HOUSE FINANCE COMMITTEE May 5, 1998 7:30 P.M. TAPE HFC 98 - 156, Side 1. TAPE HFC 98 - 156, Side 2. TAPE HFC 98 - 157, Side 1. CALL TO ORDER Co-Chair Therriault called the House Finance Committee meeting to order at 7:30 P.M. PRESENT Co-Chair Therriault Representative Kohring Representative J. Davies Representative Martin Representative G. Davis Representative Kelly Representative Grussendorf Representative Mulder Representatives Hanley, Foster and Moses were present for the meeting. ALSO PRESENT Representative Ethan Berkowitz; James Baldwin, Assistant Attorney General, Department of Law; Dan Spencer, Chief Budget Analyst, Office of Management and Budget, Office of the Governor; Kristie Tibbles, Staff, Senator Drue Pearce; Jayne Andreen, Council on Domestic Violence and Sexual Assault, Juneau; Marilyn Wilson, Staff, Senator Bert Sharp; Bruce Richards, Program Coordinator, Office of the Commissioner, Department of Corrections. TESTIFIED VIA TELECONFERENCE Phyllis Johnson, Alaska Railroad Corporation, Anchorage; Susie Barnett, Staff, Select Committee on Legislative Ethics, Anchorage. SUMMARY SB 105 An Act relating to legislative ethics; relating to the filing of disclosures by certain legislative employees and officials; and providing for an effective date. HCS CS SB 105 (FIN) was reported out of Committee with a "no recommendation" and with fiscal notes by the Department of Law dated 4/23/98, the Department of Administration dated 4/23/98 and the Select Committee on Legislative Ethics dated 4/23/98. SB 323 An Act relating to sexual offenses, to those who commit sexual offenses, and to registration of sex offenders; amending Rule 6(r)(2), Alaska Rules of Criminal Procedure; and providing for an effective date. SB 323 was HELD in Committee for further consideration. SB 347 An Act relating to the increase of an appropriation item based on additional federal or other program receipts. SB 347 was HELD in Committee for further consideration. SB 356 An Act relating to treatment under legislative standards of conduct of campaign contributions to legislators during a legislative session; and providing for an effective date. SB 356 was HELD in Committee for further consideration. SCR 11 Creating the Long-Term Care Task Force. CSSCR 11(FIN) was reported out of Committee with a "no recommendation" and with fiscal notes by the Department of Commerce and Economic Development dated 3/4/98, the Office of the Governor dated 3/4/98 and the Legislative Finance Division dated 3/4/98. SENATE BILL NO. 105 "An Act relating to legislative ethics; relating to the filing of disclosures by certain legislative employees and officials; and providing for an effective date." PHYLLIS JOHNSON, (TESTIFIED VIA TELECONFERENCE), ALASKA RAILROAD CORPORATION, ANCHORAGE, addressed comments to the current version of the legislation before the Committee. She noted that the Alaska Railroad agrees that they need to improve the internal code of ethics, specifically in regards to the enforcement and follow up on perceived violations. She advised that the Alaska Railroad Corporation does not object to being included in the legislation, although, the Railroad is concerned with the State Personnel Board as the final decision arbitrator. She stressed that railroad personnel are not State employees and should not be treated as such. Representative Martin pointed out that the proposed legislation provides for a compromise as called for in the Constitution specified in the Executive Budget Act. SUSIE BARNETT, (TESTIFIED VIA TELECONFERENCE), STAFF, SELECT COMMITTEE ON LEGISLATIVE ETHICS, ANCHORAGE, remarked that the Select Committee had not had an opportunity to review the current version of the legislation before the Committee. She noted that there will be sections of the bill which the Finance Committee will not like. Ms. Barnett emphasized that there has been tremendous compromise during the process, and that Sections #13 and Representative Martin questioned if there had been consideration of including a "severability" clause. JAMES BALDWIN, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF LAW, explained that the statutory severability clause creates a slight presumption of severability. An express severability clause would raise that presumption higher in which a court would look at to determine the true intention of the Legislature for those provisions to be tied together. Mr. Baldwin advised that the American Civil Liberties Union (ACLU) lawsuit, contesting the campaign finance provisions, are similar to the ones included the proposed legislation. He suggested that the bill would have a difficult time defending those provisions. Representative Martin asked if the State would be "safe" by including a severability clause at the bottom of the legislation. Mr. Baldwin suggested that could not hurt. He recommended repeating the language contained in AS 0.110.100(b), which would slightly raise the presumption of severability. Representative Mulder recommended that such a change be made on the House floor in order to expediate the process of the bill moving from Committee. Representative Mulder MOVED to report HCS CSSB 105 (FIN) out of Committee with individual recommendations and with the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. HCS