HOUSE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE April 23, 1997 8:04 a.m. MEMBERS PRESENT Representative Ivan Ivan, Chairman Representative Fred Dyson Representative Scott Ogan Representative Joe Ryan Representative Jerry Sanders Representative Al Kookesh MEMBERS ABSENT Representative Reggie Joule COMMITTEE CALENDAR * HOUSE BILL NO. 241 "An Act relating to payment assistance for costs of residing in the Alaska Pioneers' Home, and providing that certain income and assets of a resident shall be disregarded in determining payment assistance, including income from any source in an amount up to $100, cash dividends and other income up to $2,000 received under the Alaska Native Claims Settlement Act, a permanent fund dividend, an amount for burial expenses of the resident, the resident's spouse and dependents of the resident, the primary residence of the resident's spouse or a dependent of the resident, and other property up to a total value of $5,000; and providing for an effective date." - MOVED HB 241 OUT OF COMMITTEE * HOUSE BILL NO. 162 "An Act relating to the sale or purchase of authentic Native handicrafts on certain licensed premises; and providing for an effective date." - HEARD AND HELD * HOUSE BILL NO. 38 "An Act relating to Statehood Act land selection conveyances to boroughs and unified municipalities." - SCHEDULED BUT NOT HEARD (* First public hearing) PREVIOUS ACTION BILL: HB 241 SHORT TITLE: PAYMENT OF COSTS ALASKA PIONEERS' HOME SPONSOR(S): REPRESENTATIVE(S) CROFT, Brice, Nicholia JRN-DATE JRN-PG ACTION 04/09/97 1041 (H) READ THE FIRST TIME - REFERRAL(S) 04/09/97 1042 (H) CRA, STATE AFFAIRS, FINANCE 04/23/97 (H) CRA AT 8:00 AM CAPITOL 124 BILL: HB 162 SHORT TITLE: BAN CRAFT BUYING ON LIQUOR PREMISES SPONSOR(S): REPRESENTATIVE(S) NICHOLIA JRN-DATE JRN-PG ACTION 02/27/97 509 (H) READ THE FIRST TIME - REFERRAL(S) 02/27/97 509 (H) CRA, JUDICIARY, FINANCE 04/23/97 (H) CRA AT 8:00 AM CAPITOL 124 WITNESS REGISTER REPRESENTATIVE ERIC CROFT Alaska State Legislature State Capitol, Room 430 Juneau, Alaska 99801 Telephone: (907) 465-4998 POSITION STATEMENT: Sponsor of HB 241. JAMES L. KOHN, Director Division of Alaska Longevity Programs Department of Administration P.O. Box 110211 Juneau, Alaska 99811-0211 Telephone: (907) 465-4400 POSITION STATEMENT: Testified on HB 241. TOM WRIGHT, Legislative Assistant to Representative Ivan Ivan Alaska State Legislature State Capitol, Room 418 Juneau, Alaska 99801 Telephone: (907) 465-3882 POSITION STATEMENT: Testified on HB 241. ANN ZENSON, Resident, Sitka Pioneer Home and; President, Resident Council Sitka Pioneer Home Sitka, Alaska 99835 Telephone: (907) 747-2105 POSITION STATEMENT: Testified on HB 241. ALTHEA BUCKINGHAM, Resident Sitka Pioneer Home Sitka, Alaska 99835 Telephone: (907) 747-8534 POSITION STATEMENT: Testified on HB 241. MARK NIELSON, Resident Sitka Pioneer Home Sitka, Alaska 99835 Telephone: Unavailable POSITION STATEMENT: Testified on HB 241. MARRY SINGER, Citizen 2144 Third Avenue Ketchikan, Alaska 99901 Telephone: (907) 225-4683 POSITION STATEMENT: Testified on HB 241. KATTARYNA BENNETT, Researcher for Representative Irene Nicholia Alaska State Legislature Juneau, Alaska 99801 Telephone: (907) 465-5025 POSITION STATEMENT: Testified on HB 162. DOUG GRIFFIN, ABC Board 550 West 7th Avenue, Number 350 Anchorage, Alaska 99501 Telephone: (9907) 277-8638 POSITION STATEMENT: Testified on HB 162. DON DAPCEVICH, Executive Director Citizen's Advisory Board on Alcoholism and Drug Abuse Box 110608 Juneau, Alaska 99811 Telephone: (907) 465-4410 POSITION STATEMENT: Testified on HB 162. ACTION NARRATIVE TAPE 97-19, SIDE A Number 016 CHAIRMAN IVAN IVAN called the House Community and Regional Affairs Standing Committee meeting to order at 8:04 a.m. Members present at the call to order were Representatives Dyson, Sanders and Ryan. Representatives Ogan and Kookesh arrived at 8:05 a.m. and 8:14 a.m. Representative Joule was absent. HB 241 - PAYMENT OF COSTS ALASKA PIONEERS' HOME CHAIRMAN IVAN indicated the committee would consider HB 241, "An Act relating to payment assistance for costs of residing in the Alaska Pioneers' Home, and providing that certain income and assets of a resident shall be disregarded in determining payment assistance, including income from any source in an amount up to $100, cash dividends and other income up to $2,000 received under the Alaska Native Claims Settlement Act, a permanent fund dividend, an amount for burial expenses of the resident, the resident's spouse and dependents of the resident, the primary residence of the resident's spouse or a dependent of the resident, and other property up to a total value of $5,000; and providing for an effective date." Number 082 REPRESENTATIVE ERIC CROFT came forward as sponsor to testify on HB 241. He stated that $100 a month is what some residents of the Pioneer Home have to spend. The Pioneer Home residents have become upset about the increase in fees for the services there. This legislation doesn't address all the difficulties related to these rising fees, but it does speak to what monies a resident who cannot pay the fees is allowed to keep for their own use. This is why this legislation is called the "Pioneer's Dignity Act." It allows Alaskan elderly to keep a certain (not opulent or excessive) bit of property which they've saved. The most important provisions allow a little bit of property