Legislature(2007 - 2008)HOUSE FINANCE 519

04/08/2008 08:30 AM House FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ SB 202 PROHIBIT STATE SPENDING FOR REAL ID ACT TELECONFERENCED
<Bill Hearing Postponed to 1:30 Today>
+ SB 259 EFFECTIVE DATE: MEDICAL ASSISTANCE LAWS TELECONFERENCED
<Bill Hearing Postponed to 1:30 Today>
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= SB 254 AK REGIONAL ECONOMIC ASSISTANCE PROGRAM TELECONFERENCED
Heard & Held
+= SB 221 BUDGET: CAPITAL, SUPP. & OTHER APPROPS TELECONFERENCED
Heard & Held
                  HOUSE FINANCE COMMITTEE                                                                                       
                       April 8, 2008                                                                                            
                         8:51 a.m.                                                                                              
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Meyer called the House  Finance Committee meeting to                                                                   
order at 8:51:13 AM.                                                                                                          
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Mike Chenault, Co-Chair                                                                                          
Representative Kevin Meyer, Co-Chair                                                                                            
Representative Bill Stoltze, Vice-Chair                                                                                         
Representative Harry Crawford                                                                                                   
Representative Richard Foster                                                                                                   
Representative Les Gara                                                                                                         
Representative Mike Hawker                                                                                                      
Representative Reggie Joule                                                                                                     
Representative Mike Kelly                                                                                                       
Representative Bill Thomas, Jr.                                                                                                 
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Mary Nelson                                                                                                      
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Sharon Kelly, Staff, Co-Chair  Chenault; Pete Ecklund, Staff,                                                                   
Representative  Kevin  Meyer;  Bruce  Wallace;  Mark  Vinsel,                                                                   
Executive Director,  United Fishermen of Alaska  (UFA); Scott                                                                   
McAllister, Marketing  Chairman, United Fishermen  of Alaska;                                                                   
Jim  Stone,   President,  Alaska  Scallop   Association;  Bob                                                                   
Thorstenson, Juneau                                                                                                             
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Shawn  Dochtermann, Kodiak  Creman's Association,  Anchorage;                                                                   
Julie Kavanaugh,  Kodiak; Oliver Holm, Kodiak;  John Winther,                                                                   
Petersburg;  Max Hulse,  Eagle River;  Dick Tremaine,  Norton                                                                   
Sound  Economic Development  Corporation;  Theresa  Peterson,                                                                   
Kodiak; Kip Thomet, Kodiak; Pete  Hannan, Kodiak; Alan Parks,                                                                   
Homer;  Arnie  Thompson,  Executive   Director,  Alaska  Crab                                                                   
Coalition,  Executive  Member,  United Fisheries  of  Alaska;                                                                   
Dawson Hoover,  Coastal Village  Regions; Thomas  Gil Martin,                                                                   
Arctic  Storm; Mako  Haggerty,  Homer;  John Jones,  Chiknick                                                                   
Lagoon                                                                                                                          
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
CSSB 221(FIN) am                                                                                                                
          "An Act making and amending appropriations,                                                                           
          including capital appropriations, supplemental                                                                        
          appropriations,  and  appropriations to  capitalize                                                                   
          funds; and providing for an effective date."                                                                          
                                                                                                                                
          CSSB  221(FIN) am was  heard and HELD  in Committee                                                                   
          for further consideration.                                                                                            
                                                                                                                                
SB 254    "An  Act  extending  the termination  date  of  the                                                                   
          Alaska  regional economic  assistance program;  and                                                                   
          providing for an effective date."                                                                                     
                                                                                                                                
          SB 254 was heard and  HELD in Committee for further                                                                   
          consideration.                                                                                                        
                                                                                                                                
SB 259    "An  Act repealing certain  provisions relating  to                                                                   
          applications   for  medical  assistance   coverage;                                                                   
          making  certain  provisions of  ch.  96, SLA  2006,                                                                   
          retroactive;  providing  for an  effective date  by                                                                   
          repealing an effective  date section in ch. 96, SLA                                                                   
          2006; providing  for an effective date  for certain                                                                   
          sections of ch. 96,  SLA 2006; and providing for an                                                                   
          effective date."                                                                                                      
                                                                                                                                
          SB 259 was scheduled but not heard.                                                                                   
                                                                                                                                
SB 202    "An Act  relating to expenditures  in aid of  or to                                                                   
          implement  the provisions  of the  federal Real  ID                                                                   
          Act."                                                                                                                 
                                                                                                                                
