Legislature(2007 - 2008)HOUSE FINANCE 519

03/03/2008 01:30 PM House FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 3 REQUIREMENTS FOR DRIVER'S LICENSE/I.D. TELECONFERENCED
<Bill Hearing Postponed>
+= HB 200 WORKERS' COMP: DISEASE PRESUMPTION TELECONFERENCED
Moved CSHB 200(FIN) Out of Committee
+ HB 326 NAT'L GUARD: COMMAND/ACTIVE SERVICE/PAY TELECONFERENCED
Heard & Held
+ HB 413 EXTENDING THE REAL ESTATE COMMISSION TELECONFERENCED
Moved Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= SB 72 COMMUNITY REVENUE SHARING TELECONFERENCED
Moved HCS CSSB 72(FIN) Out of Committee
                  HOUSE FINANCE COMMITTEE                                                                                       
                       March 3, 2008                                                                                            
                         1:39 p.m.                                                                                              
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Meyer called the House  Finance Committee meeting to                                                                   
order at 1:39:28 PM.                                                                                                          
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Mike Chenault, Co-Chair                                                                                          
Representative Kevin Meyer, Co-Chair                                                                                            
Representative Bill Stoltze, Vice-Chair                                                                                         
Representative Harry Crawford                                                                                                   
Representative Mike Hawker                                                                                                      
Representative Reggie Joule                                                                                                     
Representative Mike Kelly                                                                                                       
Representative Mary Nelson                                                                                                      
Representative Bill Thomas Jr.                                                                                                  
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Les Gara                                                                                                         
Representative John Harris                                                                                                      
                                                                                                                                
ALSO PRESENT                                                                                                                  
Tom  Wright,   Staff,  Representative  Mike   Chenault;  Bill                                                                   
Rolfzen,   Local   Government   Specialist,   Department   of                                                                   
Commerce,   Community  and   Economic  Development;   Suzanne                                                                   
Armstrong, Staff, Representative  Kevin Meyer; Representative                                                                   
Nancy  Dahlstrom; Eleanor  Wolf, Staff,  Senator Kurt  Olson;                                                                   
Pat   Davidson,  Legislative   Auditor,   Legislative   Audit                                                                   
Division,   Legislative   Affairs  Agency;   McHugh   Pierre,                                                                   
Legislative Liaison, Department of Military Affairs.                                                                            
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Chris Maisch,  Director, Division of Forestry,  Department of                                                                   
Natural  Resources;  Michael   Mitchell,  Assistant  Attorney                                                                   
General, Department of Law.                                                                                                     
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 200    "An  Act relating  to the  presumption of  coverage                                                                   
          for a workers' compensation claim for disability                                                                      
          as a result of certain diseases for certain                                                                           
          occupations."                                                                                                         
                                                                                                                                
          CS HB 200(FIN) was REPORTED out of Committee with                                                                     
          a   "do   pass"   recommendation   and   with   new                                                                   
          indeterminate  fiscal  note  by the  Department  of                                                                   
          Labor    and   Workforce   Development    and   new                                                                   
          indeterminate  fiscal  note  by the  Department  of                                                                   
          Administration.                                                                                                       
                                                                                                                                
HB 326    "An Act authorizing the governor to delegate to                                                                       
          the  adjutant general  the authority  to order  the                                                                   
          organized  militia into  active  state service  and                                                                   
          authorizing  the payment  of Alaska National  Guard                                                                   
          called   into  active   state   service  to   fight                                                                   
          wildfires at  rates of pay established  for certain                                                                   
          emergency  fire-fighting  personnel; and  providing                                                                   
          for an effective date."                                                                                               
                                                                                                                                
          HB 326 was HEARD and HELD in Committee for further                                                                    
          consideration.                                                                                                        
                                                                                                                                
HB 413    "An Act extending the termination date for the                                                                        
          Real  Estate  Commission;   and  providing  for  an                                                                   
          effective date."                                                                                                      
                                                                                                                                
          HB 413 was REPORTED out of Committee with "no                                                                         
          recommendation"   and  new   fiscal  note   by  the                                                                   
          Department  of  Commerce,  Community  and  Economic                                                                   
          Development.                                                                                                          
                                                                                                                                
CSSB 72(FIN)                                                                                                                    
          "An Act  relating to the community  revenue sharing                                                                   
          program; and providing for an effective date."                                                                        
                                                                                                                                
          HCS  CSSB 72(FIN)  was  REPORTED  out of  Committee                                                                   
          with a  "do pass" recommendation and  with new zero                                                                   
          fiscal   note   by   the  Department   of   Natural                                                                   
          Resources,  new fiscal  note by  the House  Finance                                                                   
          Committee   for   the   Department   of   Commerce,                                                                   
          Community  and Economic  Development, and  new zero                                                                   
          fiscal note by the Department of Administration.                                                                      
                                                                                                                                
