HOUSE FINANCE COMMITTEE JANUARY 30, 1996 10:40 A.M. TAPE HFC 96 - 21, Side 1, #000 - end. TAPE HFC 96 - 21, Side 2, #000 - end. TAPE HFC 96 - 22, Side 1, #000 - end. CALL TO ORDER Co-Chair Mark Hanley called the House Finance Committee meeting to order at 10:40 A.M. PRESENT Co-Chair Hanley Representative Martin Co-Chair Foster Representative Mulder Representative Brown Representative Navarre Representative Grussendorf Representative Kohring Representative Kelly Representative Therriault Representative Parnell was not present for the meeting. ALSO PRESENT Mark Tumeo, (Testified via teleconference), Antarctica; Kate Wattum, (Testified via teleconference), Fairbanks; Daniel Collison, Board Member, Southeast Alaska Gay and Lesbian Alliance, Juneau; Stephen Jacquier, (Testified via teleconference), Self, Anchorage; Lynn Stimler, (Testified via teleconference), Executive Director,American Civil Liberties Union (ACLU), Anchorage; Tom Owens, (Testified via teleconference), Attorney, Representing University of Alaska, Anchorage; Mildred Boesser, Juneau City and Borough Human Rights Commission, Juneau; Susan Hargis, Chair, Southeast Alaska Gay and Lesbian Alliance (SEAGLA), Juneau; Marsha Buck, Parents, Families and Friends of Lesbians and Gays (PFLAG), Juneau; Sara Boesser, Board Member, the Committee for Equality, Juneau; Pam LaBolle, President, Alaska State Chamber of Commerce -Juneau. SUMMARY HB 226 An Act permitting the provision of different retirement and health benefits to employees based on marital status. CS HB 226 (FIN) was reported out of Committee with a "do pass" recommendation and with a fiscal note by the Department of Administration. HB226 1 HOUSE BILL 226 "An Act permitting the provision of different retirement and health benefits to employees based on marital status." MARK TUMEO, ANTARCTICA, (TESTIFIED VIA TELECONFERENCE), testified on HB 226 and the proposed amendment by Representative Kelly. He stated that providing health benefits to the domestic partner of an employee would not represent a threat to the State's economy, the social fabric, marriage or society. He noted that the University of Alaska has already instituted domestic partner benefits without major administrative or economic impact. There has been less that a .5% increase to benefit costs. Mr. Tumeo agreed that the bill was "highly" controversial. It is a bill that deals with the definition of relationship; a bill which touches the core of every Alaskan's concept of fair play and morality. He added, the arguments presented to support the bill were emotional and that those persons opposing the bill are at a distinct disadvantage. Mr. Tumeo questioned if "emotional moralism" was a politically successful basis for legislation. He felt that the proposed legislation would attempt to legislate in favor of one group of people--married people--over another group--non-married people. Mr. Tumeo thought that passage of the legislation would be another example of the government intruding in personal affairs. He urged Committee members to "kill" the bill as he felt that it would gut the Human Rights Act in an attempt to enforce one type of family structure over another. [Copy of testimony on file]. Representative Brown asked the current status of the court suit. Mr. Tumeo explained that it was pending before the Supreme Court and that a decision would be issued in Spring, 1996. Representative Martin voiced strong support of the traditional family rights, stating that the core issue was being degraded. Mr. Tumeo explained that information resulting from the 1990 census indicates that less than 40% of the children in our country are raised in a two parent home where one parent stays home. He emphasized the fact that there are many different family structures. Mr. Tumeo responded to a question regarding the court brief. He stated it was not the legal argument which was supported or presented by the Supreme Court. He acknowledged that there should be a "tight" fence around who could qualify for 2 the benefits. Representative Therriault stated that information needed clarification by the Human Rights Act. Mr. Tumeo added, following the Court's decision, the law will be eliminated or expanded reflecting the interpretation of that decision. He added, it would be premature to act before the Supreme Court decision, entering into a possibility of amending a critical law. Representative Therriault voiced his concern that no limit existed, pointing out when the Human Rights Act was enacted, it was not anticipated the need that this circumstance would exist. Representative Kelly spoke to the amendment adopted by the House HESS Committee as proposed by Mr. Tumeo. He questioned isolating the concept of "domestic partnerships", suggesting that the criteria proposed would allow anyone to buy into or out of the program. Mr. Tumeo explained various approaches to domestic partnerships which can be legally binding. He added, as with any benefit or condition upon which a benefit is given, the conditions can change. Once the status changes, the individual would be responsible to report that. He continued, there are plenty of stipulations to address the fraud concerns, and that the University does have a qualification waiting period. Mr. Tumeo acknowledged Representative Kelly's concern agreeing that some relationships are not long lasting and pointing out that was true of marriage's also. Representative Kelly disagreed. He stated that a person could get into and out of domestic partnerships more quickly; a domestic partnership ends when the partners stop living together. Representative Kelly added that the non- traditional relationship will leave behind broken marriages, broken neighborhoods and broken families. Mr. Tumeo countered that a domestic partnership does not threaten a marriage. Non-traditional relationships can be entered into and exited just as a marriage can. Mr. Tumeo concluded that relationships of either type should not be of legislative interest. Representative Kelly elaborated that the changes made to the legislation in the two previous committee's could threaten partners within a domestic partnership. Representative Kelly explained