Legislature(2003 - 2004)
05/13/2003 01:40 PM Senate STA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
SENATE STATE AFFAIRS STANDING COMMITTEE
May 13, 2003
1:40 p.m.
MEMBERS PRESENT
Senator Gary Stevens, Chair
Senator John Cowdery, Vice Chair
Senator Fred Dyson
Senator Gretchen Guess
MEMBERS ABSENT
Senator Lyman Hoffman
COMMITTEE CALENDAR
SENATE BILL NO. 215
"An Act giving notice of and approving the entry into and the
issuance of certificates of participation for a lease-purchase
agreement for a seafood and food safety laboratory facility;
relating to the use of certain investment income for certain
construction costs; and providing for an effective date."
MOVED SB 215(STA) OUT OF COMMITTEE
SENATE JOINT RESOLUTION NO. 19
Proposing amendments to the Constitution of the State of Alaska
relating to the Alaska permanent fund.
MOVED SJR 19 OUT OF COMMITTEE
SENATE BILL NO. 211
"An Act relating to the publishing and furnishing of certain
public notices regarding regulations or rules of certain state
agencies; relating to distribution of the Alaska Administrative
Code, Alaska Administrative Register, and supplements to the
code or register; and providing for an effective date."
MOVED SB 211 OUT OF COMMITTEE
CS FOR HOUSE JOINT RESOLUTION NO. 22(RLS)
Relating to the USA PATRIOT Act, the Bill of Rights, the
Constitution of the State of Alaska, and the civil liberties,
peace, and security of the citizens of our country.
MOVED HJR 22 OUT OF COMMITTEE
SENATE JOINT RESOLUTION NO. 15
Relating to the USA PATRIOT Act and to defending the Bill of
Rights, the Constitution of the State of Alaska, and civil
liberties.
SCHEDULED BUT NOT HEARD
PREVIOUS ACTION
SB 215 - No previous action to record.
SJR 19 - No previous action to record.
SB 211 - See State Affairs minutes dated 5/8/03.
HJR 22 - No previous action to record.
WITNESS REGISTER
Ernesta Ballard
Commissioner, Department of Environmental Conservation
410 Willoughby
Juneau, AK 99801-1795
POSITION STATEMENT: Testified on SB 215
Deven Mitchell
Debt Manager, Treasury Division
Department of Revenue
PO Box 110400
Juneau, AK 99811-0400
POSITION STATEMENT: Testified on SB 215
Kristin Ryan
Director, Division of Environmental Health
Department of Environmental Conservation
410 Willoughby
Juneau, AK 99801-1795
POSITION STATEMENT: Testified on SB 215
John MacKinnon
Deputy Commissioner, Highways and Public Facilities
Department of Transportation &
Public Facilities
3132 Channel Dr.
Juneau, AK 99801-7898
POSITION STATEMENT: Testified on SB 215
Tom Livingston
No address provided
POSITION STATEMENT: Testified on SB 215
Roger Painter
Alaskan Shellfish Growers Association
No address provided
POSITION STATEMENT: Testified on SB 215
Julie Decker
Executive Director, South East Regional Dive Association
No address provided
POSITION STATEMENT: Testified on SB 215
Senator Georgianna Lincoln
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Sponsor SJR 19
Mark Gnadt
Aide to Representative Eric Croft
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Testified on SJR 19
Bob Bartholomew
Chief Operating Officer
Alaska Permanent Fund Corporation
P.O. Box 25500
Juneau, AK 99801
POSITION STATEMENT: Testified on SJR 19
Petria Falkenberg
Box 3293
Kenai, AK 99611
POSITION STATEMENT: Testified on SJR 19
James Price
P.O. Box 7043
Nikiski, AK 99635
POSITION STATEMENT: Testified on SJR 19
Fred Sturman
Box 513
Soldotna, AK 99669
POSITION STATEMENT: Testified on SJR 19
Roger Shannon
11823 Kenai Spur Highway
Kenai, AK 99611
POSITION STATEMENT: Testified on SJR 19
Lori Churchill
Box 7043
Nikiski, AK 99635
POSITION STATEMENT: Testified on SJR 19
Ruby Kime
Box 334
Ninilchik, AK 99639
POSITION STATEMENT: Testified on SJR 19
Craig Tillery
Assistant Attorney General, Environmental Section
th
1031 W. 4 Ave, Suite 200
Anchorage, AK 99501
POSITION STATEMENT: Testified on SB 211
Senator Johnny Ellis
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Co-Sponsor SJR 15 and testified on HJR 22
Joe Stewart
Aide to Representative David Guttenberg
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Testified on HJR 22