          SB 202 was scheduled but not heard.                                                                                   
                                                                                                                                
8:52:14 AM                                                                                                                    
                                                                                                                                
CS FOR SENATE BILL NO. 221(FIN) am                                                                                            
                                                                                                                                
     "An Act  making and  amending appropriations,  including                                                                   
     capital  appropriations,   supplemental  appropriations,                                                                   
     and appropriations  to capitalize  funds; and  providing                                                                   
     for an effective date."                                                                                                    
                                                                                                                                
Vice-Chair Stoltze MOVED to ADOPT  HCS CSSB 221(FIN), labeled                                                                   
25-GS2007\V,  Kane, 4/7/08  as the working  draft before  the                                                                   
committee.  There being NO OBJECTION, it was so ordered.                                                                        
                                                                                                                                
PETE ECKLUND,  STAFF, REPRESENTATIVE KEVIN MEYER,  noted that                                                                   
all  budget  items  previously  vetoed by  the  Governor  are                                                                   
included in this section.                                                                                                       
                                                                                                                                
Co-Chair  Meyer explained  how the  items were  ranked.   The                                                                   
primary  emphasis  in  this  version  of  the  bill  are  the                                                                   
additions made by House members.                                                                                                
                                                                                                                                
8:55:32 AM                                                                                                                    
                                                                                                                                
Representative  Thomas  asked how  it  would  be known  which                                                                   
projects were which.   Mr. Ecklund noted the bill  was a work                                                                   
in progress and an explanatory  section would be forthcoming.                                                                   
                                                                                                                                
8:56:22 AM                                                                                                                    
                                                                                                                                
SHARON  KELLY,   STAFF,  CO-CHAIR   CHENAULT,  reviewed   the                                                                   
supplemental operating  items added to the bill.   There were                                                                   
12 items added:   an increment for the Department  of Law for                                                                   
$1.4 million in Section 18; nine  items for the Department of                                                                   
Transportation and  Public Facilities, the majority  of which                                                                   
are requests for  increases for fuel, and one  decrement; one                                                                   
increment  for the University  of Alaska  that totals  $927.2                                                                   
which funds  the fuel request for  FY 08 at 100  percent; and                                                                   
in Section  16, intent  language  was added  to say that  the                                                                   
economic  stimulus  rebate  checks   issued  by  the  federal                                                                   
government  during 2008  will not  affect income  eligibility                                                                   
criteria for any state program.                                                                                                 
                                                                                                                                
Co-Chair Meyer reported that those  additions totaled about a                                                                   
$2 million increase.                                                                                                            
                                                                                                                                
Vice-Chair  Stoltze said  it  was confusing  which  districts                                                                   
each item belongs  to.  Co-Chair Meyer said  that information                                                                   
would be included.                                                                                                              
                                                                                                                                
CSSB  221  (FIN) am  was  heard  and  HELD in  Committee  for                                                                   
further consideration.                                                                                                          
                                                                                                                                
AT-EASE:       8:58:56 AM                                                                                                     
                                                                                                                                
RECONVENED:    9:00:12 AM                                                                                                     
                                                                                                                                
SENATE BILL NO. 254                                                                                                           
                                                                                                                                
     "An Act extending the termination date of the Alaska                                                                       
     regional economic assistance program; and providing for                                                                    
     an effective date."                                                                                                        
                                                                                                                                
Vice-Chair  Stoltze   MOVED  to  RESCIND  the   action  taken                                                                   
previously  to report  HCS SB  254(FIN) out  of Committee  on                                                                   
April 6.  There being NO OBJECTION, it was so ordered.                                                                          
                                                                                                                                
9:02:14 AM                                                                                                                    
                                                                                                                                
BRUCE WALLACE,  JUNEAU, testified  that the bill  would allow                                                                   
fisheries  of limited  size  to go  forward  in a  controlled                                                                   
manner and is critical in limiting  the size of the by catch.                                                                   
He testified  in support  of the  bill because  of those  two                                                                   
components.                                                                                                                     
                                                                                                                                
Representative  Kelly  asked  if  he  was  in  favor  of  the                                                                   
amendment.  Mr. Wallace said yes.                                                                                               
                                                                                                                                
