Legislature(2003 - 2004)

03/23/2004 01:45 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                  HOUSE FINANCE COMMITTEE                                                                                       
                       March 23, 2004                                                                                           
                         1:45 P.M.                                                                                              
                                                                                                                                
TAPE HFC 04 - 64, Side A                                                                                                        
TAPE HFC 04 - 64, Side B                                                                                                        
TAPE HFC 04 - 65, Side A                                                                                                        
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Williams called the House  Finance Committee meeting                                                                   
to order at 1:45 P.M.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative John Harris, Co-Chair                                                                                            
Representative Bill Williams, Co-Chair                                                                                          
Representative Kevin Meyer, Vice-Chair                                                                                          
Representative Mike Chenault                                                                                                    
Representative Eric Croft                                                                                                       
Representative Hugh Fate                                                                                                        
Representative Richard Foster                                                                                                   
Representative Mike Hawker                                                                                                      
Representative Reggie Joule                                                                                                     
Representative Carl Moses                                                                                                       
Representative Bill Stoltze                                                                                                     
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Representative  Dan  Ogg; Senator  Gene  Therriault;  Speaker                                                                   
Pete  Kott; John  Main,  Staff, Representative  Speaker  Pete                                                                   
Kott;  Pete  Ecklund, Staff,  Representative  Bill  Williams;                                                                   
Landa Baily,  Special Assistant, Department of  Revenue; Anne                                                                   
Carpeneti,   Assistant  Attorney   General,  Legal   Services                                                                   
Section,   Criminal  Division,   Department  of  Law;   Chuck                                                                   
Harlamert,   Revenue   Audit    Supervisor,   Tax   Division,                                                                   
Department  of Revenue; Glenn  Haight, Fisheries  Development                                                                   
Specialists, Department of Community  & Economic Development;                                                                   
Barbara Cotting, Staff, Representative  Jim Holm; Joe Balash,                                                                   
Staff,  Senator  Gene Therriault;  Paul  Fuhs,  Back Bone  2;                                                                   
Jerry  McCune,  United  Fisherman   of  Alaska,  Juneau;  Bob                                                                   
Thorstenson,  President, United  Fishermen  of Alaska  (UFA);                                                                   
Deborah  Behr,   Assistant  Attorney  General,   Regulations,                                                                   
Department   of  Law;  Dave   Stancliff,  Regulation   Review                                                                   
Committee,   Staff,   Representative   Pete   Kott;   Speaker                                                                   
Representative Pete  Kott; Pam LaBolle, Alaska  State Chamber                                                                   
of Commerce, Juneau.                                                                                                            
                                                                                                                                
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
John  Mallonee, Acting  Director,  Child Support  Enforcement                                                                   
Division,  Department   of  Revenue,  Anchorage;   Lt.  Allen                                                                   
Storey, Alaska  State Troopers, Department of  Public Safety,                                                                   
Anchorage; Harold C. Heinze, Chief  Executive Officer, Alaska                                                                   
Natural  Gas  Pipeline  Authority   (ANGDA),  Anchorage;  Bob                                                                   
Favretto,  Alaska Natural  Gas  Development Authority  Board,                                                                   
Anchorage; Steve  Porter, Deputy Commissioner,  Department of                                                                   
Revenue, Anchorage; Jerry McCutcheon, Anchorage;                                                                                
                                                                                                                                
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 419    An  Act relating  to  regional seafood  development                                                                   
          associations  and to  regional seafood  development                                                                   
          taxes.                                                                                                                
                                                                                                                                
          CS HB 419 (RES) was reported out of Committee with                                                                    
          a "do  pass" recommendation  and with zero  note #1                                                                   
          by   the  Department   of   Community  &   Economic                                                                   
          Development  and  indeterminate   note  #2  by  the                                                                   
          Department of Revenue.                                                                                                
                                                                                                                                
HB 424    An Act relating to review  of regulations under the                                                                   
          Administrative  Procedure  Act by  the  Legislative                                                                   
          Affairs  Agency;  and  providing for  an  effective                                                                   
          date.                                                                                                                 
                                                                                                                                
          HB 424 was HEARD and HELD in Committee for further                                                                    
          consideration.                                                                                                        
                                                                                                                                
HB 514    An Act  relating to child support  modification and                                                                   
          enforcement,  to the establishment of  paternity by                                                                   
          the  child support enforcement  agency, and  to the                                                                   
          crimes  of  criminal   nonsupport  and  aiding  the                                                                   
          nonpayment  of child  support; amending Rule  90.3,                                                                   
          Alaska Rules of Civil  Procedure; and providing for                                                                   
          an effective date.                                                                                                    
                                                                                                                                