John Brading
No address provided
POSITION STATEMENT: Testified on HJR 22
Frank Turney
No address provided
POSITION STATEMENT: Testified on HJR 22
Scott Calder
No address provided
POSITION STATEMENT: Testified on HJR 22
Jodi Olmstead
No address provided
POSITION STATEMENT: Testified on HJR 22
Graham Storey
Nome Chamber of Commerce
No address provided
POSITION STATEMENT: Testified on HJR 22
Jennifer Ruddinger
Executive Director ACLU
No address provided
POSITION STATEMENT: Testified on HJR 22
Tim Burgess
U.S. Department of Justice
No address provided
POSITION STATEMENT: Testified on HJR 22
Rynnieva Moss
Aide to Representative John Coghill
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Testified on HJR 22
ACTION NARRATIVE
TAPE 03-30, SIDE A
CHAIR GARY STEVENS called the Senate State Affairs Standing
Committee meeting to order at 1:40 p.m. Present were Senators
Fred Dyson, John Cowdery, Gretchen Guess and Chair Gary Stevens.
The first order of business to come before the committee was SB
215.
SB 215-SEAFOOD AND FOOD SAFETY LABORATORY
ERNESTA BALLARD, Commissioner of the Department of Environmental
Conservation, said she would testify to the program aspects of
the bill. She gave the following testimony:
Imagine it is 5:00 pm on Friday, you are a dairy
processor and your pasteurization equipment breaks
down. The scenario is not uncommon. To fulfill your
school and military contracts, FDA requires that a
state lab certify your equipment is operating
correctly again and test the product to make sure.
Milk can't wait until Monday morning. The Seafood and
Food Safety Laboratory staff is there to make sure
your product is safe for consumption and makes it to
market while it's fresh. Ours is the only lab
certified in Alaska to test dairy products to ensure
successful pasteurization so they can be sold to the
military and schools.
SB 215 provides the funding mechanism to build a new
Seafood and Food Safety Lab. The expense is already in
our proposed capital budget. The facility we have
leased for 34 years will not be available after 2006.
It is overcrowded and not fully compliant with safety
codes and laboratory design standards. It was
developed in Palmer when the principal lab business
was agriculture and dairy. In recent years
entrepreneurs in coastal Alaska have developed a wide
variety of value added seafood products adding a
significant and time sensitive testing responsibility
for our lab. Our proposed new lab will be in Anchorage
where valuable hours can be saved between sample
collection and test results for raw and live seafood
industries.
A core function of government is protection of human
health and the environment. Government must be
prepared to respond to unanticipated outbreaks of
disease or the presence of contamination in food,
water and animals. The Alaska seafood and food safety
laboratory fulfills these functions. We analyze raw,
finished, and value-added food products for bacteria,
chemicals, and toxic contaminants.
The laboratory protects Alaskans by monitoring animals
for zoonotic diseases-transferred from animals to
humans-such as brucellosis. Lab technicians test food
products for botulism, salmonella, listeria and fecal
coliforms and also test public drinking water for
giardia, a common contaminant found in surface water,
and cryptosporidium.
The laboratory supports the seafood, dairy and
shellfish industries.
To successfully market Alaska's high quality shellfish
and seafood, the public must be assured they are safe.
Federal requirements for shellfish are very strict
because the health risks are great. Through monitoring
and testing the lab assures the safety of Alaska's
growing shellfish industry, including geoducks,
mussels and oysters. Through new PSP sampling and
testing procedures, live geoduck sales have begun to
enable the industry to ship approximately 50-60
percent of its geoduck quota live, increasing its
value three fold. When the industry reaches its goal
of 85 percent live shipment, the industry's value will
be worth approximately $2.5 million.
