Legislature(1997 - 1998)

04/17/1997 08:15 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                                                                               
                     HOUSE FINANCE COMMITTEE                                   
                         APRIL 17, 1997                                        
                            8:15 A.M.                                          
                                                                               
  TAPE HFC 97 - 102, Side 1, #000 - end.                                       
  TAPE HFC 97 - 102, Side 2, #000 - end.                                       
  TAPE HFC 97 - 103, Side 1, #000 - #347.                                      
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Co-Chair Gene Therriault called the House Finance  Committee                 
  meeting to order at 8:15 A.M.                                                
                                                                               
  PRESENT                                                                      
                                                                               
  Co-Chair Hanley               Representative Kelly                           
  Co-Chair Therriault           Representative Kohring                         
  Representative Davies         Representative Martin                          
  Representative Davis          Representative Moses                           
  Representative Foster         Representative Mulder                          
  Representative Grussendorf                                                   
                                                                               
  ALSO PRESENT                                                                 
                                                                               
  Representative  Joe  Green;  Representative Alan  Austerman;                 
  Jeff  Logan,   Staff,  Representative   Joe  Green;   Steven                 
  Daugherty, Assistant  Attorney General, Board  of Fisheries,                 
  Department   of   Law;   Karl    Borglum,   (Testified   via                 
  teleconference),  Mat-Su  Borough,  Mat-Su;  Michael  Gatti,                 
  (Testified  via teleconference),  Mat-Su Borough  Attorney ,                 
  Mat-Su;   Larry   Engel,  (Testified   via  teleconference),                 
  Fisheries  Board, Mat-Su;  Donald  Westlund, (Testified  via                 
  teleconference),  Ketchikan;  Kevin Delaney,  (Testified via                 
  teleconference), Department of Fish and Game, Anchorage; Dan                 
  Coffey, (Testified via teleconference), Attorney, Anchorage;                 
  Cynthia Klepaski, (Testified via  teleconference), Assistant                 
  Borough Attorney, Fairbanks  North Star Borough,  Fairbanks;                 
  John  Goodhand,  (Testified via  teleconference), Governor's                 
  Task   Force,   Anchorage;   Dave  Heier,   (Testified   via                 
  teleconference),  Anchorage;  Alan LeMaster,  (Testified via                 
  teleconference),   Gakona;   Pat  Carlson,   (Testified  via                 
  teleconference), Assessor, Kodiak.                                           
                                                                               
  SUMMARY                                                                      
                                                                               
  HB 19     An  Act relating  to  licensing of  sport  fishing                 
            services   operators   and  fishing   guides;  and                 
            providing for an effective date.                                   
                                                                               
            HB   19  was   HELD  in   Committee   for  further                 
            consideration.                                                     
                                                                               
                                                                               
                                1                                              
                                                                               
                                                                               
  HB 94     An  Act  relating  to  confidentiality of  certain                 
            municipal tax records.                                             
                                                                               
            HB   94   was   placed   into  Subcommittee   with                 
            Representative  G.  Davis-Chair  and with  members                 
            Representative   Mulder   and   Representative  J.                 
            Davies.                                                            
  HOUSE BILL 94                                                                
                                                                               
       "An  Act   relating  to   confidentiality  of   certain                 
       municipal tax records."                                                 
                                                                               
  JEFF LOGAN, STAFF,  REPRESENTATIVE JOE GREEN, noted  that HB
  94  would   allow  local  governments  to  classify  certain                 
  financial information submitted as confidential if requested                 
  to do so by the taxpayer.                                                    
                                                                               
  Under State law,  income information submitted to  the State                 
  by the taxpayer as part of  a tax return or report would  be                 
  held  confidential.    AS  43.05.230 prohibits  officers  or                 
  agents of the State from disclosing the "amount of income or                 
  the particulars" listed in a return.  However, when the same                 
  or similar information  is submitted  to a local  government                 
  for  the  purposes of  a tax  assessment,  there is  no such                 
  protection.   HB 94 would  extend the protection  for income                 
  information   submitted  to   the  State  to   also  protect                 
  information submitted to local governments.                                  
                                                                               