the origin of the legislation, noting that a recent court decision ordered the University of Alaska to extend health insurance coverage and benefits to domestic partners. HB 226 would address the decision by reasserting the rights of employers, including the State, to exclude domestic partners from health insurance benefits, unless they choose otherwise. He added, it was his intent that HB 3 226 reduce the uncertainty employers now face in planning group insurance programs. Representative Kelly added, the court decision leaves unclear who is, and who is not, entitled to family benefits. HB 226 would seek to close the door on a possible onslaught of domestic partnerships created just to gain benefits. Representative Kelly urged the Committee's support of the original legislation or the House Finance Committee version. KATE WATTUM, (TESTIFIED VIA TELECONFERENCE), FAIRBANKS, spoke against HB 226 which she felt would specifically write "discrimination" into law. She emphasized that the proposed legislation is about "emotion" and "people", and that people will be hurt with its passage. She thought that the extended benefits program should be issued to all family members who qualify. Representative Martin asked if Ms. Wattum's partner currently had a health package. Ms. Wattum explained that her partner does currently have coverage and that it is supplemented with her own policy through the University. Representative Martin expounded his theories on the legality of marriage and the rights which come with that choice. Representative Martin added that the State should not be required to pay for equal rights in domestic partnerships. Ms. Wattum remarked that all she was requesting was equal access to a benefit which every other married employee of the University has access to for their spouses and children. Representative Kelly pointed out that if the court decision was held and that domestic partnerships were created, Ms. Wattum would be paid more than the single person who is employed at the same work place. He emphasized that the act would create a new class of people. Discussion followed between Ms. Wattum and Representative Kelly regarding this "new" class of people. DANIEL COLLISON, BOARD MEMBERS, SOUTHEAST ALASKA GAY AND LESBIAN ALLIANCE (SEAGLA), JUNEAU, distributed a letter to Committee members from Bob Miller, Director, Office of Public Affairs, University of Alaska. [Attachment #1]. Mr. Collison spoke against HB 226 and/or in support of the HESS version of the legislation. He pointed out that the University has received less than 1% increase in plan enrollments. Mr. Collison referenced the letter [Attachment #1], clarifying that to date only 44 employees have registered their partners in the domestic health plan. One third of these individuals are in same sex 4 relationships; additionally, nine children were registered. He observed that the recognition of domestic partnerships would not place an undue burden on the State. Mr. Collison urged the passage of HB 226 with the HESS amendment. Representative Martin reiterated his concerns recognizing non-traditional families and relationships. Mr. Collison reminded Representative Martin that the question before the Committee was access to the benefits on economic grounds. He stressed the issue is the court has indicated that it is wrong to discriminate against domestic partnerships. (Tape Change, HFC 96-21, Side 2). Mr. Collison reiterated that the Supreme Court is due to rule on that issue this spring. Representative Therriault felt that the court decision does not address the main concern of discrimination. Mr. Collison interjected that the court decision was being decided on access to benefits. A marriage relationship carries with it inter-financial legal obligations. He pointed out that he could have a relationship with a man and have those same responsibilities. The court is trying to clarify that there can exist two different types of contractual relationships; one entered into by marriage and another one entered into privately by two individuals, recognized as a domestic partner relationship. The court is not creating different classes of people, but instead interpreting why certain people are being denied benefits. STEPHEN JACQUIER, (TESTIFIED VIA TELECONFERENCE), REPRESENTING SELF, ANCHORAGE, spoke strongly against passage of the proposed legislation. Representative Grussendorf advised that the law in Alaska currently is based on the decision of Judge Green, who indicated the action attempted by the University of Alaska was discriminatory in nature. He reminded Committee members that the case was currently before the Supreme Court on appeal with a decision soon to be made. Representative Grussendorf summarized that the HESS version of the legislation does support the opinion of Judge Green. LYNN STIMLER, (TESTIFIED VIA TELECONFERENCE), EXECUTIVE DIRECTOR, AMERICAN CIVIL LIBERTIES UNION (ACLU), ANCHORAGE, explained that the issue of HB 226 should not exist while it is pending before the Supreme Court. She pointed out that the ACLU is opposed to the original HB 226. She noted that it is outside the spirit and plain language of the Alaska Constitution and the Alaska Human Rights Act. 5 Ms. Stimler addressed the economics, noting that private employers extend these type of benefits because it is good business practice. Employers know and understand that today's work force is comprised of many people living in many different types of situations. The Alaska Constitution is more broadly protective of the individuals civil rights and liberties than the U.S. Constitution is. Ms. Stimler reiterated that the ACLU believes the State is "out of place" debating these concerns while the issue is before the Supreme Court. To adopt language amending law to specifically allow discrimination because of marital status is against the spirit and plain language of the Alaska Human Rights Act. She urged the Legislature not to be involved in such a discriminating policy. TOM OWENS, (TESTIFIED VIA TELECONFERENCE), ATTORNEY, REPRESENTING THE UNIVERSITY OF ALASKA - ANCHORAGE, commented that the provisions of A.S. 18:80 only applies to public employers. The State