A perfect example of how this lab has and will
continue to help Alaska's economy grow is the farmed
oyster industry. As I'm sure you all know, Alaskan
oysters are top quality and easily merit their good
wholesale price. In the recent past, this industry did
not exist. DEC lab staff are some of the experts who
helped oyster farmers get started. With our
assistance, farmers set up operations that met
National Shellfish Sanitation standards, which must be
met to sell raw product. Those standards require that
DEC sample the growing water to ensure it is free from
contamination. As the industry grew, it became more
difficult for our staff to travel to remote locations
for the collection of water samples. We developed a
method for harvesters to collect their own water
samples thereby increasing the opportunity for growing
areas to be approved. The laboratory is also providing
proof that Alaska's commercial fish species are of the
highest quality and free of contaminants by monitoring
commercially caught species for pollutants. Over 600
samples were collected last year and the results will
be available next month.
The laboratory supports Alaska's private labs by
certifying them to conduct drinking water analysis. We
train 190 private lab staff a year on how to test
drinking water according to EPA standards, and assist
private laboratories in obtaining certification and
approval to perform federally regulated tests.
We cannot depend on private laboratories to maintain
testing and analytical capabilities for situations
when there is no profit margin. When private markets
develop, our laboratories get out of the business. For
example, the Seafood and Food Safety Laboratory does
not test drinking water for fecal coliform because
private labs are capable of conducting those tests.
The DEC laboratory only conducts tests that are
federally required to be done by a state lab or are
not provided elsewhere in the state.
The health of Alaskans and the success of Alaska's
seafood, shellfish and dairy industries are contingent
upon the smooth and continued operation of the seafood
and food safety laboratory. Through our testing,
monitoring, and technical support, the laboratory
assures the health of Alaskans and our environment,
and supports the development of our abundant
resources.
CHAIR GARY STEVENS announced he had a memo from legal counsel
suggesting an amendment to change the title. He asked for a
motion to adopt the committee substitute (CS).
SENATOR JOHN COWDERY made a motion to adopt CSSB 215 \D version.
There being no objection, it was so ordered.
SENATOR COWDERY asked why certificate of participation bonds
(COPs) rather than general obligation bonds were suggested as
the financing mechanism.
DEVEN MITCHELL, Treasury Division Debt Manager with the
Department of Revenue, explained that COPs are a type of
financing tool that are used for specific projects that don't
warrant a statewide election. The Legislature authorizes the
appropriation of the lease payment on an annual basis. They are
a lower obligation than general obligation bonds (GO), which
carry the full faith and credit of the state.
SENATOR COWDERY referred to the fees listed on page 2 and asked
whether they were typical for this type of funding and where the
fees go.
MR. MITCHELL explained the costs associated with COPs are the
project itself and the cost of issuing the bonds. [Balance
indiscernible due to background noise.]
SENATOR COWDERY asked if the fees would go directly to the lab.
MR. MITCHELL said the fees on page 2, lines 12-17 are
interrelated. They are the sizing of the COPs and anticipate the
reinvestment of bond proceeds over the course of the project
period. There is a $140,000 estimate on earnings on those
proceeds so the issuance amount is $14,145,000 identified on
line 9. That is added to the $140,000 in anticipated earnings
for a project total size of $14,285,000. The $1,391,000 on line
15 is the anticipated principal and interest payments for the
COPs that would be paid on an annual basis. The $20,862,000 on
line 16 is the total principal and interest repayment that would
occur over the 15 year life of the certificates.
SENATOR COWDERY asked whether any pass-through federal funding
was available.
COMMISSIONER BALLARD said they were not aware of any.
SENATOR COWDERY asked how many employees were in the existing
lab and how many would be in the new lab.
KRISTIN RYAN, Director for the Division of Environmental Health,
replied there are 25 employees in the Palmer lab. Eleven
positions are specifically lab related and would move to the new
facility. Fourteen would remain in the Palmer facility and one
additional wastewater specialist would join that facility.
SENATOR COWDERY said he thought the lease was due to expire at
the Palmer lab.