  Mr. Logan continued, HB 94 would not change, alter, amend or                 
  in any way restrict the authority that local government  has                 
  to assess  a tax.   It simply  says that once  the financial                 
  information is provided  to the  local taxing authority,  it                 
  must  be  held confidential  if  the taxpayer  makes  such a                 
  request.                                                                     
                                                                               
  Mr.  Logan commented, following  discussion on  the proposed                 
  legislation with borough assessors throughout the State, the                 
  sponsor submitted a work draft, #0-LS0419\F, Cook,  4/16/97,                 
  to be the  version for the  Committee's consideration.   The                 
  previous versions include civil penalties for the release of                 
  confidential    information.        Upon    the    assessors                 
  recommendation,  that  information  was   deleted  from  the                 
  proposed committee substitute.  He  added, the penalties for                 
  the release of information could be found in AS 11.56.860.                   
                                                                               
  Mr. Logan summarized the intent  of the proposed legislation                 
  which clarifies  when a  taxpayer submits  information to  a                 
  local  government  for  the  purposes   of  a  property  tax                 
  assessment, the information related to the earnings, income,                 
  profit, losses or expenditures of that taxpayer must be held                 
  confidential should the taxpayer make a written request.                     
                                                                               
                                2                                              
                                                                               
                                                                               
  Mr.  Logan   commented  that   following  discussions   with                 
  statewide   assessors   and    the   legislative    drafter,                 
  Representative  Green  had   attempted  to  determine   what                 
  information would justify confidentiality, those items which                 
  we would not want other competitors to see.                                  
                                                                               
  Representative  J. Davies  suggested  current language,  "is                 
  acquired",  was too broad.   Mr. Logan  replied that current                 
  language would  be  the  default which  would  result  in  a                 
  penalty of a Class A misdemeanor.                                            
                                                                               
  Co-Chair  Hanley  asked  if the  "valuation"  would  be kept                 
  confidential.  Mr. Logan stated  that determination would be                 
  public information.   Representative  J. Davies pointed  out                 
  that  information  from  the appeal  process  would  also be                 
  confidential.   Mr. Logan  advised that  had been  discussed                 
  with the drafter, Ms. Cook  from Legislative Legal Services.                 
  The  State does provide some  confidentiality if a tax payer                 
  has a tax assessment which  they challenge; that information                 
  is held tightly.  He believed that it would be fair  for the                 
  taxpayers to have the same privilege.                                        
                                                                               
  Representative  J.  Davies  agreed that  should  be  true in                 
  practice, although,  only the administrative  step had  been                 
  undertaken.  He believed that would not work in the judicial                 
  step.    The  first  Statute   includes  both  judicial  and                 
  administrative steps not requiring the State's involvement.                  
                                                                               
  Representative  G.  Davis  asked  how  widely  the  proposed                 
  approach  would be  used.  Mr.  Logan understood  that there                 
  were three basic approaches to the valuation of property:                    
                                                                               
       1.   The market approach  determined on the  value                      
            of the neighborhood property;                                      
                                                                               
       2.   Replacement approach; and                                          
                                                                               
       3.   Income approach based on how much income  the                      
            property generates.                                                
                                                                               
  KARL  BORGLUM,  (TESTIFIED  VIA  TELECONFERENCE),  ASSESSOR,                 
  MATSU  BOROUGH, MAT-SU,  voiced  concern  that  the  initial                 
  language  was so  broad  that it  would  include any  entity                 
  beyond  the  mining community.    Once the  information goes                 
  before  the Board of Equalization  (BOE), it would no longer                 
  be confidential.                                                             
                                                                               
  Co-Chair  Therriault  asked the  number of  assessments that                 
  address  financial information.   Mr.  Borglum  replied that                 
  income  information   was  mostly  relative   to  commercial                 
  buildings and the income  that they can expect  to generate.                 
                                                                               
                                3                                              
                                                                               
                                                                               
  The information  would not  be applicable  to single  family                 
  housing.                                                                     
                                                                               
  Representative  G.  Davis  questioned   owners  response  to                 
  documents when declassification occurs.  Mr. Borglum replied                 
  that he has  never experienced a situation  in which someone                 
  appealed the  confidential information  process.   Although,                 
  there have been circumstances when the person has not wanted                 
  their information made public.                                               
                                                                               