9:05:09 AM                                                                                                                    
                                                                                                                                
MARK VINSEL,  EXECUTIVE DIRECTOR, UNITED FISHERMAN  OF ALASKA                                                                   
(UFA), testified  in support of  the amendment to  extend the                                                                   
termination  date of  the Korean  Hair  Crab and  Weathervane                                                                   
Scallop  fisheries, which  have  proven to  be successful  in                                                                   
staying within by  catch limits.  He emphasized that  it is a                                                                   
vessel-based  commercial  fishery and  UFA  does not  support                                                                   
that method for any other fishery.   Vice-Chair Stoltze asked                                                                   
if  the  issue  was  contentious  within  UFA.    Mr.  Vinsel                                                                   
reported that there was wide support.                                                                                           
                                                                                                                                
9:06:25 AM                                                                                                                    
                                                                                                                                
SCOTT  MCALLISTER,  MARKETING   CHAIR,  UNITED  FISHERMAN  OF                                                                   
ALASKA, spoke to the importance  of the sustainability of the                                                                   
industry.  He stated support for  the amendment and wished to                                                                   
see the sunset eliminated.                                                                                                      
                                                                                                                                
Vice-Chair Stoltze asked if Mr.  McAllister wanted to see the                                                                   
program  continued  permanently.    Mr.  McAllister  said  he                                                                   
would.   Vice-Chair Stoltze  commented  on the importance  of                                                                   
sustainability.                                                                                                                 
                                                                                                                                
9:08:51 AM                                                                                                                    
                                                                                                                                
JIM STONE, PRESIDENT, ALASKA SCALLOP  ASSOCIATION, thought at                                                                   
issue was the question of corporate  ownership.  He read from                                                                   
testimony about  the positives of fishermen  working together                                                                   
to target  quotas and reduce by  catch.  He pointed  out that                                                                   
the Department of  Fish and Game supports the  amendment.  He                                                                   
testified  in support of  the sunset  date being extended  in                                                                   
this  bill.    He  dispelled   the  misconception  about  the                                                                   
industry not  paying taxes.   He defended the  Alaska Scallop                                                                   
Association.  He testified in support of the bill.                                                                              
                                                                                                                                
Representative   Foster   asked   who   was   attacking   the                                                                   
Association.   Mr. Stone explained  that the attack  would be                                                                   
if they would lose the ability  to prosecute the fishery in a                                                                   
responsible manner.                                                                                                             
                                                                                                                                
9:11:30 AM                                                                                                                    
                                                                                                                                
BOB THORSTENSON,  JUNEAU, testified  in support of  the bill.                                                                   
He spoke  against  extinguishing this  limited entry  system.                                                                   
He spoke  to the 17,500  of Alaskans that  are a part  of the                                                                   
two  fisheries.    It  is a  larger  number  than  all  other                                                                   
fisheries combined.   He said there have been  no court cases                                                                   
regarding the two fisheries since  the legislation was passed                                                                   
in 2002.   He noted all of  the court cases related  to other                                                                   
fisheries.                                                                                                                      
                                                                                                                                
Mr.  Thorstenson discussed  the introduction  of a  companion                                                                   
Senate bill.   He maintained that limited entry  was the most                                                                   
effective  method  for  fisheries.   He  shared  tax  revenue                                                                   
information from the fisheries.                                                                                                 
                                                                                                                                
Vice-Chair  Stoltze asked  if other  limited entry  fisheries                                                                   
should  be abolished.   Mr.  Thorstenson replied  no.   Vice-                                                                   
Chair  Stoltze thought  the corporate  entity definition  was                                                                   
misleading.   Mr.  Thorstenson  explained the  makeup of  the                                                                   
corporations.                                                                                                                   
                                                                                                                                
9:18:16 AM                                                                                                                    
                                                                                                                                
SHAWN  DOCHTERMANN,  KODIAK  CREWMAN'S  ASSOCIATION,  KODIAK,                                                                   
related his experience with fisheries.   He testified against                                                                   
the  vessel-based limited  entry  portion of  the  bill.   He                                                                   
believed that  the bill opens  the door for commercial  entry                                                                   
fishery permits  to be owned  by corporations, instead  of by                                                                   
actual  persons.     He  questioned  the  number   of  vessel                                                                   
participants.  He  spoke of the work on SB 113  to change the                                                                   
constitution.  He testified in opposition to SB 254.                                                                            
                                                                                                                                