to be retained by a resident, no more than $5,000 worth such as family jewelry, clothing, mementos, etc. It allows them to keep a certain amount of income they're entitled to such as the permanent fund dividend, native distributions and veterans distributions. The status of these income streams is unclear, but certainly the Pioneer Homes would have the right to seize these. This would be in the face of costs rising at these facilities to ensure that they have a minimal income of their own to spend. REPRESENTATIVE CROFT continued that the final provision of this legislation deals with a spouse living outside the home. He didn't believe that the state ever seized this asset, a home, but if one of the spouses needs to live in a Pioneer Home, this legislation allows that the other spouse can maintain their own home. There was some question as to whether the department could seize this home to satisfy the debt of a spouse living in a Pioneer Home. A typical situation involves a wife who can continue to take care of herself and a husband who can't. She can no longer take care of him, he goes into a Pioneer Home. If they don't have a substantial amount of assets and while she lives in this home, it could be liable for seizure. This legislation makes clear that the department cannot seize it. Number 413 JAMES L. KOHN, Director, Division of Alaska Longevity Programs, Department of Administration, came forward to testify on HB 241. This division oversees the Pioneer Homes and the Longevity Bonus Program. The administration is in favor of this legislation because it reflects the regulations they are putting forward at the present time. In fact, they've had regulation hearings on all of the items contained in this bill, as well as many more. The testimony which they received on these issues contained in the bill were positive or non-existent. People tended to testify more on the rate increases rather than on changes in the other sections of the regulations. MR. KOHN noted that some of the provisions in this bill reflect previous regulations in existence for the Pioneer Homes. Some of the provisions are new. The purpose of putting these items from regulation in statute is to give Pioneer Home residents, as the rates at the homes increases, stronger confidence that some of their assets and income will be preserved for them. Last year, Representative Rokeberg sponsored a statute that reflected the division's policies and regulations which prevented the administration from discharging any resident for an inability to pay. This reflected their regulations and their long-standing policy. Putting this into statute brought a certain amount of comfort to the residents. Number 615 REPRESENTATIVE JOE RYAN stated that he was disturbed the state turns people into paupers because of requiring individuals to pay for their care. He wondered if it was required in statute to take everything people own. MR. KOHN responded that this policy would be changed in these new regulations. This policy was never in statute or regulation. Any provisions for a spouse who remains in the community was nonexistent and they were expected to pay for any costs related to the care of a spouse living in a Pioneer Home. In their present regulations as put forth on April 16, the spouse in the community is allowed a number of things they weren't allowed in the past, such as keeping the home in which they live. They are also allowed to have $100,000 in assets beyond the home. They are able to keep a car and they are able to keep up to $2,000 a month in joint income. Many people in the past have stated that the spouse left in the community has been devastated financially by trying to keep up with the costs of the Pioneer Home. Number 790 REPRESENTATIVE JERRY SANDERS asked how long does a person have to be a pioneer in order to qualify for residence in a pioneer home. MR. KOHN stated that there have been a number of qualifications over the last 83 years, beginning with 5 years and at one point this requirement hit 25 years, most recently it was 15 years and now it's 1 year because of a legal challenge. A person needs only to live in the state and become a resident for 1 year before they can get on a waiting list. However, there are about 2500 people on the waiting list, of which, 200 are on the active waiting list. The latter would like to get into the home within the next 30 days if possible. Out of the 2500, 94 percent of them have been in the state over 15 years. Most of them much more than 15 years. Six percent have been in the state for less than 15 years. The average of this six percent is between 6 and 7 years they've been in the state. Number 900 REPRESENTATIVE SCOTT OGAN asked if the rate increases have contributed in the decline of people wishing to become residents on the residential side, rather than the nursing side. MR. KOHN responded that what they've experienced in the last four or five years is a great decline in the popularity of the residential side of the homes. People tend to want to stay in their own homes if they have no immediate direct care needs. He noted senior programs, such as Meals On Wheels, which help facilitate an elderly person staying in their homes. He also mentioned "Project Choice," where people are able to get nursing care in their homes. The residential side of the homes is provided at a bargain rate and the division has