CS FOR SENATE BILL NO. 72(FIN)                                                                                                
                                                                                                                                
     "An Act relating to the community revenue sharing                                                                          
     program; and providing for an effective date."                                                                             
                                                                                                                                
Co-Chair Meyer reviewed that the Committee had previously                                                                       
adopted Amendments #1 and #2, and had withdrawn Amendment                                                                       
#3.                                                                                                                             
                                                                                                                                
1:40:47 PM                                                                                                                    
                                                                                                                                
Co-Chair Chenault MOVED to ADOPT  Amendment #3.                                                                                 
                                                                                                                                
     Page  7,  lines  11-13:   Delete  all  material.  Insert                                                                   
     "assembly approval. If there  is more than one qualified                                                                   
     entity in  an unincorporated  community in a  borough or                                                                   
     unified  municipality, one of  the entities  may receive                                                                   
     the  entire  payment,  or  the  payment  may  be  shared                                                                   
     between  two  or  more of  the  qualified  entities,  as                                                                   
     determined by the assembly.                                                                                                
     (c) An unincorporated community  in a borough or unified                                                                   
     municipality  is   eligible  for  a   community  revenue                                                                   
     sharing payment only if at  least three of the following                                                                   
     services  are generally  available to  all residents  of                                                                   
     the  unincorporated  community  and  each of  the  three                                                                   
     services,  in any  combination, are  provided by  one of                                                                   
     more  qualifying incorporated  nonprofit  entities or  a                                                                   
     Native village council or  are substantially paid for by                                                                   
     the residents  of the  unincorporated community  through                                                                   
     taxes, charges,  or assessments levied or  authorized by                                                                   
     the borough or unified municipality:"                                                                                      
                                                                                                                                
Vice-Chair Stoltze OBJECTED.                                                                                                    
                                                                                                                                
Co-Chair  Chenault pointed  out that  in previous  discussion                                                                   
there  had been  question about  which  communities would  be                                                                   
eligible  for   the  revenue   sharing.  The  Department   of                                                                   
Commerce, Community  and Economic Development  (DCCED) worked                                                                   
with staff  to put  together a  list of potentially  eligible                                                                   
communities.                                                                                                                    
                                                                                                                                
TOM WRIGHT,  STAFF, REPRESENTATIVE  MIKE CHENAULT,  explained                                                                   
the  list  submitted  by DCCED  ("The  Estimated  Potentially                                                                   
Eligible   Unincorporated  Community   List  Under   Proposed                                                                   
Amendment  #3," Copy  on File).  The 31  communities in  bold                                                                   
typeface are  already represented and receiving  payment from                                                                   
the State  under the current  revenue-sharing plan.  The list                                                                   
also contains 55 communities that  may or may not be eligible                                                                   
to  receive the  revenue. Under  the  amendment, the  borough                                                                   
would  determine  if the  criteria  is met.  The  communities                                                                   
accepted would be eligible for the $20,000 payment.                                                                             
                                                                                                                                
Co-Chair Meyer asked what the  total potential cost would be.                                                                   
Mr.  Wright  answered   that  if  all  55   communities  were                                                                   
accepted, the  cost would be  an additional $1.1  million. He                                                                   
expressed  doubt that all  the communities  would be  able to                                                                   
meet the criteria.                                                                                                              
                                                                                                                                
Co-Chair  Chenault explained  that  the  seven criteria  used                                                                   
were  on page  7 of  the bill.  The community  would have  to                                                                   
provide a minimum  of three of the seven. He  reiterated that                                                                   
the borough would determine if the criteria were met.                                                                           
                                                                                                                                
Vice-Chair  Stoltze  expressed  concerns  that  some  of  the                                                                   
smaller  communities  were  analogous   to  large  homeowners                                                                   
associations  that  would  become   eligible  for  funds.  He                                                                   
wondered if  the intent  of revenue sharing  would be  met in                                                                   
those situations.                                                                                                               
                                                                                                                                
1:46:43 PM                                                                                                                    
                                                                                                                                
Representative   Hawker  thought   the   list  of   potential                                                                   
communities  was quantifiable.  He  added  that the  criteria                                                                   
established in  the amendment  does not increase  the funding                                                                   
mechanism.  He  thought  the   amendment  would  promote  the                                                                   
desired  outcome of  having communities  take  responsibility                                                                   
for providing public services. He supported the amendment.                                                                      
                                                                                                                                
Co-Chair  Chenault  listed  distinct  areas  with  their  own                                                                   
organized governance in his district.                                                                                           
                                                                                                                                
Representative  Thomas  noticed Haines,  a  community in  his                                                                   
district,  was  on the  list.  He  noted  that Haines  had  a                                                                   
different status as a consolidated  borough and believed they                                                                   
would get more than $20,000.                                                                                                    
                                                                                                                                