MS. RYAN replied the current lease expires in 2006. Some non-lab
related personnel have already moved to another facility and
more would do so.
SENATOR FRED DYSON referred to the 1997 Department of
Administration (DOA) determination regarding long-term leases
and statutory rent reduction requirements and asked for an
explanation.
COMMISSIONER BALLARD admitted there was no one present that
could provide an explanation.
SENATOR DYSON remarked it would be easier to change the statutes
than to move to a new facility. He reviewed the Department of
Revenue (DOR) fiscal note and asked if it was correct that
$200,000 per year would pay back the COPs.
MR. MITCHELL admitted the numbers in the fiscal note from DOR
and those in the bill differ slightly. The fiscal note shows
$1,362,800 being paid annually for debt service.
SENATOR DYSON asked where that money would come from.
MR. MITCHELL said it would come from the general fund.
SENATOR DYSON asked what the annual total would be for operating
expenses, including debt reduction, utilities and other costs.
MS. RYAN explained it would be a combination of the operating
costs and the debt servicing costs.
SENATOR DYSON noted that would amount to roughly $1.6 million
per year. He asked where the public health lab is located.
COMMISSIONER BALLARD replied it is next door to the proposed
lab.
SENATOR DYSON asked how much is paid for the current lease at
the Palmer facility.
COMMISSIONER BALLARD said it is considerably less.
MS. RYAN estimated current payments were closer to $100,000 per
year.
SENATOR DYSON asked when the state would finish principal
payments for the COPs.
COMMISSIONER BALLARD advised the term is 15 years.
CHAIR GARY STEVENS thanked Senator Dyson for comparing the
projected $200,000 payment to the current $100,000 lease
payment.
SENATOR GRETCHEN GUESS said the department was speaking of
$200,000 per year in utilities and maintenance, but they said
the lease purchase was $100,000, not the utilities and
maintenance.
She asked why there was such a difference between the current
operating costs and the projected costs.
MS. RYAN explained that the new facility meets all codes for
heating, ventilation and air handling and includes an auxiliary
power source. All of which accounts for the cost differential.
SENATOR GUESS stated she was surprised that only half the
employees would move from the Palmer facility and asked which
jobs would stay.
MS. RYAN said there are two food safety inspectors, four
pesticide program employees, a state and a federal veterinarian
and a variety of indirectly related DEC positions that don't
necessarily rely on the lab services.
SENATOR GUESS asked about the resolution to examine a facility
near the airport for the lab.
CHAIR GARY STEVENS said Mr. Mitchell's letter addresses the ASI
consideration [SCR 6]. He asked the commissioner to comment on
the status of that resolution.
COMMISSIONER BALLARD explained that the department conducted a
side-by-side analysis of remodeling some of the facility
occupied by Alaska Seafood International that is located by the
airport versus the stand-alone facility that is on state owned
property at Tudor and Boniface and next to the public health
lab. Upon reviewing the analysis, the governor recommended that
DEC proceed with the stand-alone facility.
SENATOR GUESS requested a copy of the analysis and asked if
there was a reason to set the amount in statute rather than an
giving an "up to" figure. She then asked what assurance the
public has that the cost would be at or below the projection.
MR. MITCHELL said that, from his perspective, the "sum certain"
is the requirement, by law, that the Legislature approves an
amount. It could be expressed as a "not to exceed amount" but
the Legislature has preferred to know more definitively how much
they would spend. This bill has had a lot of effort expended to
accomplish the new facility and to help that DOR provided an
estimate of investment earnings on the proceeds while they are
being drawn down. Although it's only $140,000, current budgetary
conditions make it desirable to make sure that the authorizing
body of the Legislature is aware of where the money would go.
COMMISSIONER BALLARD informed the committee the site is
prepared, the utilities are stubbed to the site, and the
drawings are at 70 percent completion. The project has been in
the works for seven years so many of the design and construction
uncertainties have already been addressed.