anti- discrimination laws have been made inapplicable to qualify for benefits or plans in the private sector. He added, it is important to note that Judge Green's decision was not based on any constitutional analysis. Mr. Owens added, the purpose of the proposed amendment, A.S. 18:80, was to confirm the statutory scheme which has existed in the State of Alaska for many years. This scheme allows public employers to discriminate in the provision of benefits on the basis of marital status or parental status. He continued, the purpose of the proposed legislation would confirm that the Legislature never intended to have the provisions of A.S. 18:80 prohibit the provision of health care benefits on the bases of marital or parental status. Representative Grussendorf asked if the bill would affect the private sector. Mr. Owens replied that Judge Green did not get to the constitutional issues because she didn't need to. She based her decision upon reading the language of A.S. 18:80, adding that the courts make their decision on the lowest level of consideration. The applicability of A.S. 18:80 to the private sector would be based on the federal court ruling in 1974. The State antidiscrimination laws do not apply to the provisions of benefits under a qualified plan in the private sector. Representative Martin pointed out the amenities available to University teachers, health care, tuition and benefit waivers. He reminded Committee members that the Legislature continues to be responsible for the University budget. Representative Therriault questioned how Judge Green got 6 beyond statute areas which mandate the differentiation. Mr. Owens responded that Judge Green made her decision through a written opinion. His comments on her decision are based upon a reading of that decision. Judge Green did not make any comments regarding the other statutory provisions that either mandate or permit discrimination based on marital status. After Judge Green made her decision, the University made a motion to reconsider, pointing out to Judge Green the existence of the other statutes which level the Legislative intent to file or require discrimination provision of benefits based on marital status. Judge Green refused to consider those arguments and thus continued with her original decision. MILDRED BOESSER, JUNEAU CITY & BOROUGH HUMAN RIGHTS COMMISSION, JUNEAU, provided Committee members with a Human Rights Commission, City and Borough of Juneau (CBJ) Position Paper on HB 226. [Attachment #2]. She noted that the CBJ Committee opposes HB 226 because it discriminates against committed partners to the detriment of Alaska and in violation of the Constitution. Mrs. Boesser understood that the legislation resulted from a fear to undermine the traditional family unit, whereas in reality, the concept of "domestic partners" is an attempt to enlarge the concept of family to include non-traditional groupings which exist everywhere already. She recommended that this group is in need of the family support and the benefits that traditional families enjoy. Mrs. Boesser acknowledged that we all live in a changing society and that many different types of families have emerged. She encouraged supporting people that are in loving, stable relationships, even when that picture does not include our own view of family. Co-Chair Hanley asked if CBJ allows domestic partners to share in benefits. Mrs. Boesser replied they do not at this time. Representative Kelly pointed out that the Alaska Human Rights Commission did not support Judge Greens decision. SUSAN HARGIS, CHAIR, SOUTHEAST ALASKA GAY AND LESBIAN ALLIANCE (SEAGLA), JUNEAU, testified against HB 226. She pointed out that the legislation was initiated on the premise of "financial burden" as initially stated by Representative Kelly in the House HESS Committee. She reminded Committee members of evidence that the financial cost would be less than .5%. Ms. Hargis added that it is important that more children be covered and have access to health care. 7 In response to Representative Kelly's comment, Ms. Hargis agreed that fraud does exist within any system, although, stated that all employees deserve the same rights. Ms. Hargis urged Committee members to either "kill" the bill or pass the version adopted by the House HESS Committee. Representative Therriault warned that the end result of this argument could be that only employees are covered by the insurance benefits. Ms. Hargis agreed that this could happen. Representative Kelly noted that the issue is not how many same sex people versus how many opposite sex people sign up. To date 45 people have signed up. Aetna Insurance Company has stated the cost. Representative Kelly noted that cost would be equivalent to the cost of a university professor for a one year salary. Aetna does assume a percentage increase each year. Representative Kelly emphasized that these costs will grow, and that they are a moving target. Ms. Hargis replied that Aetna has also clarified that the amount does increase, although, the increase for any organization participating has not exceeded the 3% cap in the past several years. (Tape Change, HFC 96-22, Side 1). Ms. Hargis concluded that the State would be better served by providing more people access to health care. MARSHA BUCK, PARENTS, FAMILIES AND FRIENDS OF LESBIANS AND GAYS (PFLAG), JUNEAU, provided Committee members with a copy of a letter from Dixie Hood, Co-Chair, PFLAG, indicating the position of that group. [Copy on file]. The letter requested that the bill die in Committee, suggesting that the matter be addressed by the employer and the employee. Ms. Buck noted that she agreed with the testimony of Ms. Hood and encouraged the bill to die in Committee. She stated that as a parent of a daughter in a domestic relationship, the bill as written was divisive and deals with matters of personal freedom. Representative Therriault commented that the people of Alaska are the employers of the University of Alaska employees, of which he represents a specific group of those shareholders, who think differently than Ms. Buck. SARA BOESSER, BOARD MEMBER, STATEWIDE ORGANIZATION, THE COMMITTEE FOR EQUALITY, JUNEAU, spoke in opposition to HB 226. She advised that the Committee for Equality does support the HESS version of the legislation and that version matches the court action. [Copy of testimony on file]. 