tried to staff these areas to make them more desirable. MR. KOHN continued that the most common need people have coming into the homes are related to Alzheimer's disease. Sixty-one percent of 600 residents have Alzheimer's disease. Eighty-eight percent of all the people who are in care areas, non-residential areas, have Alzheimer's disease. Many of these individuals are unable to do well in residential or basic assisted living. These services do not have 24 hour oversight. Number 1099 REPRESENTATIVE OGAN stated that he wanted to set the record straight on something. He was in his district last weekend and a spokesman for the Pioneer Home group was adamant that "you folks were blaming the Legislature for the increases." Since the budget has been cut the division was forced to raise the rates. He asked Mr. Kohn to explain this. MR. KOHN responded that the Pioneer Home Advisory Board in 1995, during a tour of the homes, spoke to the residents and their families about raising the rates to the cost of care. He added that this was not a new idea and noted a study conducted during the Hickel Administration without conclusion. The board decided at this time to advise Governor Knowles that the rates should be raised to the cost of care over a period of time which they stipulated to be seven years. The division has been doing this. In FY96, the amount the residents paid was $5.2 million out of an approximately $30 million dollar budget. In FY97, the residents will pay about $7.9 million dollars out of this same budgeted amount. In FY98, the residents are being asked to pay approximately $9.9 million dollars, about a third of the Pioneer Home budget. MR. KOHN offered that no one "would deny that the Legislature is looking for the general fund dollars to go down and for other dollars to come into the system and go up." He pointed out that it seemed the division did the right thing since the Legislature at this point in FY98 has cut the division's budget a little bit more than the "rock bottom" budget that they put forward in the governor's budget. It seems both entities are in close agreement and he didn't think there was anyone to blame. He stated that the Pioneer Home Board took it upon themselves to make this happen. He believed there was some complicity on the part of everyone because this shift of funding makes sense. To credit the idea, it could be attributed to the Pioneer Home Advisory Board because they thought it would be a fair thing to do. Number 1274 REPRESENTATIVE OGAN asked if this cut was $50,000 out of how much of a budget. MR. KOHN responded yes, that this amount was out of approximately $30 million. Number 1306 REPRESENTATIVE OGAN asked him if he had any idea what kind of percentage this was. MR. KOHN noted that it was a very small percent, but he pointed out that this was $50,000 on top of a $1.9 million reduction in general funds. It seemed as if they took an extra $50,000 on top of $1.9 million there would be agreement on the $1.9 million figure. Number 1306 REPRESENTATIVE OGAN asked if this $1.9 million cut was proposed by the governor. MR. KOHN responded that it wasn't a cut, but a transfer of general funds for program receipts. He affirmed that this was a governor proposed increase to the rates. Number 1326 REPRESENTATIVE FRED DYSON stated that he would like to get an historical perspective. He assumed that before the turn-of-the- century there was no governmental care for the elders, but this concept has accelerated since. He asked for a sketch of this progression. MR. KOHN responded that Alaska was ahead of the entire nation by beginning the Pioneer Homes in 1913. The Pioneer Homes have a wonderful history and they're a model to the nation. He used to be a nurse in nursing homes before they were regulated which was before the federal government became involved. The federal government became involved in the late 60's, early 70's, when they began to fund things. Before this it was all private pay but otherwise people were historically taken care of at home by large, extended families who weren't as mobile. They were also taken care of in assisted living homes which were non-medical, social model type homes where someone, usually a non-relative, who lived in the home to care for an elderly person. MR. KOHN continued that now seniors want to remain as independent as they can within an assisted living environment. Nursing facilities are mainly used now because of the focus the federal government has given them through medicaid funding. Number 1475 REPRESENTATIVE DYSON wondered if there was a disproportionate need for Pioneer Homes because so few folks in Alaska have extended families. He asked if there was a tradition in regards to Pioneer Homes when there is a family or an estate that either of these two would be responsible for deferring costs. MR. KOHN responded that he couldn't speak categorically to this but he did think that this was the case. He also affirmed Representative Dyson's summation about the lack of extended families and noted that the Pioneer Homes were formed mainly for miners who came to Alaska for the gold rush and stayed. At the present time the people cared for, by and large, in the homes are individuals with Alzheimer's disease. Families do what they can but there is a point where this situation becomes unmanageable. Number 1558 REPRESENTATIVE DYSON suspected that there was some