asked the sponsor
of the bill how to secure inflation proofing the fund and where
the inflation proofing dollars would reside. He said he believes
a major restructuring of that portion of the bill is necessary
and that it should be "married" to a constitutional amendment. He
asserted that it is such a terrific risk to hope that legislators
in the future will do the right thing and continue to inflation
proof the fund. He said no one has dared cross that line in the
sand before, but there is now a majority in the House that want
to cross that line and want to make certain that the people
cannot vote. He thanked Mr. Kelly and his staff for their
responsiveness to the committee.
REPRESENTATIVE BILL HUDSON said he would like to address some
questions posed by committee members last week. He distributed a
chart of permanent fund financial projections on which he
highlighted the last five years of statutory met income. He noted
a question was raised about how to guarantee that the fund will
not be drained in a low-income year.
REPRESENTATIVE HUDSON said the question of a public vote and how
to guarantee inflation proofing was discussed in the House. He
believes a public vote is only guaranteed by the passage of SJR
13. He pointed out that at the present time, inflation proofing
and payment of permanent fund dividends is subject to the
legislature. The legislature has open entrée to the entire
earnings of the permanent fund on an annual basis and has put the
money into the fund statutorily in order to pay the dividends
based on a five year average of the statutory met income. In the
year 2002, the statutory met income was $376 million yet the
legislature passed out $938 million in dividends by virtue of the
formula and $602 million in inflation proofing by virtue of
statutory provisions. He said if legislators agree that an
enormous fiscal gap exists, that the probability of filling that
gap from new revenues in the immediate future is not likely, that
the legislature will not be able to cut $800 million from the
budget, that no income tax will pass, and that the CBR will be
gone in three years, there will be no place to go except into
enormous taxes, enormous cuts, and the earnings reserve of the
permanent fund. He said the point of fiscal policy members is
that rather than wait until the permanent fund money is devoured,
the legislature should begin to use some of the earnings of the
permanent fund early coupled with a modest income tax along with
budget cuts. He noted the House reduced the budget by $100
million this year. He said the House is trying to offer the
Senate a series of things that it took out to public hearings and
worked on with the Department of Revenue and the Permanent Fund
Corporation. He noted Mr. Kelly was accurate in saying the
Trustees would like to see inflation proofing of the corpus of
the permanent fund fixed into the Constitution, which will
require a public vote. He asked what is wrong with adopting SJR
nd
13 as nothing in CSHB 304(2 RLS)am interrupts that.
TAPE 02-28, SIDE A
nd
REPRESENTATIVE HUDSON said CSHB 304(2 RLS) does not begin the
50-50 split until 2004. It does tap $300 million for the 2003
budget to reduce the amount of take on the CBR to prolong its
life as an income account and shock absorber for the operating
budget.
CHAIRMAN TAYLOR thanked Representative Hudson.
SENATOR THERRIAULT asked why the fiscal policy group felt that
expending out of the earnings reserve is preferable to the CBR.
He pointed out that both accounts generate income.
REPRESENTATIVE HUDSON said he disagrees that the CBR is a fund
that is established to "jack the price up."
SENATOR THERRIAULT said that is how it has been used.
REPRESENTATIVE HUDSON asserted that has been recent. He recalled
that when the Republicans were in the minority, they used it to
reduce the expenditure, not to increase it. He said as long as
the legislature has individuals who say they won't vote to use
CBR funds unless another project is funded in their district, the
cost will go up. He said the fiscal policy group felt the CBR
fund is the shock absorber for the capital budget and the
earnings reserve is the shock absorber for the permanent fund and
that prefers to take $300 million from the earnings reserve
because the CBR is down to $2.3 billion now. Even if $100 million
in interest is added, it will drop down too fast with an $800
million budget gap.
REPRESENTATIVE HUDSON asked members to give the legislation a
chance and stated:
...and if we can have an open and honest dialogue and
discussion of what's in the state's best interest, and
if we can take the politics all of aside - this is not
a campaign ploy on my part - it's not a re-election
ploy on my part, I am not introducing taxes and trying
to distribute the earnings of the permanent fund in
order to further my chances to get re-elected. I think
anybody with any common sense would recognize the way
you get re-elected is to put more pork in the pot and
stay the devil away from people's assets. But I think,
as an Alaskan at any rate, this is the most important
issue confronting not only us, but the next
administration.
CHAIRMAN TAYLOR said he totally disagrees because:
We give the bureaucrats, we give the big government
folks around here the key to the golden door, and they
never need to talk to another citizen in the state.
They've got themselves an endowment that will pay for
every single new salary, benefit, and bonus for every
state worker forever. Will they ever develop one inch
of land in this state? Will we ever see the Beluga coal
fields used for a coal field? Will we ever see the vast
timber resources of this state used? Will you or I ever
be able to buy a piece of Alaska land from the
Department of Natural Resources that now only has one
person even selling land? No Bill, you won't. I
guarantee you, as long as these halls can suck money
out of the back pockets of working Alaskans through
income taxes or steal money out of the back pockets of
working Alaskans through the permanent fund, they never
have to develop one inch of this state and they won't.
They haven't for over 20 years.
REPRESENTATIVE HUDSON replied that he and Chairman Taylor could
have a wonderful discussion on this issue.
CHAIRMAN TAYLOR said what is so difficult is that HB 304 should
be the very last resort that the legislature turns to for money,
but sadly it is the first resort. He noted the legislature can't
give land to the University because the Governor will veto those
kinds of actions.
REPRESENTATIVE HUDSON said that he agrees and would also like to
see more land available, resource development and to hold the
damper down on public spending and privatization and other
methods. He voted for all of those efforts. However, where he
disagrees is that HB 304 is just a part of many actions that need
to be taken otherwise the CBR will be lost and when it is gone,
the people will not receive any permanent fund dividend at all.
He said when the CBR is gone, the legislature will have no other
place to go except the earnings reserve of the permanent fund.
CHAIRMAN TAYLOR said it will be depleted somewhat because of low
income years and by inflation proofing so there will be nothing
for this government to grab.
REPRESENTATIVE HUDSON asserted there will be no permanent fund
dividend unless, "you want to try to develop this thing with some
action up front and work it on out."
CHAIRMAN TAYLOR said that is why he wants to put a constitutional
amendment on the ballot to provide voters with an opportunity to
stabilize inflation proofing.
REPRESENTATIVE HUDSON said HB 304 does the same thing.
CHAIRMAN TAYLOR said if he could get DNR to sell 200,000 acres
per year, he might be willing to look at something like HB 304.
He noted that when the Administration will not sell a square inch
of land or develop anything, it's hard to believe the state's
only choice is to tax people.
REPRESENTATIVE HUDSON said he will not argue that. He then
thanked members.
CHAIRMAN TAYLOR adjourned the meeting at 4:47 p.m.
| Document Name | Date/Time | Subjects |
|---|