BILL  ROLFZEN,  LOCAL GOVERNMENT  SPECIALIST,  DEPARTMENT  OF                                                                   
COMMERCE, COMMUNITY AND ECONOMIC  DEVELOPMENT, explained that                                                                   
the list  of unincorporated  communities  was taken  from the                                                                   
U.S.  Census Bureau.  The  communities  are not  incorporated                                                                   
cities but  meet the  definition of  community. Haines  was a                                                                   
city for  many years;  when it  consolidated with the  Haines                                                                   
Borough,  the city  government  was dissolved.  They are  now                                                                   
considered  an  unincorporated  community within  the  Haines                                                                   
Borough, which would make them eligible for the $20,000.                                                                        
                                                                                                                                
1:51:08 PM                                                                                                                    
                                                                                                                                
Representative   Thomas   wondered    if   by   consolidating                                                                   
government, the  community lost opportunity for  revenue. Mr.                                                                   
Rolfzen replied that  the city of Haines would  have received                                                                   
a $75,000 base  plus the per capita. Once the  city dissolved                                                                   
and  consolidated with  the Borough,  eligibility changed  to                                                                   
$20,000.  However, there  were cost  savings as  a result  of                                                                   
streamlining government. Representative  Thomas did not think                                                                   
there was savings from unifying.                                                                                                
                                                                                                                                
Vice-Chair Stoltze WITHDREW his OBJECTION.                                                                                      
                                                                                                                                
There being NO OBJECTION, Amendment #3 was ADOPTED.                                                                             
                                                                                                                                
1:52:48 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer MOVED to ADOPT Amendment #4.                                                                                     
                                                                                                                                
     Page   5,   line   7:   Delete   "$50,000,000",   Insert                                                                   
     "$60,000,000";  Page 5, line  9: Delete  "$150,000,000",                                                                   
     Insert   "$180,000,000";   Page  5,   line  11:   Delete                                                                   
     $50,000,000,  Insert  "$60,000,000";  Page 5,  line  22:                                                                   
     Delete  "50,000,000, divided  by  50,000,000, plus  one,                                                                   
     multiplied by 300,000", Insert  "$60,000,000, divided by                                                                   
     60,000,000,  plus one, multiplied  by 384,000";  Page 6,                                                                   
     line 3: Delete "fifteenth", Insert "nineteenth"                                                                            
                                                                                                                                
Vice-Chair Stoltze OBJECTED for discussion purposes.                                                                            
                                                                                                                                
Co-Chair Meyer  provided a general overview of  Amendment #4.                                                                   
The Governor had recommended $75  million for revenue sharing                                                                   
but had only recommended a one-year  solution. Senate Bill 72                                                                   
recommends  $50 million  each year  for three  years. If  the                                                                   
price  of oil  stays  above $60,  20%  of that  progressivity                                                                   
amount will  be added to the  fund. Hopefully, the  fund will                                                                   
continue  as  long as  oil  prices  stay high.  Amendment  #4                                                                   
proposes a  compromise of  $60 million,  higher than  the $50                                                                   
million  recommended   by  the  Senate  but   less  than  the                                                                   
Governor's request  of $75 million.  The total for  the three                                                                   
years becomes $180 million.                                                                                                     
                                                                                                                                
SUZANNE   ARMSTRONG,  STAFF,   REPRESENTATIVE  KEVIN   MEYER,                                                                   
provided more detail regarding  Amendment #4. Page 5, line 22                                                                   
makes  the  adjustments  to the  formula  and  increases  the                                                                   
borough  basic payment.  The basic payments  for the  borough                                                                   
will   be   $384,000;  city   reserves   and   unincorporated                                                                   
communities  inside boroughs  and unincorporated  communities                                                                   
outside of  boroughs will  be based  on $384,000 rather  than                                                                   
$300,000.  Page 6,  line 3 changes  the factor  by which  the                                                                   
basic  payment  for  unincorporated  communities  inside  the                                                                   
boroughs will be calculated to  one nineteenth instead of one                                                                   
fifteenth to keep payments roughly at the $20,000 level.                                                                        
                                                                                                                                
Co-Chair Meyer added  that the level jumps from  $320 to $384                                                                   
because  of the floating  base.  As that amount  goes up,  so                                                                   
does the base.                                                                                                                  
                                                                                                                                
1:56:14 PM                                                                                                                    
                                                                                                                                
Vice-Chair   Stoltze  sought   clarification  regarding   the                                                                   
changes in the numbers.                                                                                                         
                                                                                                                                
Representative  Hawker  queried  Co-Chair  Meyer's  statement                                                                   
regarding  a  "three-year  program."   Representative  Hawker                                                                   
surmised that  the bill and  the amendment would  establish a                                                                   
permanent and  durable change of statute that  would continue                                                                   
to fund as long as oil prices  remained above $60 per barrel.                                                                   
Co-Chair Meyer  clarified that the bill intends  a three-year                                                                   
minimum, but  hoped it  would last twenty  years or  more. He                                                                   
acknowledged the fund  was dependent on the price  of oil. He                                                                   
pointed out  that if  the price  goes below $60,  communities                                                                   
would have time to make adjustments.                                                                                            
                                                                                                                                