debate that took place that as a policy decision to care for the elderly must be taken care of by the state. He asked when this shift took place? MR. KOHN responded that he thought that this took place during the 60's of "Johnson's Great Society" with the on-set of medicare and medicaid. This was when the funding for long term care began in nursing homes. The federal government is now looking at waivered programs, such as "Project Choice," which is a waivered medicaid program allowing the care provided in a person's home so that they don't have to go into a nursing home. This has been very successful with about 300 participants. For a small amount of money, comparatively, these people are being cared for in their homes where otherwise they would have to be housed in a special facility to hold these 300 people with all the added expenses. Number 1656 REPRESENTATIVE DYSON asked if there was a policy decision collectively made that when a senior goes into one of these facilities that the children of the resident have no requirement to support their care financially. MR. KOHN noted that in the non-pioneer home facilities, skilled nursing care facilities, these are funded mostly by medicaid. Eighty-five percent of the people in these facilities are on medicaid which means they have to "spin-down" all of their assets. Medicaid does not look to the family members of the senior, but to the assets of the individual and it may look at the assets of the spouse, however, many of the "things that I explained to Representative Ryan that we're doing with the spouse is also done in medicaid." The answer to the question is "no." No one goes after the family members for financial support. Number 1724 REPRESENTATIVE AL KOOKESH thanked the sponsor of this legislation. He thought it was a great bill and one to make Alaskans proud. One of the things they need to do is recognize the pioneers' contribution to the state. He understood that this legislation does two things. It allows the residents of these homes to keep their permanent fund check which is important to all residents. Every Alaska should be able to keep it. He noted that some of the committee members might be concerned about the ANSCA distributions that are also allowed to be kept. Very few residents of the state receive up to $2,000. This might not be true in Southeast but under federal regulation individuals may receive up to $2,000 but this amount also includes a congressional waiver of up to this amount for food stamps and social services. Otherwise, very few residents of the state which are ANSCA members will even receive $2,000. REPRESENTATIVE KOOKESH said that Alaska Natives usually lead in prison population, for example, but this is one of the few areas of the state where Alaska Natives aren't the dominant population in the Pioneer Homes. One of the nice things about the Alaska Native community is that they take care of their own. Almost every community that he's aware of in Southeast has an elderly person at home or a grandparent will stay with children. Very few Native people use the Pioneer Home unless they have a severe case of Alzheimers Disease. Number 1855 REPRESENTATIVE RYAN stated that this was fine bill, but noted the lack of a fiscal note. MR. KOHN stated that the fiscal note his department provided had a zero fiscal impact. This legislation is a reflection of regulation which will be place July 1, therefore, whether this bill is in place or not, the intent of the legislation will be in place through regulation. It is very important to also have this concept in statute ensuring a sense of security to the residents of the Pioneer Home. MR. KOHN continued that if they figured the cost of the regulation, it would be very hard to figure. Right now they do consider the permanent fund as income. They have about 130 people who are on the stipend program. They don't know how many more people they can anticipate as residents. This legislation will not increase their costs. The regulations increase their cost though but it will be very minimal. Number 1944 TOM WRIGHT, Legislative Assistant, Chairman Ivan, stated that they received a memo at the beginning of session regarding the request of fiscal notes which all have to go through the governor's office. What Mr. Wright placed in the committee's packet is the request for a fiscal note. According to the memo from leadership, this request will suffice until a fiscal note is generated. Number 1984 REPRESENTATIVE OGAN stated that he had no problem with the ANSCA. This is a settlement which the Native population is entitled to. He thought that the Native people's example of taking care of their elderly should be followed by everyone. He thought this was a wonderful example to follow. He asked what the future of the Pioneer Homes was. He noted there was an attempt to change the name of these facilities to "Dementia...," he couldn't remember the exact terminology proposed. It seemed to him that the administration was setting a policy that they don't want to be in the residential business but essentially into the full-time nursing care business. MR. KOHN responded that the Pioneer Home Advisory Board last September, in the tour of the homes, heard from a number of people who pointed out the large population of Alzheimers Disease patients in the home now. They suggested these were no longer Pioneer Home facilities and