8 Ms. Boesser recommended the House Finance Committee send the bill to a subcommittee to research the legal and financial implications of any changes that would cross the court proceedings now in progress. She continued, in the extent that Representative Kelly opposes equal benefits for domestic partnerships on religious beliefs he may hold, the Committee should remember that while the U.S. Constitution does protect people from discrimination on the basis of religion, that protection also includes freedom from religion. In conclusion, Ms. Boesser, summarized that CS 226 (JUD) as passed was a good bill, but unnecessary, due to the pending court action at this time. Representative Kelly addressed the legislative ethics concern, pointing out that the bill does not ban domestic partnerships. The proposed legislation only states that if you choose as an employer or employee not to recognize domestic partnerships to give benefits, you can choose to do so. He added that these concerns are defined in the Alaska Statutes and are determined on that level; not the Supreme Court. Ms. Boesser disagreed, stating that the bill was specifically written in order to discriminate against people in domestic relationships. PAM LABOLLE, PRESIDENT, ALASKA STATE CHAMBER OF COMMERCE, JUNEAU, advised that the Alaska State Chamber of Commerce represents nearly 700 employers statewide which employees 7,000 employees. The Alaska State Chamber of Commerce has no position on the traditional or non-traditional aspect of the legislation. She advised that the Chamber's concern is that without the proposed legislation, there would be an expansion of the benefit pool which would increase State spending. Ms. LaBolle commented that the number one priority of the State Chamber was a reduction of State spending. Ms. LaBolle continued, private employers are in competition with the State. The State pays a much better benefit package than a private employer can afford and thus, private industry loses good employees to the State work force. She suggested that to level the playing field would give coverage for the actual employee and the additional coverage would be paid for individually for each dependent. Representative Navarre argued that the benefits which already exist cause the competition with private employers, not those being discussed for the non-traditional households. He stated that the competition would be minimally impacted by the application of the bill. Ms. 9 LaBolle emphasized that all the facts are not currently available. She thought anything that was done to enhance the State's benefits would place the State in greater competition with the private sector. Representative Navarre responded that the intent was to extend benefits to people already employed and would not be used as a recruitment tool by the State. Representative Mulder MOVED that CS HB 226 (FIN) be the version before the Committee. Representative Brown OBJECTED. Representative Navarre asked for further clarification of "domestic partnership". Co-Chair Hanley noted that CS HB 226 (FIN) would return the law to the place it was before Judge Greens decision. Statutorily, the decision would close the questions which Judge Green had, clarifying that discrimination is allowed in that particular instance. He added that the strict definition of marriage would be the dividing line. Representative Navarre speculated that there would be a fiscal impact to the Department of Law. He thought that the legislation would be challenged on a constitutional basis. Representative Grussendorf summarized that the two previous Committees agreed to the same changes, whereas, the House Finance Committee is proposing to adopt the original bill, at the same time in which it will be before the Supreme Court. Representative Brown reiterated her original objection, noting that the Committee should be considering the standard, including the constitutional obligations. The Constitution clearly states that all people are equal and have equal rights. The Legislation specifies groups of persons equally qualified, who are being discriminated against. She continued, CS HB 226 (FIN) would mandate legislative discrimination which she strongly opposes. Representative Kohring voiced his support of the committee substitute. He spoke to the philosophical differences between Committee members and addressed the economical cost to the State. Representative Brown asked what the term "legal dependent" meant. Representative Kelly spoke to Amendment #1 which would change that language to "children". A roll call was taken on the MOTION to adopt CS HB 226 (FIN) as the version before the Committee. IN FAVOR: Martin, Mulder, Therriault, Kelly, 10 Kohring, Hanley, Foster. OPPOSED: Navarre, Brown, Grussendorf. Representative Parnell was not present for the vote. The MOTION PASSED (7-3). Representative Kelly MOVED Amendment #1. [Attachment #3]. Representative Brown asked if a couple in a domestic partnership were non-marital status and one of the partners had children, would those children be covered. Representative Therriault replied that the children of the employed partner would be covered. Representative Brown asked who would be excluded by the amendment. Representative Kelly noted that no one would be excluded. He stated that the term "legal dependents" was too broad. There being NO OBJECTION, Amendment #1 was adopted. Representative Mulder MOVED to report CS HB 226 (FIN) out of Committee with individual recommendations and with the accompanying fiscal note. Representative Brown OBJECTED. A roll call was taken on the MOTION to move the bill from Committee. IN FAVOR: Mulder, Therriault, Kelly, Kohring, Martin, Foster, Hanley. OPPOSED: Navarre, Brown, Grussendorf. Representative Parnell was not present for the vote. The MOTION PASSED (7-3). CS HB 226 (FIN) was reported out of Committee with a "do pass' recommendation and with a fiscal note by the Department of Administration. ADJOURNMENT The meeting adjourned at 12:50 P.M. HOUSE