  Representative J. Davies asked if a person sold their house,                 
  would  that  income be  construed  as income  and/or profits                 
  under this  section.  Mr. Borglum replied  that when dealing                 
  with  a  company   whose  business   includes  real   estate                 
  investment, that information could easily be construed to be                 
  earnings,  income  profits/losses  or   expenditures.    The                 
  acquisition of the property could  fall under information of                 
  the  bill.  He  noted concern with  the manner  in which the                 
  assessor acquires information.                                               
                                                                               
  MICHAEL GATTI, (TESTIFIED VIA TELECONFERENCE), MATSU BOROUGH                 
  ATTORNEY, MAT-SU, commented on the proposed legislation.  He                 
  explained  that  the  Board  of  Equalization  was  a  board                 
  consisting of professional individuals  who are charged with                 
  deliberating fairly on challenged  assessments.  Information                 
  submitted to the Board is open to the public.                                
                                                                               
  He  continued,  one   of  the   most  important   principles                 
  underlining  State  government,  AS  44.62.312,  is  titled:                 
  "State policy  regarding  meetings".   That policy  requires                 
  open   deliberation   for   people   invoking  the   Board's                 
  jurisdiction.   Mr. Gatti  submitted that  such a  procedure                 
  should  be  the policy  of the  State.   In  addition, there                 
  exists  a  strong   public  record  policy,  listed   in  AS                 
  09.25.110.  The Alaska Supreme Court has been  protective of                 
  the  public's right  to receive  those  public records.   It                 
  would not be in  the public's best interest to  increase the                 
  number of records which are confidential, particularly, when                 
  harsh   criminal   penalties   are   associated   with   the                 
  distribution.  He urged that the legislation have the  scope                 
  reworked.                                                                    
                                                                               
  Mr. Gatti added,  the proposed legislation would  be another                 
  "unfunded" mandate burden placed on the local boroughs.   He                 
  suggested  that passage of the bill would increase the costs                 
  of  the assessor  in bringing  matters before  the  Board of                 
  Equalization.  No more revenue exists to pay those costs.                    
                                                                               
  CYNTHIA  KLEPASKI,  ASSISTANT  BOROUGH  ATTORNEY,  FAIRBANKS                 
  NORTH  STAR BOROUGH,  FAIRBANKS, stated  that  the Fairbanks                 
  North Star  Borough is  not against  the confidentiality  of                 
  information.  There are good reasons  to provide a degree of                 
                                                                               
                                4                                              
                                                                               
                                                                               
  confidentiality of  records provided  to tax  payers at  the                 
  assessors request.  However, she stated,  the scope of HB 94                 
  is overly  broad  and the  bill  would severely  impact  the                 
  proceedings of the Board of Equalization.                                    
                                                                               
  HB  94  would  prohibit  disclosure   of  a  wide  range  of                 
  information acquired from any source.   The bill would add a                 
  new subsection (c) to statute.  That language is interpreted                 
  that the source  of the information  is public, even if  the                 
  taxpayer   provided   the   information   voluntarily,   the                 
  information becomes  confidential when the  assessor has it.                 
  She stated that there  is no reason to require  the assessor                 
  to keep the information confidential.                                        
                                                                               
  Ms. Klepaski added that HB  94 would severely impact appeals                 
  to  the  Board   of  Equalization  (BOE)  and   the  courts.                 
  Subsection (c) would add material which would require BOE to                 
  hold executive sessions to consider  whatever is relevant to                 
  the assessed value of the property.  She asked how would the                 
  BOE be able  to make  findings and decisions,  or the  court                 
  determine whether there is substantial  evidence to support.                 
                                                                               
                                                                               
  There  are   legitimate  public  policy  reasons   to  waive                 
  confidentiality  provisions  in   appeals.    Property   tax                 
  assessment procedures are generally public because  property                 
  valuation  for assessment purposes requires a just valuation                 
  of all property.   The assessment must have a  fair relation                 
  to a uniform and equal rate of taxation.   If the procedures                 
  and  records  involved in  property  tax assessment  are not                 
  public, taxpayers will  not be able  to determine whether  a                 
  particular property is fairly valued  in comparison to other                 
  properties.                                                                  
                                                                               