thought the name should be changed. When the Pioneer Advisory Board deliberated on what they'd heard in public hearings, they fairly reluctantly decided that they had better pass onto the governor some advise about what people were saying. He referred to a letter they wrote the governor regarding the same and recommended over the next few years that thought should be given to possibly changing the name of the Pioneer Homes to reflect what the Pioneer Homes had become. This paragraph is written in very hesitant and reluctant terms, but they believed it was their duty to pass on what had been communicated to them. MR. KOHN continued that a new name had not been suggested. Many of the people who came forward to suggest a name change after reading the letter to the governor said it was a terrible idea. He said they would love to bring more clients into the residential program of the homes. They are very much a business now collecting rent which they base their operation. This program does not require direct care and people don't want it. There hasn't been a change in policy. They must fill the beds in order to operate this business. If there is lost revenue they are unable to pay the staff. It's important that they provide a service to the public that the public wants and this is care. They are gearing up to use those rooms that are empty for higher levels of care. Number 2238 REPRESENTATIVE SANDERS voiced his support of this bill and was seriously considering becoming a co-sponsor of it. He asked about the concept of grand-fathering individuals into the program at a fixed rate. Many of the individuals who moved into these facilities did so with a different understanding of what the costs would be. MR. KOHN responded that there might be some legal problems with allowing various rates of people who enroll into the program at different times. This would mean two tiers, people who came in before a certain date and then the people on the waiting list would need to be considered but can't because of limited space. This might create a discrimination problem. The other consideration is money. The Pioneer Home system needs the revenue, the residents are earmarked to finance a third of the homes in FY98 and if they grandfather people in this revenue wouldn't be there. They would be in financial trouble as far as operating the homes. Number 2317 REPRESENTATIVE OGAN asked what the life span of a person is who moves into these facilities. MR. KOHN responded that the average age of a resident coming into the home is between 83 and 84 years of age. The average age in the homes is between 86 and 87 years of age. There is a vacancy rate between 180 and 200 people out of 600 per year. Number 2341 REPRESENTATIVE RYAN responded to the concept that Pioneer Homes are a business and noted that businesses evaluate themselves and what their overhead is. He asked if the staff working for the homes receive comparable or better wages than those in the private sector. MR. KOHN responded that the Alaska Hospital and Nursing Home Association does a yearly study on compensation packages for similar jobs. They've seen that the management of the Pioneer Homes receive quite a bit less in compensation compared to administrators of long term care facilities. He did note that these individuals are a very devoted group, but underpaid. In regards to nurse and CNA staff who provide direct care, they are about equal to the private sector including benefits. Their housekeeping staff is paid in excess of those individuals in the private sector. They are much more expensive. Often times people look at this group and then assume that the pay scales go up from here which isn't true. TAPE 97-19, SIDE B Number 028 ANN ZENSON, Resident, Sitka Pioneer Home and; President, Resident Council, testified via teleconference from Sitka on HB 241. She spoke only for herself. The area of administrative law has grown enormously as government has grown. At this time, administrative law performs all of the functions as state government, including legislative, executive, and judicial. The state officials who make new regulations also establish the rules for carrying out these regulations through the court to whom appeals may be made and as a body enforce rules with penalties. Since many of these rules and regulations are written in technical and legal language the common person is helpless in many cases unless there is enough money available to hire a lawyer. Residents of the Pioneer Homes have watched helplessly these past few years as the mission of their home has changed, as well as the security they had hoped for in their old age has been eroded. They understand that during a fiscal crisis, which Alaska now faces, there will be changes. Within administrative law there are a few people who guide these changes. This legislation helps to guarantee their dignity and ease the stress under which they now live. Number 100 ALTHEA BUCKINGHAM, Resident, Sitka Pioneer Home, testified via teleconference from Sitka on HB 241. She noted that she couldn't see many difference between the legislation which the administration provided and that version sponsored by Representative Croft. She also shares information regarding directives given to the Pioneer Home Advisory Board by the Administration to increase the rates. She also heard testimony that this increase was motivated by the Advisory