CSSB 105 (FIN) was reported out of Committee with "no recommendation" and with a fiscal note by the Department of Law dated 4/23/98 and zero fiscal notes by the House Finance Committee, the Department of Administration dated 4/23/98, and the Select Committee on Legislative Ethics dated 4/23/98. SENATE BILL NO. 347 "An Act relating to the increase of an appropriation item based on additional federal or other program receipts." DAN SPENCER, CHIEF BUDGET ANALYST, OFFICE OF MANAGEMENT AND BUDGET (OMB), OFFICE OF THE GOVERNOR, explained that SB 347 would change the "45 day rule" to a six month rule depending on the Legislative Budget and Audit Committee (LBA) approving the program. According to current statute, from the time that OMB sends an appropriation to LBA, there is 45 days for the Committee to review it for expenditures. Mr. Spencer emphasized that the current system works well. Mr. Spencer made reference to historical cases in which that created a problem. 1. Sitka Airport; 2. Department of Fish & Game test fisheries receipts; 3. Alaska Seafood Marketing Institute (ASMI) expenditures; 4. Payment of low taxes; and the 5. Homer spit timing issue. Mr. Spencer referenced the memo from Mike Greany, Legislative Fiscal Analyst, in regards to the Legislature becoming involved with the option to change the RPL "45 Day Rule". He noted that the memo states that by moving a bill midway through the Legislative Session, would give the Legislature the authority to "disappropriate". Mr. Spencer reiterated that the legislation would not be advantageous to the State. Representative Martin interjected that the legislation would provide a safety value for the Legislature to have better control of the total expenditures throughout any year. Mr. Spencer pointed out that there are no general fund program receipts, as the Legislature has restricted it to federal receipts, designated receipts and EVOCS receipts. Last year in Conference Committee, the EVOCS receipts were inadvertently left out of the House version and were then added back in the Senate version to accommodate the situation. The Administration has stressed that nothing contrary to the Legislature's intent is occuring. Representative Martin spoke to the controversy with the EVOC receipts in which $50 to $100 million dollars existed outside the Legislative Session for the Legislative Budget and Audit Committee to spend. He pointed out that with passage of the proposed legislation, LBA would be required to come before the full legislature in order to fill funding needs. Mr. Spencer stated that the debate preceded the approval of the appropriation. The Legislature knew that the appropriation was happening with regards to the EVOC concern. Representative J. Davies added that an agreement was made between the federal government, the Legislature and the Administration regarding how the Legislature should be involved and the Legislature agreed that the legislative involvement should be through the LBA Committee. Representative J. Davies agreed that some of those appropriations have been controversial, but that the process should not be discarded. Representative J. Davies commented that LBA deals with less than 200 situations per year, and that less than 1% go through the proposed process. He pointed out that the process does work and that LBA's oversight has caused the Administration to change course on a routine basis. Representative G. Davis agreed that there did not appear to be a problem with LBA unauthorized spending. He added that if there were a problem, who ever created it would end up paying if it were unacceptable to the Legislature. (Tape Change HFC 98-156, Side 2). JAMES BALDWIN, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF LAW, recounted the history of Section AS 37.07.080(h). This section comes from a dispute that Governor Hammond had with the Legislature over how to handle the spending of anticipated federal receipts and other custodial and trust receipts which the Governor believed was not part of the State Treasury. In 1975, the Legislature passed a statute which required LBA approval for interim-type spending decisions. A long discussion began between the Governor and the Legislature which culminated in a lawsuit, Kelley versus Hammond. That case went before Judge Stewart to address the issues in dispute: 1. Whether federal receipts had to be appropriated or not; 2. Whether the Legislature could delegate certain lawmaking powers to the LBA Committee; and 3. Transfer between appropriations. Mr. Baldwin continued, a stalemate was reached in the Supreme Court. The Administration won on the ability to delegate to the LBA Committee lawmaking powers to approve budget revisions and the ability to approve transfers to appropriations. The Legislature responded by taking away the power to make appropriations. The Administration did not accept a role for the LBA Committee to approve budget revisions during the interim or the approval of unanticipated federal or other custodial trust receipts. At that time, the Governor and the Legislature agreed that there must be a way to work out the problem. The Governor agreed to wait while the Legislature passed a constitutional amendment. The resolution