          CS HB 514 (FIN) was  reported out of Committee with                                                                   
          "individual recommendations"  and with a new fiscal                                                                   
          note by  the Department of Revenue, a  zero note by                                                                   
          the Department of Public  Safety, two zero notes by                                                                   
          the  Department  of  Administration,  indeterminate                                                                   
          note   #2   by   the  Alaska   Court   System   and                                                                   
          indeterminate note #3 by the Department of Law.                                                                       
                                                                                                                                
CS SB 241(FIN)                                                                                                                  
          An  Act making an  appropriation to the  Department                                                                   
          of  Revenue  for  work related  to  bringing  North                                                                   
          Slope natural  gas to market; and providing  for an                                                                   
          effective date.                                                                                                       
                                                                                                                                
          CS SB 241 (FIN) was reported out of Committee with                                                                    
          a "do pass" recommendation.                                                                                           
                                                                                                                                
CS FOR SENATE BILL NO. 241(FIN)                                                                                               
                                                                                                                                
     An  Act making  an appropriation  to  the Department  of                                                                   
     Revenue  for  work  related   to  bringing  North  Slope                                                                   
     natural gas  to market; and  providing for  an effective                                                                   
     date.                                                                                                                      
                                                                                                                                
SENATOR GENE THERRIAULT explained  the intent of SB 241.  The                                                                   
appropriation  is   proposed  to  provide  funding   for  the                                                                   
administrative  agencies  and  Alaska  Natural  Gas  Pipeline                                                                   
Development  Authority (ANGDA)  in order  to move forward  in                                                                   
the  effort to  bring natural  gas  to market.   The  funding                                                                   
would be  provided through the  Department of  Revenue, which                                                                   
would provide the accounting mechanism.                                                                                         
                                                                                                                                
Senator  Therriault  pointed   out  that  the  original  bill                                                                   
provided $2 million  dollars.  In a Senate  Finance Committee                                                                   
meeting,  there was  discussion regarding  funding for  2005,                                                                   
and it  was agreed  that should  be contained  in next  years                                                                   
budget.    Thus, the  funding  was  decreased to  $1  million                                                                   
dollars addressing  the items  critical at the  present time.                                                                   
He stressed that  it is important to provide  funding at this                                                                   
time for contracts associated with the Stranded Gas Act.                                                                        
                                                                                                                                
STEVE   PORTER,  (TESTIFIED   VIA   TELECONFERENCE),   DEPUTY                                                                   
COMMISSIONER,  DEPARTMENT OF REVENUE,  ANCHORAGE, noted  that                                                                   
the Department  of Revenue had  requested $1 million  dollars                                                                   
for the  purpose of supporting  stranded gas development  and                                                                   
the work  of ANGDA.   He pointed out  that the total  amount,                                                                   
which  could be  spent,  obviously  would exceed  $1  million                                                                   
dollars, made available through  the legislation.  The amount                                                                   
would be spent in FY04 to deal  primarily with tariff issues,                                                                   
fiscal  terms, petro-chemical  analysis,  social impacts  and                                                                   
understanding route assessment.                                                                                                 
                                                                                                                                
HAROLD  C.  HEINZE,  (TESTIFIED  VIA  TELECONFERENCE),  CHIEF                                                                   
EXECUTIVE  OFFICER,  ALASKA NATURAL  GAS  PIPELINE  AUTHORITY                                                                   
(ANGDA),  ANCHORAGE,  stated that  he  had faxed  a  handout,                                                                   
identifying how ANGDA is doing  concerning the taxes, funding                                                                   
and  then identifying  current contracts  that are  underway.                                                                   
(Copy  on File).   He added  that the  handout indicate  work                                                                   
skills performed under the contracts.                                                                                           
                                                                                                                                
The work  currently done  by ANGDA  continues to be  positive                                                                   
and encouraging  to the  Authority's role  as a mechanism  to                                                                   
help the  financing improve  the marketability  of the  North                                                                   
Slope  gas  as well  as  providing  benefits to  Alaskans  by                                                                   
delivering  gas to  the Cook  Inlet  region.   The Board  has                                                                   
considered SB 241  and has taken a positive  view toward that                                                                   
legislation.  Additionally, the  operating budget proposed by                                                                   
the Administration  has been  amended to  provide a  total of                                                                   
$256  thousand  dollars  in  FY05.   Mr.  Heinze  offered  to                                                                   
provide  contract  details,  pointing   out  several  needing                                                                   
immediate  attention through  the  approval  of the  proposed                                                                   
legislation.    Mr.  Heinze  urged   that  the  project  move                                                                   
forward.                                                                                                                        
                                                                                                                                
Representative Chenault questioned  the projected scenario of                                                                   
delivering gas to the Cook Inlet  area at $1 to $1.25 dollars                                                                   
and  asked if  that would  be  the total  cost including  the                                                                   
tariffs  to Cook  Inlet.   Mr.  Heinze  explained that  those                                                                   
amounts are  estimates determined  for various approaches  of                                                                   
getting gas  to Cook Inlet.   They are the  numbers projected                                                                   
for  getting the  North  Slope conditioning,  pipelining  and                                                                   
delivery into the Cook Inlet natural gas system.                                                                                
                                                                                                                                