  Ms. Klepaski concluded  that similar  income information  is                 
  produced as a matter  of course in  other litigation.  If  a                 
  person  or entity files a  lawsuit, or a property assessment                 
  appeal,  the   relevant  records   must  be   subjected  for                 
  disclosure.                                                                  
                                                                               
  Co-Chair  Therriault asked  if a dis-interested  third party                 
  could  appeal  a  business' tax  assessment.    Ms. Klepaski                 
  stated that they  would not be  able to.   She added that  a                 
  third party could attend a BOD meeting, although, they could                 
  not  participate  unless requested.    A process  for public                 
  comment is not included.                                                     
                                                                               
  (Tape Change HFC 97-102, Side 2).                                            
                                                                               
  PAT  CARLSON,  (TESTIFIED  VIA   TELECONFERENCE),  ASSESSOR,                 
  KODIAK, spoke to the defined narrowness of the document.  In                 
  order  to   address  these   concerns,  he   suggested  that                 
                                                                               
                                5                                              
                                                                               
                                                                               
  information should  be "requested" rather than "required" by                 
  the  assessor.   The  Board  of Equalization  process should                 
  remain open and public,  agreeing that a need does  exist to                 
  have confidential  information on  a municipal  level.   Co-                 
  Chair  Therriault  requested  that Mr.  Carlson  fax  to the                 
  Committee his suggested language.                                            
                                                                               
  DAVE HEIER,  (TESTIFIED  VIA  TELECONFERENCE),  NORTH  SLOPE                 
  BOROUGH, ANCHORAGE, stated that a problem currently does not                 
  exist.    He  questioned  why   the  legislation  was  being                 
  discussed  when it  had been  requested by  only one  mining                 
  interest.  He reiterated that  his association has requested                 
  information regarding the current problems  and that to date                 
  they have received no word.                                                  
                                                                               
  If the legislation  is passed,  it would  be important  that                 
  confidentiality not be carried out to the level of the Board                 
  of Equalization.   He  summarized, open  government is  good                 
  government and is supported by tax payers.                                   
                                                                               
  Co-Chair Therriault  noted  that HB  94 would  be placed  in                 
  Subcommittee with Representative G. Davis  as Chair and with                 
  members Representative Mulder and Representative J.  Davies.                 
  Co-Chair Therriault  stated that  the language  needs to  be                 
  tightened up with regards to  what information covered would                 
  be confidential, clarifying  what the default would  be, how                 
  the information  would be  reviewed on  appeal, whether  the                 
  taxpayer would be required to  waive confidentiality if they                 
  chose to go  to the BOE or it  not, and how the  court would                 
  have access to review the information.                                       
                                                                               
  HB 94 was HELD in Committee for further discussion.                          
  HOUSE BILL 19                                                                
                                                                               
       "An Act relating to licensing of sport fishing services                 
       operators and  fishing  guides; and  providing  for  an                 
       effective date."                                                        
                                                                               
  REPRESENTATIVE ALAN AUSTERMAN stated that licensing of sport                 
  fishing is  an  important  and  rapidly  growing  commercial                 
  industry in the Alaska economy.  The ability of the State to                 
  provide  for   the  sustainable  development  and  a  sound,                 
  sensible management  of  our fishery  resource is  dependent                 
  upon the availability of complete  information from which to                 
  base decisions.                                                              
                                                                               
  He noted that there is lack  of data available regarding the                 
  commercial guided sport  fishery in  Alaska.  Currently,  no                 
  uniform licensing procedure for sport  fish guides exists in                 
  Alaska.  Registration  of the guides themselves  is required                 
  on a few rivers,  but not everywhere.  Thus, we  do not have                 
                                                                               
                                6                                              
                                                                               
                                                                               
  complete  information  about  who  is  actively  engaged  in                 
  commercial sport fish guiding, how  many clients are served,                 
  what the  catch  rates are,  and  what rivers,  streams  and                 
  marine waters are being utilized.                                            
                                                                               