JOHN MACKINNON, Deputy Commissioner with the Department of
Transportation & Public Facilities, said the state health lab
was recently completed and is a similar facility with regard to
code and laboratory requirements. They have accurate numbers on
the cost of that facility and the proposed lab would likely be
similar in square foot costs. There are contingency pockets in
the overall budget process to take up any unforeseen
circumstances.
SENATOR COWDERY asked if there were private sector facilities
that could meet the need.
DEPUTY COMMISSIONER MACKINNON said he would compare leasing a
facility to use as a food lab to taking a warehouse and turning
it into a hospital. It would be a tremendous amount of work to
meet the code requirements.
SENATOR COWDERY asked if anyone had approached the private
sector.
TOM LIVINGSTON, project architect, said his company did a
feasibility study for leasing versus building several years ago
and they determined they would be faced with constructing a
building within a building if they were to lease space. Overall,
lease costs were higher than ownership costs.
SENATOR COWDERY said he supported the need for the facility.
SENATOR GUESS asked how lab use would differ in the proposed
facility because the operating expenses are projected to be ten
times higher.
MS. RYAN explained the current laboratory does not meet
laboratory or OSHA standards, which means their results are at
risk and could be refuted. Although there might be an increase
in samples tested at the new lab, the main thing the public is
getting for the increased cost is knowledge that the results are
accurate.
ROGER PAINTER, representative of the Alaska Shellfish Growers
Association, spoke in support of SB 215. With regard to
contracting services to the private sector, he said that there
are no private labs in the country that conduct paralytic
shellfish poison tests or that can process water quality samples
for marine waters.
Since the lab facilities were originally leased in Palmer, the
clientele has shifted from agriculture to seafood. Because
seafood samples must be in the lab within 30 hours from the time
they are collected, having the lab in Anchorage rather than
Palmer would make it easier for businesses such as his to fit
within the time constraints.
He commented that the current lab was hopelessly antiquated when
he visited it last 15 years ago.
ROGER SHANNON from Kenai asserted that the lab should be placed
in the ASI [Alaska Seafood International] building.
JULIE DECKER, executive officer from the Southeast Regional Dive
Fishers Association, testified via teleconference in support of
the bill. She said the proposed lab is economically vital to the
dive fishery and the current lab staff does excellent work.
SENATOR COWDERY made a motion to move CSSB 215(STA) and attached
fiscal notes from committee with individual recommendations and
asked for unanimous consent.
CHAIR GARY STEVENS asked for a roll call.
SENATOR DYSON asked to speak to the issue and stated it almost
defies logic to build a new stand-alone lab rather than placing
it in the state owned building that houses ASI. Second, he said
he is intimidated by the 15 year obligation and has trouble with
the engineering estimates that make it almost as expensive to
put the lab in the existing building as it is to build a new
free standing building. In his view, the ASI building is a
monument to how poorly government does when it gets involved in
areas that should be left to the private sector.
SENATOR GUESS asked what the design costs were for the state
owned building.
MR. MACKINNON said about $1 million was spent in design costs
for the stand alone building and those design costs aren't
adaptable to putting the facility in the ASI building.
SENATOR GUESS asked if a true analysis would show that one would
be about $15 million and the other about $13.3.
MR. MACKINNON agreed if you were to start from ground zero.
SENATOR GUESS said, sunk costs are sunk costs, but from the
marginal cost perspective the ASI building looks to be a better
long term option. She questioned why the Administration decided
on the stand-alone building.
CHAIR GARY STEVENS asked Senator Cowdery to remove his motion so
Mr. MacKinnon could answer the question.
SENATOR COWDERY removed his motion to move the bill from
committee.
MR. MACKINNON stated that the ASI building would be a better
option if the seafood lab were needed for just 15 years, but at
the end of 15 years there would be operating costs to consider.
SENATOR COWDERY commented placing the lab in the ASI building
would limit future tenants.
CHAIR GARY STEVENS noted Mr. Mitchell wrote a memo on March 28,
2003 that said the seafood lab would use just five percent of
the ASI building and locating the lab there would make it
difficult to find a tenant for the rest of the space.
SENATOR DYSON asked what portion of the operating costs would be
recovered through customer fees.