was turned down by a vote of the people. The resolution would have allowed the Legislature to give lawmaking powers to the LBA Committee to exercise during the interim. At that time the Legislature became dissatisfied having no role for the LBA Committee, and discussions continued as to whether the case should be appealed. That decision resulted in the statute currently before the Committee. SB 347 was HELD in Committee for further consideration. SENATE BILL NO. 323 "An Act relating to sexual offenses, to those who commit sexual offenses, and to registration of sex offenders; amending Rule 6(r)(2), Alaska Rules of Criminal Procedure; and providing for an effective date." KRISTIE TIBBLES, STAFF, SENATOR DRUE PEARCE, explained that the use of children in the production of sexually explicit material, including photographs, films, videos, and computer images is a form of sexual abuse that can result in physical or psychological harm to the children involved. Individuals who utilize children as sexual objects or are sexually attracted to children often seek out and collect sexually explicit materials for their own sexual gratification. Ms. Tibbles pointed out that access to the Internet has become one of the preferred methods of distributing and collecting child pornographic materials; several investigations across the country have revealed thousands of pieces of child pornography in the hands of child pornographers. Congress passed the Child Pornography Prevention Act in 1996 and several states are taking action to strengthen their pornography laws. Ms. Tibbles continued, the Alaska penalty for distribution of child pornography, a Class C felony, is not more than five years. Law enforcement officers are encountering problems in trying to prove distribution. Offenders are often charged with or plead down to possession of child pornography, a Class A misdemeanor offense with a penalty of not more than one year in prison, unless the offender is convicted of more than one count and receives a consecutive sentence. SB 323 would increase the offense for possession of child pornography to a class C felony, and the offense for distribution to a Class B felony offense, punishable by not more than 10 years in prison. Ms. Tibbles pointed out that SB 323 also would create the offense of indecent exposure in the first degree if the offender knowingly masturbates within the observation of a person under 16 years of age. The crime will be a Class C felony offense. The bill makes the existing offense of indecent exposure, indecent exposure in the 2nd degree. The penalty for this offense is a Class A misdemeanor when committed before a person under 16 years of age, and a Class B misdemeanor when committed before a person 16 years or older. Ms. Tibbles explained the SB 323 would require sex offender registration for the offenses of indecent exposure in the first degree, indecent exposure in the second degree if committed before a minor under the age of 16 for the second offense, and possession of child pornography. Currently, only offenders who are convicted for distribution of child pornography are required to register. Ms. Tibbles summarized that the existence and distribution of child pornographic images creates the potential for many types of harm in the community and presents a clear and present danger to all children. Strengthing the penalties for these crimes send a clear message that the degradation and exploitation of our children will not be tolerated. Agencies in support of SB 323 include the Department of Public Safety, the Alaska Peace Officers Association, the Anchorage Police Department, UAF Police, and STAR. JAYNE ANDREEN, EXECUTIVE DIRECTOR, COUNCIL ON DOMESTICE VIOLENCE AND SEXUAL ASSAULT, JUNEAU, voiced support of the proposed legislation. Representative Grussendorf questioned the proposed title of offense of "possession" of child pornography. He thought that "possession" was proposing a bit too stiff penalty. Ms. Andreen pointed out that there is a network that takes place for people who are interested in these types of materials. These are materials that are explicitly set up to sexualize children. She stressed how frightening it is that people are preying upon children for sexual gratification. Representative Martin echoed the avalability of vicious materials taking advantage of children. Representative J. Davies inquired the placement in statute of the definition of "child pornography". Ms. Tibbles replied that the statute that pertains to possession refers back to that definition under the exploitation of a child. The statute site for possession of pornography is AS 11.61.127, and was included on Page 3 of the bill. Representative Grussendorf reiterated that current state law seems adequate when addressing "possession". He questioned the need to escalate it to a Class C felony. Representative J. Davies agreed that the "effort" should be made to "stamp out" those people who are producing the materials. He asked if there was evidence which correlates the possession of child pornography to other kinds of exploitation of children. Ms. Andreen replied that there is a very significant connection between them, which is part of the entire cycle occurring at this time. She