Board. She didn't think the latter was correct. MS. BUCKINGHAM added that she became a resident of the Pioneer Home out of necessity. She noted that the state would rather show a large profit reflected in permanent fund accounts and mental health trust fund accounts to help defray a service that the state said they wanted to provide their pioneers. Of the $2 million mental health trust funds spent in the state, most seems allocated to regional and local facilities other than the pioneer homes. These facilities provide respite, day care, education and collaboration with agencies already providing similar services for non-seniors which goes to the Pioneer Homes, yet they are being designated as the primary service facility for such things as Alzheimers Disease and Related Dementia (ADRD). Seventy to eighty percent of all residents in the Pioneer Homes would qualify. She said if this was true, why weren't they going after these types of funds vigorously rather than on the backs of the Pioneer Home residents. MS. BUCKINGHAM also suggested that with the permanent fund money that everyone receives she thought that if a certain portion from every person who receives this money was put aside for health benefits they could probably fund a great many things for all of their citizens in the state in regards to health, as well as the Pioneer Homes. Number 249 MARK NIELSON, Resident, Sitka Pioneer Home, testified via teleconference on HB 241. He said consideration of the permanent fund as income for Pioneer Home residents was "digging into our pocket money; I wish you folks would leave that alone." Number 293 MARRY SINGER, citizen, testified via teleconference from Ketchikan on HB 241. She wished to testify on the new rules and regulations regarding a home resident with a spouse or a dependent in the community would be allowed $2,000 to live on. She noted that this would be an ideal arrangement since her income comes just above half of this amount. She lost her husband since the last hearing so this situation no longer applies. This definitely applies to others though. She noted that she has a home that needs to be maintained and it requires utility payments. She stated that the $2,000 which they planned to allow those spouses left in the community was a good idea and a great benefit. Number 432 REPRESENTATIVE RYAN stated that he was concerned about an elderly person, the surviving spouse losing their home. The provision in this legislation seems to allow them to live in their community residence for the time that a spouse resides in a Pioneer Home and then the residence can be used to satisfy a debt. He said he was not comfortable with this and wondered if there was any way they could ensure that these homes would stay with the other spouse rather than leaving them destitute without a place to live. REPRESENTATIVE CROFT responded that they cannot use to satisfy the debt real property, the primary residence of the resident spouse or the dependent of the resident. He wasn't sure if this meant that they can't capture real property until the community spouse leaves a house or is deceased or whether they can't get it at all. He said he would check on this. Number 480 REPRESENTATIVE OGAN moved and asked unanimous consent to move HB 241 out of committee with individual recommendations and accompanying zero fiscal note. Hearing no objection, HB 241 was moved out of the House Community and Regional Affairs Committee. HB 162 - BAN CRAFT BUYING ON LIQUOR PREMISES Number 521 KATTARYNA BENNETT, Researcher for Representative Irene Nicholia, came forward to testify on HB 162,"An Act relating to the sale or purchase of authentic Native handicrafts on certain licensed premises; and providing for an effective date." This bill would make it illegal to buy or sell authentic native handicrafts on premises which hold beverage dispensary licenses, in other words, bars. Bars are often used by native artists to sell their art to local patrons, community members, tourists, and sometimes the bar owner and their employees. This has been a problem particularly in rural Alaska and in northern communities where carvers or other native artisans under the influence of alcohol may be induced to sell their handicrafts at unreasonably low prices. MS. BENNETT continued that when people are drinking, their ability to make good decisions on their own behalf is seriously impaired. As a result, people are often persuaded to sell their wares for far less than fair market value. There are some who will deliberately take advantage of an intoxicated artist to obtain a valuable piece of native art work at an unjustly low cost. Addiction to drugs, including alcohol, does make people unprotected victims of their own irresponsible acts. Although these addictions are not fully understood by those of us who are not plagued by such diseases, it is important to understand that this type of activity puts enough money in the intoxicated person's pockets to allow them to continue abusing alcohol. In addition to supporting a person's continued alcohol abuse this activity is degrading to the cultural, traditional and aesthetic value of the art and the artist. MS. BENNETT summed up that they can't stop people from abusing alcohol, but they can however give these individuals the necessary tools to help them help themselves. This legislation will do that and more. The Institute of