COMMISSIONER BALLARD replied they might recover between 25 and
30 percent in fees by next year. They are raising fees as
quickly as possible, but some of the projected increases require
statutory change. Current fee income is about $100,000 per year
and with statutory changes they hope to increase it to about
$300,000.
She added that AIDEA (Alaska Industrial Development and Export
Authority) only considered housing the lab in the ASI building
in the last year and by that time the $1 million to design the
stand-alone building was already spent, which is why there isn't
a true side-by-side comparison.
CHAIR GARY STEVENS said the current questions were of a
financial nature and he would like the Finance Committee to
address them.
SENATOR COWDERY made a motion to move CSSB 215(STA) and attached
fiscal notes from committee and asked for unanimous consent.
CHAIR GARY STEVENS asked if there was any objection. There being
no stated objection, CSSB 215(STA) moved from committee.
SJR 19-CONST. AM: PERMANENT FUND INCOME
SENATOR GEORGIANNA LINCOLN, bill sponsor, advised that HJR 3 was
the companion bill and she had aide Mark Gnadt with her to
answer technical questions. She paraphrased from the sponsor
statement.
SJR 19 proposes a constitutional amendment that would
give constitutional protection to the dividend program
of the Alaska Permanent Fund. It ensures the Permanent
Fund Dividend will endure.
This resolution is a reiteration of the popular
initiative proposed by former Governor Jay Hammond
late last year. SJR 19 would require a majority vote
by Alaskans before the Legislature could spend any of
the Permanent Fund earnings that currently go to the
dividend or to inflation proof the fund.
The Resolution would also maintain the distribution
formulas used to calculate the dividend that were in
place on July 21, 2002. This will further guarantee
the Permanent Fund Dividend Program will remain
intact.
It has been said that permanently protecting the
dividend program might make the fund susceptible to
federal taxation. Section 3 of SJR 19 will immediately
repeal Sections 1 and 2 if the IRS determines the fund
is taxable.
The Permanent Fund dividend represents approximately
one-eighth of Alaska's economy, and is the most direct
link between the people of Alaska and the resources
they own. With the ongoing budget deficit, it is in
the interest of Alaskans to constitutionally protect
our dividend on which many people depend and with
which they contribute to a healthy economy.
She noted the fiscal note from the Division of Elections shows
an expenditure of $1,500 in 2005 to add the information to the
Official Election Pamphlet. She discussed the sectional analysis
prepared by Tamara Cook. [Copy in bill file.]
CHAIR GARY STEVENS asked her to comment on the IRS issues.
MARK GNADT, aide to Representative Eric Croft, explained that
certain people are concerned that if the dividend were placed in
statute thereby removing the appropriation power from the
Legislature, then the dividend would become more like a
corporate dividend as opposed to a dividend for the public good.
The IRS has made no specific findings in that regard and
although there is some history that substantiates both sides,
none are closely related to the Alaska Permanent Fund. The
sponsors believe the IRS is waiting for the state to make a move
before they make any determination. That's why they put the
provision in Section 3, which would suspend the amendments
immediately if the IRS were to initially determine that any or
all of the fund is taxable. If the final judgment finds that the
fund is not taxable, the suspension terminates. If it finds that
the fund is taxable, the suspension remains in effect.
SENATOR JOHN COWDERY said the dividend was never considered an
entitlement to the fund and should never be considered as such.
He asked whether a tax attorney had been consulted.
SENATOR LINCOLN replied they asked legislative legal to respond.
SENATOR COWDERY advised this is a high-risk gamble and there are
other options that would assure a dividend and not risk
taxation.
SENATOR LINCOLN said the point is well taken.
BOB BARTHOLOMEW, Chief Operating Officer with the Alaska
Permanent Fund Corporation, advised he had three comments.
· Historically, the trustees have been concerned about the
tax-exempt status of the fund. Enclosed in the committee
packets is the 1998 opinion from the Attorney General's
Office related to the tax-exempt status of the fund. With
regard to the clause to repeal the amendment, he cautioned
that once the process is started there is no guarantee the
IRS wouldn't look at the current status of the fund and
current issues unrelated to the constitutional amendment.