  Representative Austerman pointed out that Section 1 of HB 19                 
  would include "the  sport fishing  services industry"  under                 
  the authorities  of the Board  of Fisheries, "as  needed for                 
  the conservation, development and utilization of fisheries".                 
  Inclusion  of  that  language,  gives  the  Board  the  same                 
  regulatory authority  with guide business  operators that it                 
  currently  has with  the  commercial,  sport, guided  sport,                 
  subsistence and personal  use fishing.  The  "guided sport",                 
  currently,  in   existing   statute   has   been   generally                 
  interpreted to limit the  Board's regulatory authority  over                 
  exclusively guided anglers.                                                  
                                                                               
  Representative Austerman continued, HB 19 would establish in                 
  statute,  a  sport fish  guide  licensing program  and would                 
  require the  Alaska Department of  Fish and Game  to collect                 
  the needed  information for  a period  of three  years.   It                 
  would not impose any limitations on  the number of guides or                 
  vessels in the State,  nor would it affect their  activities                 
  other than having  to report  and carry that  documentation.                 
  The  cost   of  licensing,  data   gathering,  analysis  and                 
  enforcement would be  funded by the revenues  generated from                 
  the license  fees.   The  program  would be  fiscally  self-                 
  sustaining.                                                                  
                                                                               
  Representative  Austerman provided  a sectional  analysis of                 
  the proposed legislation  indicating how it would  relate to                 
  the proposed amendment.  He noted that new language had been                 
  added, following a  determination by the attorney  for Board                 
  of Fish and the Attorney General's  office that the Board of                 
  Fish  does not  have  the authority  to regulate  the guided                 
  sport industry.  It had been  assumed that they carried that                 
  authority.   The new  language addresses  that concern.   He                 
  elaborated  that the  amendment  provided by  Representative                 
  Mulder removes the new language.  [Copy on file].                            
                                                                               
  LARRY  ENGEL,  (TESTIFIED  VIA  TELECONFERENCE),  BOARD   OF                 
  FISHERIES,  MAT-SU,  explained  that  the  Alaska  Board  of                 
  Fisheries supports the legislation.  Both  the Board and the                 
  task force believe that a  comprehensive licensing system is                 
  needed  to better define the diverse industry.  The proposed                 
  licensing system provides  needed definitions for  companies                 
  and  individuals   who  provide   sport  fishing,   guiding,                 
  chartering,   and  outfitting   services.     Through   such                 
  definitions, it is hoped that the industry can be more fully                 
  identified and organized.  He added, it is believed that the                 
  definitions  will close  loopholes  in current  definitions,                 
  thereby, providing a  level playing  field for the  industry                 
                                                                               
                                7                                              
                                                                               
                                                                               
  and  for  better  enforcement of  regulations  pertaining to                 
  sport fishing guides and charters.                                           
                                                                               
  Mr.  Engel  acknowledged  that   a  comprehensive  licensing                 
  program will  add stability  to this  economically important                 
  industry which supports many jobs throughout Alaska.                         
                                                                               
  Representative Mulder commented that he supported  licensing                 
  guides, but had misgivings with  the broad regulatory powers                 
  bestowed upon the  Board.   He questioned why  the Board  of                 
  Fisheries was  taking such a  pro-active stance.   Mr. Engel                 
  replied that the Board of Fisheries has embraced the concept                 
  of the legislation.  The Board wants to know  who the guides                 
  are and  how they  run their business.   At  this time,  the                 
  guides only need to  register.  He reiterated that  there is                 
  no  accountability and no  licensing.  Representative Mulder                 
  questioned  at  what point  does  the board  become punitive                 
  toward the guides.                                                           
                                                                               
  Co-Chair Hanley asked  who was  responsible for setting  the                 
  limitation for guides on the Kenai  River.  Mr. Engel stated                 
  that the requirements are established by the Alaska Board of                 
  Fisheries.  Co-Chair Hanley questioned the net effect if the                 
  language was deleted  as proposed in Amendment  #1. [Copy on                 
  file].                                                                       
                                                                               