Native Arts, the Alaska State Council on the Arts and the Citizen's Advisory Board on Alcoholism and Drug Abuse support this bill. She urged the committee members to do the same. Number 649 REPRESENTATIVE DYSON asked that if this bill passes, how would an owner of a dispensary license purchase native origin art to decorate their establishment. MS. BENNETT responded that an individual such as this could purchase Native art work outside the realm of their establishment, off premises. Number 675 REPRESENTATIVE DYSON asked how this situation would be policed? MS. BENNETT noted that enforcement of a lot of existing laws is very difficult. For example, in downtown Anchorage, there are community patrols by bicycle police officers. In rural villages, there are the Village Public Safety Officers who could easily police this situation. Number 700 REPRESENTATIVE DYSON asked if this legislation provided a course of action for someone who has sold their Native handicrafts to a bar owner under prohibitive circumstances would they have recourse and can they go back afterwards and say, "you ripped me off and under the provisions of this bill I've got a course of action to haul you before a magistrate both for criminal action and to recover damages because you got me when I was snookered." MS. BENNETT responded that this bill does not address this, but in her own opinion this would probably not be covered because if the artisan were to make a complaint against a person who bought or sold a piece of art work, they could also be implicated. This legislation addresses both buyer and seller. Number 763 REPRESENTATIVE KOOKESH agreed that this legislation would be a hard law to enforce; however, he wanted to state that it's not so much the buying or the agreement to buy that's going to solve the problem here, it's the reselling of those items by the person who holds the dispensary license. It will be hard for a person from a bar to try to sell those goods. He believed this is where the enforcement will come in. This legislation would help eliminate those individuals doing so and this will be beneficial for all of Alaskans. It's not a catch-all and it will probably not answer all of the questions out there but it's a step in the right direction. He thought they should take this step. REPRESENTATIVE OGAN asked if a person could lose their license or have a sanction against it if they try to sell handiwork. He asked about a situation where someone else comes into a bar and the owner has no knowledge about a transaction between buyer and seller. Number 831 MS. BENNETT responded that under this legislation, it is only if an owner is directly involved in a transaction will they be held accountable. REPRESENTATIVE OGAN stated for the record that he's traveled extensively in the bush and he felt that this is a common practice for individuals to sell their art work in bars. He had concerns about policing these types of situations under these circumstances. Number 913 REPRESENTATIVE RYAN stated that he doesn't oppose this bill but what they're basically addressing is personal responsibility. "Many a country boy has come to town and got skinned." If passing this law is going to help this situation and people feel it will help, he doesn't object. On the other hand, they constantly preach that people have to be responsible for their actions. In this situation the responsibility shifts. REPRESENTATIVE SANDERS asked whether this legislation was aimed primarily at liquor establishment owners who take advantage of this situation or at a bar patron. Number 994 MR. BENNETT responded that it would be fair to say that this legislation isn't targeted at either party one way or another. This legislation is merely to prevent the buying or selling of Native handicrafts in liquor serving establishments. The bill wasn't introduced as a result of one particular bar owner, for example, who was taking advantage of an artisan or a particular patron. This has just been an on-going problem in Alaska. REPRESENTATIVE SANDERS stated that he would support this legislation, but questioned the bar owner's ability to stop things like this from happening. This legislation puts a bar owner in jeopardy over something he has little control over. One other question he had was if this is good for the individual and the private sector, he asked why does this legislation exempt the state. Why are they allowed to do something that's detrimental to the Native community when the private sector can't. Number 1071 MS. BENNETT clarified that Representative Sanders referred to Section 1, subparagraph (e). She stated that she was not exactly certain why this section was included in the bill. REPRESENTATIVE RYAN explained that there is a presumption in English Common Law that the King can do no wrong. Since we don't have a King, government takes his place, the government can do no wrong. So necessarily, the government is exempt from responsibility. This may not be fair, but until such time as we individually address it, this presumption will stay there. Number 1120 REPRESENTATIVE SANDERS suggested then that the committee should strike this subparagraph (e) as an amendment. On page two, line 10, he suggested they strike this subsection. REPRESENTATIVE OGAN pointed out that this amendment might affect Fur Rondy festivities and the convention center functions, for example. He asked, what if