1:58:19 PM                                                                                                                    
                                                                                                                                
Representative  Kelly  did not  like  the phrase  "twenty  or                                                                   
thirty  years."   He  said  he   would  not  object   to  the                                                                   
amendments, but voiced his concerns  regarding over-spending.                                                                   
                                                                                                                                
Representative Crawford  referred to other bills  that target                                                                   
the  progressivity funding  source  and  wondered what  would                                                                   
happen  if the  Legislature passed  two  bills targeting  the                                                                   
same source.  Co-Chair Meyer thought the  bill Representative                                                                   
Crawford was referring to would  not be considered for a vote                                                                   
of the people for another year.                                                                                                 
                                                                                                                                
Ms. Armstrong added  that Amendment #1 added  language to the                                                                   
section dealing with progressivity.  The bill would not limit                                                                   
the Legislature's  ability to appropriate General  Fund money                                                                   
or other revenue sources.                                                                                                       
                                                                                                                                
Vice-Chair  Stoltze WITHDREW  his OBJECTION.  There being  NO                                                                   
further OBJECTION, Amendment #4 was ADOPTED.                                                                                    
                                                                                                                                
2:00:57 PM                                                                                                                    
                                                                                                                                
Representative    Kelly    restated     concerns    regarding                                                                   
progressivity  and  how it  would  fund revenue  sharing.  He                                                                   
thought  that, allowing  for budget growth,  the State  would                                                                   
not have enough money without  using all of the progressivity                                                                   
revenue. He  worried that the  debate was not  addressing the                                                                   
difficulty of sustaining the payments  to the municipalities.                                                                   
He stated his intent to vote against the bill.                                                                                  
                                                                                                                                
2:03:26 PM                                                                                                                    
                                                                                                                                
Representative Hawker  reiterated his concerns  regarding the                                                                   
State's inability  to predict future revenue  sharing. He was                                                                   
reluctant to go forward with revenue  sharing, but said there                                                                   
were two  reasons he  could move forward  with SB  72. First,                                                                   
the  self-limiting component  in the  bill says  that if  the                                                                   
price or production of oil declines,  the program would phase                                                                   
itself out. Second,  he thought the State's  highest priority                                                                   
should  be  putting  wealth  into   the  communities  through                                                                   
revenue  sharing. He  read the  statement of  purpose of  the                                                                   
Alaska Statehood Act, Section  6, which selected land and the                                                                   
resource  wealth   "For  the   purposes  of  furthering   the                                                                   
development of and expansion of  communities." Representative                                                                   
Hawker thought  the revenue sharing  program reflected  in SB
72  was exactly  what the  crafters of  statehood wanted.  He                                                                   
stated his intention to support the bill.                                                                                       
                                                                                                                                
2:07:02 PM                                                                                                                    
                                                                                                                                
Representative Thomas talked about  his experience serving on                                                                   
a borough  assembly during  a time  when revenue sharing  was                                                                   
lost.  He  supports   revenue  sharing  with   clear  limits,                                                                   
especially related to building  infrastructure. He wants debt                                                                   
retirement  instead and would  like to  see limits  placed on                                                                   
how the municipalities spend the money.                                                                                         
                                                                                                                                
Co-Chair Meyer  agreed that  it would  be interesting  to see                                                                   
how communities would use the  money. He expressed confidence                                                                   
in the bill and encouraged movement.                                                                                            
                                                                                                                                
2:09:50 PM                                                                                                                    
                                                                                                                                
Representative Hawker acknowledged  Representative Carl Moses                                                                   
and  thought the  Act  should  be dedicated  to  him and  his                                                                   
"Never give up" legacy.                                                                                                         
                                                                                                                                
Representative Kelly stated that  he supports revenue sharing                                                                   
but wants  to control  the budget. He  thought a  policy call                                                                   
would be needed regarding a state tax.                                                                                          
                                                                                                                                
2:12:47 PM                                                                                                                    
                                                                                                                                
Vice-Chair Stoltze MOVED to report  HCS for CSSB 72 (FIN) out                                                                   
of Committee  with  individual recommendations  and with  new                                                                   
fiscal  note   by  the  House   Finance  Committee   for  the                                                                   
Department of  Commerce, Community and Economic  Development,                                                                   
new zero  fiscal note  by the  Department of  Administration,                                                                   
and  new  zero  fiscal  note by  the  Department  of  Natural                                                                   
Resources.                                                                                                                      
                                                                                                                                
AT EASE:       2:13:42 PM                                                                                                     
                                                                                                                                
RECONVENED:    2:14:07 PM                                                                                                     
                                                                                                                                
Representative Kelly OBJECTED.  A roll call vote was taken on                                                                   
the motion.                                                                                                                     
                                                                                                                                