  KEVIN  DELANEY,  (TESTIFIED  VIA TELECONFERENCE),  DIRECTOR,                 
  DIVISION  OF  SPORT  FISH,  DEPARTMENT  OF  FISH  AND  GAME,                 
  ANCHORAGE, voiced support for the  proposed legislation.  He                 
  noted that  sport fish  guiding is  a critical  link in  the                 
  State's natural resource based economy.   Sport fish guiding                 
  activities have increased  across all regions of  the State.                 
  With  this  growth has  come  increased concern  for fishery                 
  resources and the  quality of the sport  fishing experience.                 
  HB 19 would  provide for  definition of statutory  reporting                 
  requirements and penalties for noncompliance.  If adopted by                 
  law, the legislation  would acknowledge  this industry as  a                 
  profession which utilizes the  State's fishery resources and                 
  would create a framework for the industry in the future.                     
                                                                               
  JOHN  GLASS,  (TESTIFIED   VIA  TELECONFERENCE),   DIRECTOR,                 
  DIVISION OF FISH AND WILDLIFE  PROTECTION, ANCHORAGE, stated                 
  that the Division  of Fish and Wildlife  Protection endorses                 
  passage of the proposed legislation.                                         
                                                                               
  JOHN  GOODHAND,  (TESTIFIED   VIA  TELECONFERENCE),   VALDEZ                 
  CHARTER  BOAT ASSOCIATION,  TASK  FORCE  FOR GUIDE  CHARTER,                 
  VALDEZ, agreed that  the proposed legislation  would provide                 
  accountability for all guides.                                               
                                                                               
  (Tape Change HFC 97-103, Side 1).                                            
                                                                               
                                                                               
                                8                                              
                                                                               
                                                                               
  Mr. Goodhand continued,  the proposed  legislation is not  a                 
  limited  entry  program.   He  referenced  the  large growth                 
  within the industry.                                                         
                                                                               
  DAN  COFFEY,  (TESTIFIED   VIA  TELECONFERENCE),   ATTORNEY,                 
  SUBCOMMITTEE,  BOARD OF FISHERIES, ANCHORAGE, noted that the                 
  Board formally supports the proposed  legislation because of                 
  the substantial growth  in the  guided fishery industry  and                 
  the  difficulties the Board  has experienced  resulting from                 
  that growth.   The  Board believes  that the legislation  is                 
  appropriate and necessary.                                                   
                                                                               
  ALAN  LEMASTER,  (TESTIFIED  VIA   TELECONFERENCE),  GAKONA,                 
  voiced his concerns with the  proposed fees.  Representative                 
  Austerman explained that the Department of Law has indicated                 
  that  cases  exist  in  reference  to license  fees  between                 
  resident and non-residents.   The Department recommends that                 
  the current ratio  should be lower determined by  the amount                 
  of State dollars spent on the industry.                                      
                                                                               
  STEVEN DAUGHERTY,  ASSISTANT ATTORNEY GENERAL,  ALASKA BOARD                 
  OF FISHERIES, DEPARTMENT OF LAW,  explained that the Board's                 
  current authority under Section 12, AS 05.16.05.251, is over                 
  guided sport fishing,  not direct  authority over the  guide                 
  him/herself.  The guide is not  the person who is physically                 
  engaged in the activity,  rather, the one who is  taking the                 
  client  out.   Most of  the  Board's regulations  are worded                 
  specifically toward  the  client.   There  are  only  a  few                 
  regulations which  directly apply  to guides.   Registration                 
  requirements have  been approved  by the  Department of  Law                 
  because they are reasonably necessary  in order to implement                 
  the Board's authority to  guide sport fishermen and are  not                 
  substantive requirements.                                                    
                                                                               
  Mr. Daugherty  continued, there  will be  challenges if  the                 
  Board  is  not  given explicate  authority  to  regulate the                 
  guided  sport  industry rather  than  just the  guided sport                 
  fishermen.                                                                   
                                                                               
  DONALD  WESTLUND,  (TESTIFIED  VIA TELECONFERENCE),  CHARTER                 
  GUIDE,  KETCHIKAN,  suggested that  the  bill would  cause a                 
  duplication of  reporting for the  sport fish industry.   He                 
  noted that he did not support the legislation.                               
                                                                               
  HB 19 was HELD in Committee for further consideration.                       
  ADJOURNMENT                                                                  
                                                                               
  The meeting adjourned at 10:00 A.M.                                          
                                                                               
                                                                               
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