FINANCE COMMITTEE JANUARY 30, 1996 10:40 A.M. TAPE HFC 96 - 21, Side 1, #000 - end. TAPE HFC 96 - 21, Side 2, #000 - end. TAPE HFC 96 - 22, Side 1, #000 - end. 11 CALL TO ORDER Co-Chair Mark Hanley called the House Finance Committee meeting to order at 10:40 A.M. PRESENT Co-Chair Hanley Representative Martin Co-Chair Foster Representative Mulder Representative Brown Representative Navarre Representative Grussendorf Representative Kohring Representative Kelly Representative Therriault Representative Parnell was not present for the meeting. ALSO PRESENT Mark Tumeo, (Testified via teleconference), Antarctica; Kate Wattum, (Testified via teleconference), Fairbanks; Daniel Collison, Board Member, Southeast Alaska Gay and Lesbian Alliance, Juneau; Stephen Jacquier, (Testified via teleconference), Self, Anchorage; Lynn Stimler, (Testified via teleconference), Executive Director,American Civil Liberties Union (ACLU), Anchorage; Tom Owens, (Testified via teleconference), Attorney, Representing University of Alaska, Anchorage; Mildred Boesser, Juneau City and Borough Human Rights Commission, Juneau; Susan Hargis, Chair, Southeast Alaska Gay and Lesbian Alliance (SEAGLA), Juneau; Marsha Buck, Parents, Families and Friends of Lesbians and Gays (PFLAG), Juneau; Sara Boesser, Board Member, the Committee for Equality, Juneau; Pam LaBolle, President, Alaska State Chamber of Commerce -Juneau. SUMMARY HB 226 An Act permitting the provision of different retirement and health benefits to employees based on marital status. CS HB 226 (FIN) was reported out of Committee with a "do pass" recommendation and with a fiscal note by the Department of Administration. HOUSE BILL 226 "An Act permitting the provision of different retirement and health benefits to employees based on marital status." MARK TUMEO, ANTARCTICA, (TESTIFIED VIA TELECONFERENCE), testified on HB 226 and the proposed amendment by Representative Kelly. He stated that providing health 12 benefits to the domestic partner of an employee would not represent a threat to the State's economy, the social fabric, marriage or society. He noted that the University of Alaska has already instituted domestic partner benefits without major administrative or economic impact. There has been less that a .5% increase to benefit costs. Mr. Tumeo agreed that the bill was "highly" controversial. It is a bill that deals with the definition of relationship; a bill which touches the core of every Alaskan's concept of fair play and morality. He added, the arguments presented to support the bill were emotional and that those persons opposing the bill are at a distinct disadvantage. Mr. Tumeo questioned if "emotional moralism" was a politically successful basis for legislation. He felt that the proposed legislation would attempt to legislate in favor of one group of people--married people--over another group--non-married people. Mr. Tumeo thought that passage of the legislation would be another example of the government intruding in personal affairs. He urged Committee members to "kill" the bill as he felt that it would gut the Human Rights Act in an attempt to enforce one type of family structure over another. [Copy of testimony on file]. Representative Brown asked the current status of the court suit. Mr. Tumeo explained that it was pending before the Supreme Court and that a decision would be issued in Spring, 1996. Representative Martin voiced strong support of the traditional family rights, stating that the core issue was being degraded. Mr. Tumeo explained that information resulting from the 1990 census indicates that less than 40% of the children in our country are raised in a two parent home where one parent stays home. He emphasized the fact that there are many different family structures. Mr. Tumeo responded to a question regarding the court brief. He stated it was not the legal argument which was supported or presented by the Supreme Court. He acknowledged that there should be a "tight" fence around who could qualify for the benefits. Representative Therriault stated that information needed clarification by the Human Rights Act. Mr. Tumeo added, following the Court's decision, the law will be eliminated or expanded reflecting the interpretation of that decision. He added, it would be premature to act before the Supreme Court decision, entering into a possibility of amending a critical law. 13 Representative Therriault voiced his concern that no limit existed, pointing out when the Human Rights Act was enacted, it was not anticipated the need that this circumstance would exist. Representative Kelly spoke to the amendment adopted by the House HESS Committee as proposed by Mr. Tumeo. He questioned isolating the concept of "domestic partnerships", suggesting that the criteria proposed would allow anyone to buy into or out of the program. Mr. Tumeo explained various approaches to domestic partnerships which can be legally binding. He added, as with any benefit or condition upon which a benefit is given, the conditions can change. Once the status changes, the individual would be responsible to report that. He continued, there are plenty of stipulations to address the fraud concerns, and that the University does have a qualification waiting period. Mr. Tumeo acknowledged Representative Kelly's concern agreeing that some relationships are not long lasting and pointing out that was true of marriage's also. Representative Kelly disagreed. He stated that a person could get into and out of domestic partnerships more quickly; a domestic partnership ends when the partners stop living together. Representative Kelly added that the non- traditional relationship will leave behind broken marriages, broken neighborhoods and broken families. Mr. Tumeo countered that a domestic partnership does not threaten a marriage. Non-traditional relationships can be entered into and exited just as a marriage can. Mr. Tumeo concluded that relationships of either type should not be of legislative interest. Representative Kelly elaborated that the changes made to the legislation in the two previous committee's could threaten partners within a domestic partnership. Representative Kelly explained the origin of the legislation, noting that a recent court decision ordered the University of Alaska to extend health insurance coverage and benefits to domestic partners. HB 226 would address the decision by reasserting the rights of employers, including the State, to exclude domestic partners from health insurance benefits, unless they choose otherwise. He added, it was his intent that HB 226 reduce the uncertainty employers now face in planning group insurance programs. Representative Kelly added, the court decision leaves unclear who is, and who is not, entitled to family benefits. HB 226 would seek to close the door on a possible onslaught of domestic partnerships created just to gain benefits. Representative Kelly urged the Committee's support of the original legislation or the House Finance Committee version. 