emphasized that with the Internet accessibility, it has become an industry. Representative J. Davies warned the possibility of those who are curious, surfing the Internet, and the need to establish the gray areas, so that the otherwise innocent are not tracked. He asked if there was a way to draw a line and limit, perhaps including a rebuttal defense. Representative Kelly asked if possession would include the casual surfer pursuing the Internet. REPRESENTATIVE ETHAN BERKOWITZ responded that it was possible to possess without intending to "possess". He agreed this could create problems and that these issues were discussed in the House Judiciary Committee. Representative J. Davies asked if including "intentional" or "knowing" possession could address the problem on Page 3, Line 2. Representative Kelly thought that "knowingly" would be easier to prove. Representative Berkowitz explained that "possession" was the exercise of dominion and control over an object. Representative J. Davies inquired if storing an images on the computer would be classified as possession. Representative Berkowitz could not answer that. Representative Kelly MOVED to adopt Amendment #1. Representative Mulder OBJECTED. Representative Berkowitz asked that Lines #1 - #3 be deleted from the amendment. He explained that the amendment would address indecent exposure in a crowded situation. He stated that such an act would be difficult to prove that it was directed at a specific individual. Representative Kelly MOVED to amend Amendment #1. There being NO OBJECTION, it was amended. There being NO OBJECTION to the amended Amendment #1, it was adopted. Representative Mulder questioned the point at which a person would move beyond curiosity and into collection. Representative Berkowitz advised that testimony in the House Judiciary Committee indicated that a collection of over 100 was clearly a serious collector with a high correlation of trading and sexual assaults. Following discussion regarding trading and possession, Representative J. Davies MOVED to amend Page 3, Line 2, inserting "knowing" before "possession". There being NO OBJECTION, it was adopted. Co-Chair Therriault noted that the Legislative drafters should phrase that language appropriately. Representative J. Davies questioned if there should be a distinction between "possession" as a Class A misdemeanor and "knowing possession" as a Class C felony. Representative G. Davis pointed out that distribution is the problem, not the possession. Representative Berkowitz elaborated that there is no limit to the number of counts that a person could possess. Representative Mulder spoke to the fiscal note. BRUCE RICHARDS, PROGRAM COORDINATOR, OFFICE OF THE COMMISSIONER, DEPARTMENT OF CORRECTIONS, noted that the Department had submitted an unsigned fiscal note. (Tape Change HFC 98-157, Side 1). Mr. Richards remarked that he had spoken with the Anchorage Police Department asking them what the anticipated caseload would be, based on previous experience. They anticipate three cases a year. The Department's submitted analysis provides the cost to cover that projected average. Representative Mulder noted that he would support the original fiscal note which represented a lesser amount. Mr. Richards pointed out that the proposed bill would transfer the cost of incarcerating people from the federal government to the State government. Ms. Tibbles acknowledged that Senator Pearce had not seen the new fiscal note. Co-Chair Therriault noted that the bill would be HELD in Committee in order to discuss the fiscal impact with Senator Pearce. SB 323 was HELD in Committee for further consideration. SENATE CONCURRENT RESOLUTION NO. 11 Creating the Long-Term Care Task Force. MARILYN WILSON, STAFF, SENATOR BERT SHARP, stated that as Alaska's senior community grows, it is necessary that the State plan for the long-term care and needs of these citizens. She continued, while it is the desirable goal of most families to provide home care for their elderly parents, the realty is that most will live in a long-term care facilities. Either way, the costs of providing long-term care is becoming insurmountable to the State and to our private citizens. In an effort to assure our senior citizens are getting the best care possible, the Legislature in 1996, established a working group to analyze long-term care services available in the State and their projected costs. Ms. Wilson stated that SCR 11 would create a long-term care task force. Their mission would be to review the findings of that working group and to develop an equitable plan for providing an actuarially sound and affordable long-term care option for all of Alaska's senior citizens. She urged the Committee to support of the proposed legislation. Representative J. Davies MOVED to report CSSCR 11 (FIN) out of Committee with individual recommendations and with the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. CSSCR 11 (FIN) was reported out of Committee with a "no recommendation" and with fiscal notes by the Department of Commerce and Economic Development dated 3/4/98, the Office of the Governor dated 3/4/98 and the Legislative Finance Division dated 3/4/98. ADJOURNMENT The meeting adjourned at 9:25 P.M. H.F.C. 12 5/05/98 eve