IN FAVOR: Nelson,  Stoltze, Thomas, Crawford,  Hawker, Joule,                                                                   
Meyer and Chenault                                                                                                              
OPPOSED: Kelly                                                                                                                  
                                                                                                                                
Representative  Harris and  Representative  Gara were  absent                                                                   
from the vote.                                                                                                                  
                                                                                                                                
The MOTION PASSED (8/1).                                                                                                        
                                                                                                                                
HCS CSSB  72(FIN) was  REPORTED out of  Committee with  a "do                                                                   
pass" recommendation  and with  new zero  fiscal note  by the                                                                   
Department  of  Natural Resources,  new  fiscal  note by  the                                                                   
House  Finance  Committee  for the  Department  of  Commerce,                                                                   
Community and Economic Development,  and new zero fiscal note                                                                   
by the Department of Administration.                                                                                            
                                                                                                                                
HOUSE BILL NO. 200                                                                                                            
                                                                                                                                
     "An Act relating to the presumption of coverage for a                                                                      
     workers' compensation claim for disability as a result                                                                     
     of certain diseases for certain occupations."                                                                              
                                                                                                                                
2:16:27 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer  MOVED to  ADOPT Amendment #1,  25-LS0748\M.4,                                                                   
Bailey, 2/28/08 (Copy on File).                                                                                                 
                                                                                                                                
Vice-Chair Stoltze OBJECTED.                                                                                                    
                                                                                                                                
Ms.  Armstrong  explained  that   Amendment  #1  removes  the                                                                   
section that provides a presumption  for contagious diseases,                                                                   
requires  annual   exams  for   the  first  seven   years  of                                                                   
employment,   and  clarifies   that   the   seven  years   of                                                                   
firefighting  service  must take  place  in Alaska.  Co-Chair                                                                   
Meyer  added  that  many  states   do  not  cover  infectious                                                                   
diseases.  Ms.  Armstrong elaborated  that  a  review of  the                                                                   
statutes of  other states  revealed that infections  diseases                                                                   
are being added.                                                                                                                
                                                                                                                                
2:19:57 PM                                                                                                                    
                                                                                                                                
Ms.  Armstrong  reported  that the  Alaska  Municipal  League                                                                   
Joint   Insurance   Association    (AMLJIA),   which   covers                                                                   
municipalities,  supports the  amendment  because it  narrows                                                                   
down the  class of people  covered under HB 200.  Previously,                                                                   
the  bill  would   have  covered  fire   firefighters,  peace                                                                   
officers, emergency  medical and rescue personnel  as well as                                                                   
others, making  it a large  group. Co-Chair Meyer  referenced                                                                   
the letter from AMLJIA (Copy on File).                                                                                          
                                                                                                                                
REPRESENTATIVE NANCY  DAHLSTROM, SPONSOR, spoke  to the bill.                                                                   
She  preferred  the  original  version  of HB  200,  but  was                                                                   
willing to  support the amendment  in the interest  of moving                                                                   
the bill forward. She thought  future studies would show that                                                                   
the cost  for covering  a broader  range of  workers is  less                                                                   
than  some believe,  but  understood that  the  change was  a                                                                   
policy  call  of  the  present   Legislature.  Representative                                                                   
Hawker  shared Representative  Dahlstrom's  view and  thought                                                                   
the bill, though compromised,  was acceptable. Co-Chair Meyer                                                                   
concurred.                                                                                                                      
                                                                                                                                
Vice-Chair  Stoltze stated  that  he preferred  the  original                                                                   
bill and was unhappy that AMLJIA was not present.                                                                               
                                                                                                                                
2:23:44 PM                                                                                                                    
                                                                                                                                
Representative  Thomas  commented  that the  Committee  could                                                                   
vote the amendment down and have  AMLJIA come to work further                                                                   
on the bill.  He agreed with Representative  Stotlz that they                                                                   
should be present for the discussion.                                                                                           
                                                                                                                                
Ms. Armstrong  stated for  the record  that Amendment  #1 was                                                                   
not brought forward by AMLJIA.                                                                                                  
                                                                                                                                
Vice-Chair  Stoltze WITHDREW  his OBJECTION.  There being  no                                                                   
further OBJECTION, Amendment #1 was ADOPTED.                                                                                    
                                                                                                                                
2:26:08 PM                                                                                                                    
                                                                                                                                
Representative  Kelly   advocated  for  other   workers  with                                                                   
dangerous jobs  and stated his  concern with protecting  only                                                                   
certain groups. He said he would  not be supporting the bill.                                                                   
                                                                                                                                
Co-Chair Meyer referred to indeterminate  fiscal notes. Vice-                                                                   
Chair Stoltze  wondered if the  amendment changed  the nature                                                                   
of the fiscal notes.                                                                                                            
                                                                                                                                