14 KATE WATTUM, (TESTIFIED VIA TELECONFERENCE), FAIRBANKS, spoke against HB 226 which she felt would specifically write "discrimination" into law. She emphasized that the proposed legislation is about "emotion" and "people", and that people will be hurt with its passage. She thought that the extended benefits program should be issued to all family members who qualify. Representative Martin asked if Ms. Wattum's partner currently had a health package. Ms. Wattum explained that her partner does currently have coverage and that it is supplemented with her own policy through the University. Representative Martin expounded his theories on the legality of marriage and the rights which come with that choice. Representative Martin added that the State should not be required to pay for equal rights in domestic partnerships. Ms. Wattum remarked that all she was requesting was equal access to a benefit which every other married employee of the University has access to for their spouses and children. Representative Kelly pointed out that if the court decision was held and that domestic partnerships were created, Ms. Wattum would be paid more than the single person who is employed at the same work place. He emphasized that the act would create a new class of people. Discussion followed between Ms. Wattum and Representative Kelly regarding this "new" class of people. DANIEL COLLISON, BOARD MEMBERS, SOUTHEAST ALASKA GAY AND LESBIAN ALLIANCE (SEAGLA), JUNEAU, distributed a letter to Committee members from Bob Miller, Director, Office of Public Affairs, University of Alaska. [Attachment #1]. Mr. Collison spoke against HB 226 and/or in support of the HESS version of the legislation. He pointed out that the University has received less than 1% increase in plan enrollments. Mr. Collison referenced the letter [Attachment #1], clarifying that to date only 44 employees have registered their partners in the domestic health plan. One third of these individuals are in same sex relationships; additionally, nine children were registered. He observed that the recognition of domestic partnerships would not place an undue burden on the State. Mr. Collison urged the passage of HB 226 with the HESS amendment. Representative Martin reiterated his concerns recognizing non-traditional families and relationships. Mr. Collison reminded Representative Martin that the question before the Committee was access to the benefits on economic grounds. 15 He stressed the issue is the court has indicated that it is wrong to discriminate against domestic partnerships. (Tape Change, HFC 96-21, Side 2). Mr. Collison reiterated that the Supreme Court is due to rule on that issue this spring. Representative Therriault felt that the court decision does not address the main concern of discrimination. Mr. Collison interjected that the court decision was being decided on access to benefits. A marriage relationship carries with it inter-financial legal obligations. He pointed out that he could have a relationship with a man and have those same responsibilities. The court is trying to clarify that there can exist two different types of contractual relationships; one entered into by marriage and another one entered into privately by two individuals, recognized as a domestic partner relationship. The court is not creating different classes of people, but instead interpreting why certain people are being denied benefits. STEPHEN JACQUIER, (TESTIFIED VIA TELECONFERENCE), REPRESENTING SELF, ANCHORAGE, spoke strongly against passage of the proposed legislation. Representative Grussendorf advised that the law in Alaska currently is based on the decision of Judge Green, who indicated the action attempted by the University of Alaska was discriminatory in nature. He reminded Committee members that the case was currently before the Supreme Court on appeal with a decision soon to be made. Representative Grussendorf summarized that the HESS version of the legislation does support the opinion of Judge Green. LYNN STIMLER, (TESTIFIED VIA TELECONFERENCE), EXECUTIVE DIRECTOR, AMERICAN CIVIL LIBERTIES UNION (ACLU), ANCHORAGE, explained that the issue of HB 226 should not exist while it is pending before the Supreme Court. She pointed out that the ACLU is opposed to the original HB 226. She noted that it is outside the spirit and plain language of the Alaska Constitution and the Alaska Human Rights Act. Ms. Stimler addressed the economics, noting that private employers extend these type of benefits because it is good business practice. Employers know and understand that today's work force is comprised of many people living in many different types of situations. The Alaska Constitution is more broadly protective of the individuals civil rights and liberties than the U.S. Constitution is. Ms. Stimler reiterated that the ACLU believes the State is 16 "out of place" debating these concerns while the issue is before the Supreme Court. To adopt language amending law to specifically allow discrimination because of marital status is against the spirit and plain language of the Alaska Human Rights Act. She urged the Legislature not to be involved in such a discriminating policy. TOM OWENS, (TESTIFIED VIA TELECONFERENCE), ATTORNEY, REPRESENTING THE UNIVERSITY OF ALASKA - ANCHORAGE, commented that the provisions of A.S. 18:80 only applies to public employers. The State