· They appreciate that SJR 19 is a proposal that is separate
from the Board of Trustee proposal that deals with
modernizing distribution of the fund related to the
investment management perspective. They encourage continued
separation of the issues.
· As the policy debate continues regarding protecting the
dividend, they encourage looking at the best way to do that
mechanically. This proposal is to use existing statutory
language, but the corporation believes the existing
statutes cause problems because they were designed for an
investment fund of 20 years ago, which is completely
different that the fund they guide today. Part of the
board's recommendation is to update the statutes.
SENATOR GRETCHEN GUESS asked for verification that changing the
constitution to POMV [percent of market value] doesn't guarantee
the dividend program it is simply a different management payout.
MR. BARTHOLOMEW explained that the current proposal in the
Senate and House would guarantee an annual distribution from the
permanent fund, not what the distribution would be used for.
SENATOR GUESS asked if there had been any communication with the
IRS.
MR. BARTHOLOMEW said it is his understanding that they have had
no direct communication with the IRS.
PETRIA FALKENBERG from Kenai testified via teleconference in
support of SJR 19 because it protects the PFD. The PFD belongs
to the people and they should have a say in how the government
spends its resources.
JAMES PRICE testified via teleconference in support of SJR 19.
He said it's important to give the people a chance to vote on
this important issue.
FRED STURMAN, testified via teleconference that this would take
money out of legislators hands and he was in favor of that.
ROGER SHANNON testified via teleconference and said he agreed
with the other speakers and urged passage of SJR 19.
LORI CHURCHILL testified via teleconference to urge passage of
SJR 19. She advised she was sending written testimony as well.
RUBY KIME from Ninilchik testified via teleconference in support
of SJR 19. She said she favored restricting the amount of money
available to the Legislature.
SENATOR COWDERY asked that information regarding how far back
the IRS would look if they decided the fund was taxable be
passed to the Judiciary Committee.
SENATOR LINCOLN said she would look for that information.
SENATOR GUESS made a motion to move SJR 19 and attached fiscal
notes from committee with individual recommendations. There
being no objection, it was so ordered.
SB 211-REGULATIONS: NOTICE AND DISTRIBUTION
CRAIG TILLERY, Assistant Attorney General, stated he was
available for questions.
CHAIR GARY STEVENS asked Mr. Tillery if passage of the bill
would result in substantial savings.
MR. TILLERY advised they expected the savings to be in the range
of $215,000.
SENATOR GRETCHEN GUESS asked how general circulation of a
newspaper would be judged.
MR. TILLERY advised the current rule is that notices are placed
in just one newspaper that has general circulation, which is
judged by the extent to which they reach the public. They look
at where likely interest would be for a particular bill and have
determined that Anchorage, Fairbanks and Juneau newspapers would
all technically qualify under the provision.
SENATOR GUESS asked if a department head would make the judgment
on general circulation.
MR. TILLERY said that was correct.
SENATOR GUESS asked if they knew how many Alaskan households
have Internet access and what computer requirements there would
be to use the web site.
MR. TILLERY said any computer connection would work and people
have access to the Internet at home, at work and at the public
library. He said access is pervasive, but he didn't have data on
the number of people with Internet access.
SENATOR GUESS asked whether the bill would alter DOT [Department
of Transportation & Public Facilities] notices to communities
regarding traffic issues.
MR. TILLERY said this bill deals only with regulations.
SENATOR GUESS asked if there was a reason that only the pipeline
regulations were mentioned and not other RCA regulations.
MR. TILLERY said they took out the regulations that are
technical and almost exclusively of interest to industry and not
of general public interest.
SENATOR GUESS advised they might want to rethink the pipeline
act because it is becoming more consumer based and of greater
interest.
SENATOR JOHN COWDERY made a motion to move SB 211 and attached
fiscal note from committee and asked for unanimous consent.
SENATOR GUESS objected.
CHAIR GARY STEVENS called for a roll call. Senators Cowdery,
Dyson and Chair Gary Stevens voted yea and Senator Guess voted
nay. SB 211 moved from committee.