2:29:38 PM                                                                                                                    
                                                                                                                                
Representative Nelson stated for  the record that she thought                                                                   
it  very  unfair  that  another   indeterminate  fiscal  note                                                                   
attached to a minority bill protecting  families had not been                                                                   
acceptable.  She   asserted  that  the  indeterminate   notes                                                                   
attached to HB 200 should be treated  in the same manner. Co-                                                                   
Chair Meyer  thought the  note attached to  HB 200  was truly                                                                   
indeterminate  as  the  diseases   could  not  be  predicted,                                                                   
whereas the other note could be quantified.                                                                                     
                                                                                                                                
Representative  Nelson  stressed that  she  does  not have  a                                                                   
problem  with the bill,  but protested  the double  standards                                                                   
shown  in  the Committee  regarding  fiscal  notes.  Co-Chair                                                                   
Meyer  said  there was  no  intent  to  favor one  bill  over                                                                   
another.                                                                                                                        
                                                                                                                                
Co-Chair Chenault  concurred. He wanted to  see indeterminate                                                                   
fiscal notes  dealt with  better. He promised  Representative                                                                   
Nelson to  look more closely  at all indeterminate  notes. He                                                                   
thought HB 200 was unusual and had few risks.                                                                                   
                                                                                                                                
2:33:36 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Stoltze MOVED  to report  CS HB  200(FIN) out  of                                                                   
Committee  with  individual  recommendations   and  with  new                                                                   
indeterminate  fiscal note  by  the Department  of Labor  and                                                                   
Workforce Development  and new  indeterminate fiscal  note by                                                                   
the Department  of Administration. There being  NO OBJECTION,                                                                   
it was so ordered.                                                                                                              
                                                                                                                                
CS  HB 200(FIN)  was REPORTED  out  of Committee  with a  "do                                                                   
pass" recommendation  and with new indeterminate  fiscal note                                                                   
by the Department of Labor and  Workforce Development and new                                                                   
indeterminate    fiscal   note    by   the   Department    of                                                                   
Administration.                                                                                                                 
                                                                                                                                
2:35:26 PM                                                                                                                    
                                                                                                                                
HOUSE BILL NO. 413                                                                                                            
                                                                                                                                
     "An Act extending the termination date for the Real                                                                        
     Estate Commission; and providing for an effective                                                                          
     date."                                                                                                                     
                                                                                                                                
ELEANOR WOLF,  STAFF, SENATOR KURT OLSON, explained  that the                                                                   
bill extends the sunset date for  the Real Estate Commission.                                                                   
                                                                                                                                
Co-Chair  Meyer  mentioned  the   zero  fiscal  note  by  the                                                                   
Department of Commerce, Community and Economic Development.                                                                     
                                                                                                                                
Representative Hawker commented  on the audit (Copy on File),                                                                   
particularly  the Commissioner's  letter  recommending a  fee                                                                   
analysis.                                                                                                                       
                                                                                                                                
2:37:52 PM                                                                                                                    
                                                                                                                                
PAT   DAVIDSON,  LEGISLATIVE   AUDITOR,   LEGISLATIVE   AUDIT                                                                   
DIVISION, LEGISLATIVE  AFFAIRS AGENCY,  related that  the fee                                                                   
analysis had been conducted. The  Department had been failing                                                                   
to  clear  out  their credit  card  suspense  account.  After                                                                   
recalculating,  Legislative Audit found  the Board  no longer                                                                   
showed   a   deficit.   Representative   Hawker   asked   for                                                                   
clarification regarding the failure  to clear the credit card                                                                   
account.   Ms.  Davidson replied  that over  the last  couple                                                                   
years  the Division  has  expanded the  ability  to pay  with                                                                   
credit cards.  There were receipts  of $475,000 from the real                                                                   
estate  web  site,  which would  have  cleared  the  deficit.                                                                   
During the next audit this will be looked at.                                                                                   
                                                                                                                                
Representative  Hawker characterized  the  operations of  the                                                                   
Department  in losing track  of $500,000  of public  funds as                                                                   
serious neglect.   Ms.  Davidson agreed that  this is  a risk                                                                   
area  of  accountability.    She  explained  that  the  funds                                                                   
remained  in  the  State's control,  but  were  not  properly                                                                   
allocated.  She became aware  of the  failure only  after the                                                                   
audit. Until  Legislative Audit  gets into the  next sunsets,                                                                   
she won't  have a clear view  of where the  failure occurred.                                                                   
Representative  Hawker  did not  think  the  issue should  be                                                                   
addressed in the Finance Committee.                                                                                             
                                                                                                                                
Ms. Davidson said  the Department's response will  be to look                                                                   
at this issue during the next  audit.  She said the Committee                                                                   
was free to request a direct audit.                                                                                             
                                                                                                                                