beer was being sold at these places. He also noted the fact that there were lots of Native handicrafts sold at these types of events. He noted that this legislation is intended to prevent the sale of handicrafts for cheap by someone who needs the money for alcohol but not necessarily at these types of organized shows. Number 1210 REPRESENTATIVE RYAN offered that government has the same responsibility to act in the same manner as it demands from its citizens. Exempting government all of the time and allowing them and their employees to do whatever they choose because their exempt from the law doesn't breed responsibility. REPRESENTATIVE SANDERS added that people who are authorized to sell in these situations were required to obtain a permit. He didn't think this legislation was aimed at these types of individuals. Number 1309 CHAIRMAN IVAN stated that more work needed to be done on this legislation to address all of the concerns raised. He also mentioned the artisans in his district who used every opportunity and locales to sell their handicrafts. He used the example of posting signs about the hazards of drinking alcohol when a woman is pregnant. He wondered if they should post the same types of signs for the prohibition of the sale of artifacts on particular premises. REPRESENTATIVE DYSON stated that these efforts which are well intended will have unintentional, unfortunate results. He read a note from an Anchorage individual who is a member of the downtown Community Council. "As a member of the downtown Community Council that's been dealing with liquor license renewals I am concerned that this bill will give police another reason to be able to hassle Native bar patrons. We already have quite a problem with unequal and discriminatory ways (of how bars are overseen downtown) and don't need more reasons for police and other authorities to enter bars that serve mostly Native people and hassle and shake down those people in there." He thought that this was a legitimate concern. He noted that they didn't want anyone taken advantage of, but he also didn't want police either taking a lot of time to go around and see if anyone's got ivory in their pockets to sell. He also didn't want overzealous and sometimes "bad attitude" policeman using this law as another excuse to hassle people they consider undesirable. Number 1565 REPRESENTATIVE SANDERS withdrew his amendment as proposed until further notice. Number 1588 DOUG GRIFFIN, Alcoholic Beverage Control (ABC) Board, testified via teleconference from Anchorage on HB 162. The board is generally supportive of this bill. Some of the issues raised regarding enforcement and whether this legislation would actually work are legitimate but he thought the concept was definitely one that's unique to Alaska. It's a reality as contributing to alcohol abuse and the taking advantage of people who are in a diminished capacity. He suggested that maybe the sponsor or the committee look at also including liquor stores under this provision. He stated that a more classic example of buying, trading and selling of handicrafts does take place in bars, but he was concerned that if this activity stopped taking place in bars they may see more people directed towards liquor stores instead. He noted the section where this language might be inserted, along with reference to other related statutes. He noted the fiscal note which, from the ABC Board's perspective, would be the cost of printing of signs noticing patrons about this policy. He also noted the Department of Law was looking for a pass through from the board dealing with administrative actions and explained the remainder of the related costs. Number 1821 DON DAPCEVICH, Executive Director, Citizen's Advisory Board on Alcoholism and Drug Abuse, came forward to testify on HB 162. The Citizen's Board is made up Alaskans from all over the state of Alaska. They've considered this bill and that it's a good piece of legislation. They have some concerns with targeting Natives. If the bill is good on its face, then it should be good for arts and handicrafts made by non-Natives as well for the same reasons. Whether someone is Native or not and selling their art and handicrafts at a disadvantage bears no race. The issue of diminished capacity from alcohol bears no racial designation. MR. DAPCEVICH continued that in regard to enforcement, having signs located in establishments is preventative. This is why they want emphasis on prevention. In regards to enforcement one would assume that only the most egregious cases will be pursued. These should be, especially those who abuse these situations through purchases in order to re-sell. This is a real concern in rural Alaska where individuals make it a practice in effect to trade alcohol for handicrafts and art. This is no less blatant than years ago when gold was traded for whiskey. There are families who rely on the proceeds of these sales. When a person is in the situation of bartering at a diminished capacity, it does the individual or their families no good. CHAIRMAN IVAN stated that more work needed to be done on this legislation before any action could be taken. He assigned a subcommittee to address this work with Representative Sanders as chairman, along with Representatives Kookesh and Dyson. ADJOURNMENT Number 2056 CHAIRMAN IVAN adjourned the House Community and Regional Affairs Committee at 9:34 a.m.