9:20:34 AM                                                                                                                    
                                                                                                                                
JULIE KAVANAUGH, KODIAK, spoke  to the original intent of the                                                                   
bill.   She maintained that  inserting the amendment  was not                                                                   
appropriate.  The  original intent of the bill  was to extend                                                                   
the  Alaska   Regional  Economic  Development   Organizations                                                                   
(ARDORS)  program, which  is unrelated  to  the vessel  based                                                                   
permit system.   She shared the history of the  hair crab and                                                                   
scallop  fisheries and  the adverse affects  this bill  would                                                                   
have.  She detailed the negative effects of the bill.                                                                           
                                                                                                                                
9:25:01 AM                                                                                                                    
                                                                                                                                
OLIVER HOLM, KODIAK,  testified against the inclusion  of the                                                                   
amendment  in  the bill.    He maintained  that  vessel-based                                                                   
limited entry  is not  needed for  conservation reasons.   He                                                                   
commented  that  this  legislation  is an  attempt  to  allow                                                                   
corporate ownership of fisheries, which he opposes.                                                                             
                                                                                                                                
9:27:37 AM                                                                                                                    
                                                                                                                                
MAX  HULSE,  EAGLE   RIVER,  testified  in  support   of  the                                                                   
amendment to  SB 221.  He  shared his family's  experience in                                                                   
scallop  fisheries and  requested that  permits not  be taken                                                                   
away.                                                                                                                           
                                                                                                                                
9:29:24 AM                                                                                                                    
                                                                                                                                
JOHN WINTHER,  PETERSBURG, related  his experience as  a hair                                                                   
crab  fisher and  his  work on  the original  legislation  in                                                                   
2005.  He testified  in support of the amendment  and for the                                                                   
removal of the sunset clause.                                                                                                   
                                                                                                                                
Vice-Chair Stoltze  asked for  comments on the  importance of                                                                   
sustainability.  Mr. Winther said  he has worked very hard to                                                                   
get  name   recognition,  limited   entry,  and   sustainable                                                                   
fisheries in Alaska.   Vice-Chair Stoltze asked  if this idea                                                                   
could be  carried over  to the salmon  fishery.   Mr. Winther                                                                   
said it could.                                                                                                                  
                                                                                                                                
9:33:25 AM                                                                                                                    
                                                                                                                                
DICK    TREMAINE,   NORTON    SOUND   ECONOMIC    DEVELOPMENT                                                                   
CORPORATION,  said he  represents  the Community  Development                                                                   
Quota  (CDQ) element  that owns  two permits.   He  explained                                                                   
that  these are  fisheries that  occur  primarily in  federal                                                                   
waters.  He  maintained that the owners  are corporate-owned.                                                                   
He advocated for maintaining the current entry system.                                                                          
                                                                                                                                
Representative  Hawker  asked  for  assurance  that  the  CDQ                                                                   
program benefits the whole state.   Mr. Tremaine replied that                                                                   
they pumped dollars and services back to the state.                                                                             
                                                                                                                                
9:37:17 AM                                                                                                                    
                                                                                                                                
Representative  Hawker asked if  the CDQ program  is working.                                                                   
Mr. Tremaine said  that the CDQ program is unique  in that it                                                                   
takes  a public  resource and  subsidizes  communities at  no                                                                   
cost to taxpayers.  It is working very well.                                                                                    
                                                                                                                                
9:38:30 AM                                                                                                                    
                                                                                                                                
THERESA PETERSON, KODIAK, testified  against the inclusion of                                                                   
the language which  would allow vessels to own  permits.  She                                                                   
thought it would erode the limited  entry system intent.  She                                                                   
encouraged the vessel  owners to work together  to figure out                                                                   
a way  to  manage the  fishery and  keep the  permits in  the                                                                   
names of the people fishing.                                                                                                    
                                                                                                                                
KIP  THOMET,  KODIAK,  testified  against  inclusion  of  the                                                                   
amendment  in the  bill.   He wanted  permits to  be held  by                                                                   
active fishermen  and not individuals or entities  that could                                                                   
exploit fishermen, as the legislation originally intended.                                                                      
                                                                                                                                
9:43:30 AM                                                                                                                    
                                                                                                                                
PETE  HANNAN,   KODIAK,  testified   against  including   the                                                                   
amendment in  the bill.   He requested  more time  for public                                                                   
comment.  He  maintained that competition is  healthy for the                                                                   
industry.                                                                                                                       
                                                                                                                                