2:43:25 PM                                                                                                                    
                                                                                                                                
Co-Chair  Meyer commented  that  the issue  requires  further                                                                   
attention. Representative Hawker  said he would be contacting                                                                   
the  chair of  the  Labor  and Commerce  Committee  regarding                                                                   
oversight hearings.                                                                                                             
                                                                                                                                
2:44:10 PM                                                                                                                    
                                                                                                                                
Vice-Chair Stoltze  MOVED to report  HB 413 out  of Committee                                                                   
with individual  recommendations and with new  fiscal note by                                                                   
the   Department   of  Commerce,   Community   and   Economic                                                                   
Development. There being NO OBJECTION, it was so ordered.                                                                       
                                                                                                                                
HB   413   was   REPORTED   out   of   Committee   with   "no                                                                   
recommendation"  and new  fiscal  note by  the Department  of                                                                   
Commerce, Community and Economic Development.                                                                                   
                                                                                                                                
2:45:02 PM                                                                                                                    
                                                                                                                                
HOUSE BILL NO. 326                                                                                                            
                                                                                                                                
     "An  Act authorizing  the  governor to  delegate to  the                                                                   
     adjutant  general the authority  to order the  organized                                                                   
     militia  into active state  service and authorizing  the                                                                   
     payment  of Alaska  National  Guard  called into  active                                                                   
     state  service  to  fight  wildfires  at  rates  of  pay                                                                   
     established   for   certain    emergency   fire-fighting                                                                   
     personnel; and providing for an effective date."                                                                           
                                                                                                                                
MCHUGH PIERRE,  LEGISLATIVE LIAISON,  DEPARTMENT OF  MILITARY                                                                   
AND  VETERANS  AFFAIRS (DMVA),  explained  that  HB 326  came                                                                   
about  when  the  Department  realized  that  fire  fighters,                                                                   
organized through  the Department of Natural  Resources, were                                                                   
getting  paid federal  rates,  while National  Guard  members                                                                   
working as fire fighters were  being paid at the state active                                                                   
duty  rate,  as much  as  75%  less. Statute  prohibited  the                                                                   
disparity from being corrected;  HB 326 will rectify that. In                                                                   
addition,   the  bill   allows  the   Governor  to   delegate                                                                   
activation  of  the  National  Guard  for  wildfire  fighting                                                                   
purposes in times of emergency.                                                                                                 
                                                                                                                                
Representative Thomas asked if  payment would be retroactive.                                                                   
Mr.  Pierre said  it  was not  retroactive,  but would  begin                                                                   
immediately.   Representative   Thomas  shared   a   personal                                                                   
experience. He  questioned why a  civilian would be  paid the                                                                   
same as  a military person. Mr.  Pierre replied that  the pay                                                                   
will be equitable for all working on the fire line.                                                                             
                                                                                                                                
Representative  Kelly  voiced  concern  about the  costs.  He                                                                   
wondered if this  was a unique situation. Mr.  Pierre replied                                                                   
that fire fighting would be the  exception for National Guard                                                                   
members.                                                                                                                        
                                                                                                                                
2:50:20 PM                                                                                                                    
                                                                                                                                
CHRIS MAISCH,  DIRECTOR, DIVISION OF FORESTRY,  DEPARTMENT OF                                                                   
NATURAL  RESOURCES  (DNR)  (Testified   via  teleconference),                                                                   
testified  in  support  of  HB 326.  He  explained  that  the                                                                   
National Guard has  only been used four times  in the history                                                                   
of the Division  of Forestry (DOF) fire fighting.  When Guard                                                                   
members are not  on active duty, they are paid  their regular                                                                   
salary.  He said  the issue was equal pay for  equal work. He                                                                   
described the Guard's duties.                                                                                                   
                                                                                                                                
Mr. Maisch  commented  on the  zero fiscal  note. Use of  the                                                                   
National  Guard for  fire fighting  has  been infrequent  and                                                                   
cannot be predicted.                                                                                                            
                                                                                                                                
Representative  Kelly  asked   about  rate  of  pay  and  the                                                                   
assumption  that there  are  several levels  of  firefighting                                                                   
classes.   He  wondered if  the Guard  would come  in at  the                                                                   
lowest  class as they  are not  trained fire  fighters.   Mr.                                                                   
Maisch explained  the classification  system (Copy  on File).                                                                   
Representative Kelly noted his support for the bill.                                                                            
                                                                                                                                
2:54:23 PM                                                                                                                    
                                                                                                                                
Mr. Pierre  added that the  National Guard is  only activated                                                                   
for  the specific  task  they are  trained  for, usually  the                                                                   
helicopter and crew members.                                                                                                    
                                                                                                                                
2:55:19 PM                                                                                                                    
                                                                                                                                
PUBLIC TESTIMONY CLOSED.                                                                                                        
                                                                                                                                
Co-Chair Meyer MOVED to ADOPT Amendment #1, (Copy on File).                                                                     
                                                                                                                                