anti- discrimination laws have been made inapplicable to qualify for benefits or plans in the private sector. He added, it is important to note that Judge Green's decision was not based on any constitutional analysis. Mr. Owens added, the purpose of the proposed amendment, A.S. 18:80, was to confirm the statutory scheme which has existed in the State of Alaska for many years. This scheme allows public employers to discriminate in the provision of benefits on the basis of marital status or parental status. He continued, the purpose of the proposed legislation would confirm that the Legislature never intended to have the provisions of A.S. 18:80 prohibit the provision of health care benefits on the bases of marital or parental status. Representative Grussendorf asked if the bill would affect the private sector. Mr. Owens replied that Judge Green did not get to the constitutional issues because she didn't need to. She based her decision upon reading the language of A.S. 18:80, adding that the courts make their decision on the lowest level of consideration. The applicability of A.S. 18:80 to the private sector would be based on the federal court ruling in 1974. The State antidiscrimination laws do not apply to the provisions of benefits under a qualified plan in the private sector. Representative Martin pointed out the amenities available to University teachers, health care, tuition and benefit waivers. He reminded Committee members that the Legislature continues to be responsible for the University budget. Representative Therriault questioned how Judge Green got beyond statute areas which mandate the differentiation. Mr. Owens responded that Judge Green made her decision through a written opinion. His comments on her decision are based upon a reading of that decision. Judge Green did not make any comments regarding the other statutory provisions that either mandate or permit discrimination based on marital status. After Judge Green made her decision, the University made a motion to reconsider, pointing out to Judge Green the existence of the other statutes which level the Legislative 17 intent to file or require discrimination provision of benefits based on marital status. Judge Green refused to consider those arguments and thus continued with her original decision. MILDRED BOESSER, JUNEAU CITY & BOROUGH HUMAN RIGHTS COMMISSION, JUNEAU, provided Committee members with a Human Rights Commission, City and Borough of Juneau (CBJ) Position Paper on HB 226. [Attachment #2]. She noted that the CBJ Committee opposes HB 226 because it discriminates against committed partners to the detriment of Alaska and in violation of the Constitution. Mrs. Boesser understood that the legislation resulted from a fear to undermine the traditional family unit, whereas in reality, the concept of "domestic partners" is an attempt to enlarge the concept of family to include non-traditional groupings which exist everywhere already. She recommended that this group is in need of the family support and the benefits that traditional families enjoy. Mrs. Boesser acknowledged that we all live in a changing society and that many different types of families have emerged. She encouraged supporting people that are in loving, stable relationships, even when that picture does not include our own view of family. Co-Chair Hanley asked if CBJ allows domestic partners to share in benefits. Mrs. Boesser replied they do not at this time. Representative Kelly pointed out that the Alaska Human Rights Commission did not support Judge Greens decision. SUSAN HARGIS, CHAIR, SOUTHEAST ALASKA GAY AND LESBIAN ALLIANCE (SEAGLA), JUNEAU, testified against HB 226. She pointed out that the legislation was initiated on the premise of "financial burden" as initially stated by Representative Kelly in the House HESS Committee. She reminded Committee members of evidence that the financial cost would be less than .5%. Ms. Hargis added that it is important that more children be covered and have access to health care. In response to Representative Kelly's comment, Ms. Hargis agreed that fraud does exist within any system, although, stated that all employees deserve the same rights. Ms. Hargis urged Committee members to either "kill" the bill or pass the version adopted by the House HESS Committee. Representative Therriault warned that the end result of this argument could be that only employees are covered by the 18 insurance benefits. Ms. Hargis agreed that this could happen. Representative Kelly noted that the issue is not how many same sex people versus how many opposite sex people sign up. To date 45 people have signed up. Aetna Insurance Company has stated the cost. Representative Kelly noted that cost would be equivalent to the cost of a university professor for a one year salary. Aetna does assume a percentage increase each year. Representative Kelly emphasized that these costs will grow, and that they are a moving target. Ms. Hargis replied that Aetna has also clarified that the amount does increase, although, the increase for any organization participating has not exceeded the 3% cap in the past several years. (Tape Change, HFC 96-22, Side 1). Ms. Hargis concluded that the State would be better served by providing more people access to health care. MARSHA BUCK, PARENTS, FAMILIES AND FRIENDS OF LESBIANS AND GAYS (PFLAG), JUNEAU, provided Committee members with a copy of a letter from Dixie Hood, Co-Chair, PFLAG, indicating the position of that group. [Copy on file]. The letter requested that the bill die in Committee, suggesting that the matter be addressed by the employer and the employee. Ms. Buck noted that she agreed with the testimony of Ms. Hood and encouraged the bill to die in Committee. She stated that as a parent of a daughter in a domestic relationship, the bill as written was divisive and deals with matters of personal freedom. Representative Therriault commented that the people of Alaska are the employers of the University of Alaska employees, of which he represents a specific group of those shareholders, who think differently than Ms. Buck. SARA BOESSER, BOARD MEMBER, STATEWIDE ORGANIZATION, THE COMMITTEE FOR EQUALITY, JUNEAU, spoke in