9:44:54 AM                                                                                                                    
                                                                                                                                
ALAN  PARKS,  HOMER,  voiced concern  about  the  process  of                                                                   
inserting the  language in the  bill and not  allowing enough                                                                   
time for public testimony.  He  testified against the vessel-                                                                   
based limited  entry system.   He  thought all other  limited                                                                   
entry system were  in compliance with the Limited  Entry Act.                                                                   
He spoke to  a good record for progressive  consumers and the                                                                   
process of dredging for scallops.                                                                                               
                                                                                                                                
9:47:45 AM                                                                                                                    
                                                                                                                                
ARNIE THOMPSON,  EXECUTIVE DIRECTOR,  ALASKA CRAB  COALITION,                                                                   
EXECUTIVE  MEMBER, UNITED  FISHERIES  OF  ALASKA, shared  the                                                                   
history of  crab and scallop  closure areas and  the limiting                                                                   
of vessel-based  licensing.  He maintained that  the industry                                                                   
has been sustainable.   He agreed with Mr.  Winther regarding                                                                   
the need  for a  vessel-based license  program for  both crab                                                                   
and scallop fisheries.                                                                                                          
                                                                                                                                
9:52:07 AM                                                                                                                    
                                                                                                                                
DAWSON HOOVER, COASTAL VILLAGE  REGIONS, testified in support                                                                   
of maintaining  CDQ programs.  The vessel  limitation program                                                                   
is working.                                                                                                                     
                                                                                                                                
9:53:55 AM                                                                                                                    
                                                                                                                                
THOMAS  GIL  MARTIN,  ARCTIC  STORM,  testified  against  the                                                                   
amendment to SB 254.  He shared  his experience with owning a                                                                   
scallop fishery.   He related  the history of  the fisheries.                                                                   
He suggested going  to open access and making  rules to favor                                                                   
the small operators.                                                                                                            
                                                                                                                                
9:56:59 AM                                                                                                                    
                                                                                                                                
Representative  Gara asked  how the current  system  made the                                                                   
fishery too  expensive to fish.   Mr. Martin related  how the                                                                   
observer  charges a $20,000  deposit  which priced the  small                                                                   
boat out  of business.   The  observer program  did not  work                                                                   
well.    The  state  declared  that a  scallop  vessel  is  a                                                                   
processor which required additional costs.                                                                                      
                                                                                                                                
9:59:44 AM                                                                                                                    
                                                                                                                                
MAKO  HAGGERTY,   HOMER,  explained  that  he   is  a  former                                                                   
fisherman  due to  the type of  program being  proposed.   He                                                                   
urged the Committee to research  the impact of fishery plans.                                                                   
He stated  opposition to  the method  the Committee  is using                                                                   
regarding this bill.  He testified against the amendment.                                                                       
                                                                                                                                
Representative  Thomas asked which  fishery he  was in.   Mr.                                                                   
Haggerty said  halibut and black cod.   Representative Thomas                                                                   
agreed  with the  problems of  fishermen,  based on  personal                                                                   
experience.                                                                                                                     
                                                                                                                                
10:02:35 AM                                                                                                                   
                                                                                                                                
JOHN JONES,  CHIKNICK LAGOON,  asked for clarification  about                                                                   
the  bill.   Vice-Chair  Stoltze  related  that the  bill  is                                                                   
trying to extend an existing permit.   Mr. Jones thought that                                                                   
corporations  should not  be allowed  to  own a  permit.   He                                                                   
testified against the amendment in SB 254.                                                                                      
                                                                                                                                
SB 254 was heard and HELD in Committee for further                                                                              
consideration.                                                                                                                  
                                                                                                                                
SENATE BILL NO. 259                                                                                                           
                                                                                                                                
     "An  Act   repealing  certain  provisions   relating  to                                                                   
     applications  for  medical assistance  coverage;  making                                                                   
     certain  provisions of  ch. 96,  SLA 2006,  retroactive;                                                                   
     providing  for   an  effective  date  by   repealing  an                                                                   
     effective  date section in  ch. 96, SLA 2006;  providing                                                                   
     for an  effective date for  certain sections of  ch. 96,                                                                   
     SLA 2006; and providing for an effective date."                                                                            
                                                                                                                                
SB 259 was scheduled but not heard.                                                                                             
                                                                                                                                
SENATE BILL NO. 202                                                                                                           
                                                                                                                                
     "An  Act  relating  to  expenditures  in aid  of  or  to                                                                   
     implement the provisions of the federal Real ID Act."                                                                      
                                                                                                                                
SB 202 was scheduled but not heard.                                                                                             
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 10:05 AM.                                                                                          
                                                                                                                                
                                                                                                                                

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