HJR 22-PATRIOT ACT AND DEFENDING CIVIL LIBERTIES
SENATOR JOHNNY ELLIS, sponsor of SJR 15, stated his resolution
was superceded by action in the House. He described this as a
bi-partisan effort that makes a strong statement.
JOMO STEWART, staff to Representative David Guttenberg, said the
original resolution was put through quickly after September 11
and a number of the provisions seriously undermine liberties and
civil rights. There is a growing groundswell throughout the
country to have the Act reviewed and perhaps amended. Currently
there is a move to take out some of the sunset provisions that
are in the Act and there is also a Patriot Act II that would
expand on some of the surveillance provisions. This would
support Representative Don Young in his effort to amend the
legislation.
CHAIR GARY STEVENS announced it was his intention to move the
resolution out of the committee that day.
JOHN BRADING testified via teleconference in support of HJR 22.
FRANK TURNEY testified via teleconference in support of HJR 22.
TAPE 03-31, SIDE A
5:10 pm
SCOTT CALDER testified via teleconference in support of HJR 22
although he noted he didn't agree with removing the term
"probable cause" as the criteria and replacing it with the term
"reasonable suspicion."
JODI OLMSTEAD testified via teleconference in support of HJR 22.
GRAHAM STOREY from Nome testified via teleconference to say he
did not support HJR 22. Citizens may gather in groups and they
may criticize their government. He urged Alaska to pass a
resolution in support of the right not to be attacked by
terrorists.
JENNIFER RUDDINGER, Executive Director of the Alaska Civil
Liberties Union (ACLU), testified via teleconference that the
ACLU supports HJR 22 including the words "reasonable suspicion."
MR. TIMOTHY BURGESS, U.S. Department of Justice attorney for
Alaska said he found out about the hearing the previous evening
from Senator Guess. He stated:
One of the responsibilities of my office is to enforce
federal law, including the Patriot Act, so I was a
little concerned to make sure that both sides of the
story in regard to this act and what the federal
government is doing in conjunction with our state and
local colleagues is brought before your committee
before this resolution is passed. I think there are a
lot of misconceptions being offered about what the
Patriot Act does or doesn't do and that is part of the
concern I have. I think, for instance, there is
concern that under the Patriot Act federal agents are
now able to review library records and books checked
out by U.S. citizens. If you read the act, that's
absolutely not true. In order to do that, agents have
to get a court order approving their looking for those
records. It can't be for U.S. citizens. It can't even
be for domestic crimes or domestic terrorism. It has
to be in regard to an international terrorism
investigation after a court approves us seeking those
records. So, that just highlights some of the
misconceptions that are being, I think, used in order
to support resolutions such as this.
I'm also concerned, for instance, with the suggestion,
as I read it, from this proposed resolution, that
state employees can't cooperate with federal
authorities unless there is a reasonable suspicion of
a violation of Alaska law. Well there are a number of
differences between Alaska law and federal law but
there may well be criminal activity that concerns a
federal law related to terrorism and I think one
reading of this proposed resolution might chill state
employees from cooperating with their federal
colleagues in trying to prevent another terrorism
incident. So, those are a few of the concerns I have
and if, Mr. Chairman, if you or the other Senators at
some point would like additional information from me
I'd be happy to provide that. I didn't prepare any
formal testimony today because I wasn't really aware
that this was going to be considered today. But, I am
concerned that the Senate reach out to the law
enforcement community, which is charged with the
responsibility for preventing another terrorism
incident like happened in September of 2001.
RYNNIEVA MOSS, aide to Representative John Coghill, said she
wanted to address several issues:
· The resolution says state resources would not be used to
enforce federal law, but that doesn't mean the state
couldn't or wouldn't cooperate in an investigation.
· Congressman Don Young is planning to introduce legislation
to remove some of the provisions of the Patriot Act.
· During the Revolutionary War, Benjamin Franklin said, "They
that can give up essential liberty to obtain a little
temporary safety deserve neither liberty nor safety."
SENATOR DYSON made a motion to move CSHJR 22(RLS) and attached
fiscal note from committee with individual recommendations.
There being no objection, it was so ordered.
There being no further business to come before the committee,
Chair Gary Stevens adjourned the meeting at 5:25 pm.
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