     Page  1, line  2:  Delete "wildfire",  Insert  "wildland                                                                   
     fire";  Page  1,  line  3:   Delete  "wildfire",  Insert                                                                   
     "wildland  fire";  Page 1,  line 5:  Delete  "wildfire",                                                                   
     Insert  "wildland   fire";  Page  1,  line   11:  Delete                                                                   
     "wildfire",  Insert "wildland  fire"; Page  2, line  13:                                                               
     Delete "wildfire", Insert  "wildland fire"; Page 2, line                                                               
     15: Delete  "wildfire", Insert "wildland fire";  Page 2,                                                               
     line  16:  Delete  all material  and  insert:  "wildland                                                                 
     fire"  includes  the  uncontrolled   burning  of  grass,                                                                 
     brush, timber, and other  natural vegetative material.";                                                                 
     Page  2, line  24: Delete  "wildfire", Insert  "wildland                                                               
     fire"; Page 3, lines 9-10:  (2) "wildland fire" includes                                                               
     the uncontrolled  burning of  grass, brush,  timber, and                                                                 
     other natural vegetative material."                                                                                      
                                                                                                                                
Vice-Chair Stoltze OBJECTED.                                                                                                    
                                                                                                                                
Mr. Pierre explained  the effort to change the  definition to                                                                   
"wildland fire."                                                                                                                
                                                                                                                                
MICHAEL MITCHELL,  ASSISTANT ATTORNEY GENERAL,  DEPARTMENT OF                                                                   
LAW (Testified  via teleconference), explained  Amendment #1.                                                                   
The term "wildland fire" is the  modern terminology and would                                                                   
make the language consistent with other statute.                                                                                
                                                                                                                                
2:57:22 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Stoltze WITHDREW  his OBJECTION.  There being  NO                                                                   
further OBJECTION, Amendment #1 was ADOPTED.                                                                                    
                                                                                                                                
Co-Chair Meyer introduced the fiscal notes.                                                                                     
                                                                                                                                
Representative Hawker  said he would like to  see both fiscal                                                                   
notes revised. He  asked for clarification on  the costs. Mr.                                                                   
Pierre  explained that  DMVA expects  zero  cost because  DNR                                                                   
reimburses  DMVA for  real  time use  of  equipment and  man-                                                                   
hours.  However,  other expenses  may  be incurred,  such  as                                                                   
equipment  damages. Representative  Hawker thought  the other                                                                   
expenses would exist regardless  of what members of the Guard                                                                   
were paid. Mr. Pierre agreed.                                                                                                   
                                                                                                                                
Representative  Hawker  maintained  that  proper  policy  and                                                                   
procedure had  not been followed regarding the  fiscal notes.                                                                   
He appreciated  the  indeterminate nature  of the  situation,                                                                   
but wanted  to see the fiscal  note cleared up with  zeros on                                                                   
the lines  that should have zeros,  in order to  quantify the                                                                   
State's exposure.                                                                                                               
                                                                                                                                
3:00:57 PM                                                                                                                    
                                                                                                                                
Representative Hawker turned to  the DNR fiscal note and said                                                                   
the  fiscal note  does not  explain  adequately the  possible                                                                   
costs, as the components are known.                                                                                             
                                                                                                                                
Mr. Maisch  said the formula of  who pays is  complicated and                                                                   
different for each fire. He gave a more detailed analysis:                                                                      
                                                                                                                                
   · In 2004, helicopters flew about 258 hours; the cost to                                                                     
     DOF was about $649,000. The Guard was mobilized twice                                                                      
     in 2004 for a total of 50 days, the most they have been                                                                    
     used.                                                                                                                      
   · In 2002, the cost to the Division was $177,000.                                                                            
   · In 2007, the cost to the Division was $147,000.                                                                            
   · The funds come out of the activity component of the                                                                        
     Division budget.  The activity component is  funded as a                                                                   
     ten-year  average   each  year  and  currently   is  $13                                                                   
     million.   A  supplemental   request  during   the  fire                                                                   
     fighting season augments the account.                                                                                      
   · At the end of the year, there is a cross-billing with                                                                      
     the federal partners to sort out the actual funds owed                                                                     
     to each agency.                                                                                                            
                                                                                                                                
3:04:56 PM                                                                                                                    
                                                                                                                                
Representative   Hawker  wanted   to   see  the   information                                                                   
encapsulated  in  the  fiscal   note.  Mr.  Maisch  said  the                                                                   
information  had been  submitted in "DNR  Comments" (Copy  on                                                                   
File).                                                                                                                          
                                                                                                                                
Mr. Pierre said he could get the information for DMVA.                                                                          
                                                                                                                                
HB  326  was   HEARD  and  HELD  in  Committee   for  further                                                                   
consideration.                                                                                                                  
                                                                                                                                
3:08:14 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 3:08 PM.                                                                                           

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