opposition to HB 226. She advised that the Committee for Equality does support the HESS version of the legislation and that version matches the court action. [Copy of testimony on file]. Ms. Boesser recommended the House Finance Committee send the bill to a subcommittee to research the legal and financial implications of any changes that would cross the court proceedings now in progress. She continued, in the extent that Representative Kelly opposes equal benefits for domestic partnerships on religious beliefs he may hold, the Committee should remember that while the U.S. Constitution does protect people from discrimination on the basis of 19 religion, that protection also includes freedom from religion. In conclusion, Ms. Boesser, summarized that CS 226 (JUD) as passed was a good bill, but unnecessary, due to the pending court action at this time. Representative Kelly addressed the legislative ethics concern, pointing out that the bill does not ban domestic partnerships. The proposed legislation only states that if you choose as an employer or employee not to recognize domestic partnerships to give benefits, you can choose to do so. He added that these concerns are defined in the Alaska Statutes and are determined on that level; not the Supreme Court. Ms. Boesser disagreed, stating that the bill was specifically written in order to discriminate against people in domestic relationships. PAM LABOLLE, PRESIDENT, ALASKA STATE CHAMBER OF COMMERCE, JUNEAU, advised that the Alaska State Chamber of Commerce represents nearly 700 employers statewide which employees 7,000 employees. The Alaska State Chamber of Commerce has no position on the traditional or non-traditional aspect of the legislation. She advised that the Chamber's concern is that without the proposed legislation, there would be an expansion of the benefit pool which would increase State spending. Ms. LaBolle commented that the number one priority of the State Chamber was a reduction of State spending. Ms. LaBolle continued, private employers are in competition with the State. The State pays a much better benefit package than a private employer can afford and thus, private industry loses good employees to the State work force. She suggested that to level the playing field would give coverage for the actual employee and the additional coverage would be paid for individually for each dependent. Representative Navarre argued that the benefits which already exist cause the competition with private employers, not those being discussed for the non-traditional households. He stated that the competition would be minimally impacted by the application of the bill. Ms. LaBolle emphasized that all the facts are not currently available. She thought anything that was done to enhance the State's benefits would place the State in greater competition with the private sector. Representative Navarre responded that the intent was to extend benefits to people already employed and would not be used as a recruitment tool by the State. Representative Mulder MOVED that CS HB 226 (FIN) be the 20 version before the Committee. Representative Brown OBJECTED. Representative Navarre asked for further clarification of "domestic partnership". Co-Chair Hanley noted that CS HB 226 (FIN) would return the law to the place it was before Judge Greens decision. Statutorily, the decision would close the questions which Judge Green had, clarifying that discrimination is allowed in that particular instance. He added that the strict definition of marriage would be the dividing line. Representative Navarre speculated that there would be a fiscal impact to the Department of Law. He thought that the legislation would be challenged on a constitutional basis. Representative Grussendorf summarized that the two previous Committees agreed to the same changes, whereas, the House Finance Committee is proposing to adopt the original bill, at the same time in which it will be before the Supreme Court. Representative Brown reiterated her original objection, noting that the Committee should be considering the standard, including the constitutional obligations. The Constitution clearly states that all people are equal and have equal rights. The Legislation specifies groups of persons equally qualified, who are being discriminated against. She continued, CS HB 226 (FIN) would mandate legislative discrimination which she strongly opposes. Representative Kohring voiced his support of the committee substitute. He spoke to the philosophical differences between Committee members and addressed the economical cost to the State. Representative Brown asked what the term "legal dependent" meant. Representative Kelly spoke to Amendment #1 which would change that language to "children". A roll call was taken on the MOTION to adopt CS HB 226 (FIN) as the version before the Committee. IN FAVOR: Martin, Mulder, Therriault, Kelly, Kohring, Hanley, Foster. OPPOSED: Navarre, Brown, Grussendorf. Representative Parnell was not present for the vote. The MOTION PASSED (7-3). Representative Kelly MOVED Amendment #1. [Attachment #3]. Representative Brown asked if a couple in a domestic 21 partnership were non-marital status and one of the partners had children, would those children be covered. Representative Therriault replied that the children of the employed partner would be covered. Representative Brown asked who would be excluded by the amendment. Representative Kelly noted that no one would be excluded. He stated that the term "legal dependents" was too broad. There being NO OBJECTION, Amendment #1 was adopted. Representative Mulder MOVED to report CS HB 226 (FIN) out of Committee with individual recommendations and with the accompanying fiscal note. Representative Brown OBJECTED. A roll call was taken on the MOTION to move the bill from Committee. IN FAVOR: Mulder, Therriault, Kelly, Kohring, Martin, Foster, Hanley. OPPOSED: Navarre, Brown, Grussendorf. Representative Parnell was not present for the vote. The MOTION PASSED (7-3). CS HB 226 (FIN) was reported out of Committee with a "do pass' recommendation and with a fiscal note by the Department of Administration. ADJOURNMENT The meeting adjourned at 12:50 P.M. 22