BOB FAVRETTO, (TESTIFIED VIA TELECONFERENCE),  ALASKA NATURAL                                                                   
GAS  DEVELOPMENT  AUTHORITY  BOARD,   ANCHORAGE,  offered  to                                                                   
address the amendments as they are brought forward.                                                                             
                                                                                                                                
JERRY MCCUTCHEON, (TESTIFIED VIA  TELECONFERENCE), ANCHORAGE,                                                                   
noted his concern that the Legislature  understand "What they                                                                   
are dealing with on the North  Slope", particularly regarding                                                                   
Prudhoe Bay.   He commented on  a suit that occurred  in that                                                                   
area in  which "records  had been sealed".   He claimed  that                                                                   
the current  Administration is  "blinded".   The oil  is two-                                                                   
thirds recoverable  if the gas is kept in the  reservoir.  He                                                                   
projected that oil  prices will increase the  first few years                                                                   
and then  they will crash.   Mr. McCutcheon recommended  that                                                                   
there be a commitment  on record to find out  how much really                                                                   
exists.                                                                                                                         
                                                                                                                                
Representative  Croft  MOVED  to  ADOPT  Amendment  #1,  #23-                                                                   
LS1279\I.1, Utermohle,  3/22/04.   (Copy on File).   Co-Chair                                                                   
Williams OBJECTED.                                                                                                              
                                                                                                                                
Representative  Croft noted  that the  amendment attempts  to                                                                   
change the  amount back  to $3  million dollars, creating  an                                                                   
equal  distribution  between  ANGDA  and  the  Department  of                                                                   
Revenue.   He  acknowledged that  the  Department would  need                                                                   
some  funding  under the  Stranded  Gas  Act but  that  money                                                                   
should be separate from the purpose  of funding ANGDA.  ANGDA                                                                   
is  an independent  body  with  an independent  Board,  which                                                                   
needs and deserves full funding.                                                                                                
                                                                                                                                
Senator  Therriault  advised   the  proposed  funding  passed                                                                   
through the  Department of  Revenue and  was endorsed  by the                                                                   
                                                            th                                                                  
ANGDA Board through  a resolution passed at  the February 16                                                                    
meeting.   ANGDA has  indicated that  they are  "comfortable"                                                                   
with the  current plan.   He pointed  out that in  the Senate                                                                   
Finance  Committee   meeting,  both  the  Majority   and  the                                                                   
Minority  members agreed  that  it was  more appropriate  for                                                                   
ANGDA to  come back  to the FY05  budget process  for further                                                                   
allocations.   Senator Therriault stated that  his preference                                                                   
would be to stick with the original amount.                                                                                     
                                                                                                                                
Co-Chair  Harris  asked  if  Mr.  Heinze  was  aware  of  the                                                                   
amendment and  the on-going negotiations between  both bodies                                                                   
regarding  the amount  being made  available to  ANGDA.   Mr.                                                                   
Heinze replied  that he was  aware of the proposed  amendment                                                                   
and  that he  had  responded to  Representative  Croft.   The                                                                   
response included  that while  the original bill  funded both                                                                   
FY04 and  FY05, it  was clear during  the discussions  in the                                                                   
Senate Finance  Committee that  the preference was  to decide                                                                   
only about  FY04 funding.   That  Committee proposed  that it                                                                   
would be  a better  process to address  only the  FY04 budget                                                                   
needs at  this time.   He  added that  the $1 million  dollar                                                                   
allocation for  the two remaining months could  be sufficient                                                                   
and that  ANGDA would look  forward to additional  funding in                                                                   
the FY05 budget for the stranded gas effort.                                                                                    
                                                                                                                                
Co-Chair  Harris asked  if ANGDA  was satisfied  with the  $1                                                                   
million  dollar  appropriation  at this  time,  knowing  that                                                                   
there would  be fair opportunity  in the FY05  Capital Budget                                                                   
for more  funding.   Mr. Heinze  reiterated that they  would,                                                                   
submitting  that ANGDA  prefers  the adoption  of the  Senate                                                                   
version of the  bill, hoping that it would move  to the floor                                                                   
as quickly as possible.                                                                                                         
                                                                                                                                
Mr. Favretto spoke  to Amendment #1.  He voiced  concern with                                                                   
the funding mechanisms  to support ANGDA.  He  understood and                                                                   
appreciated Representative  Croft's concern with  the funding                                                                   
level for ANGDA  but noted his concern with  getting the bill                                                                   
back  through  the  Senate  in  time  for  adjournment.    He                                                                   
emphasized that ANGDA  could live with the $1  million dollar                                                                   
allocation to finish the tasks at hand.                                                                                         
                                                                                                                                
Representative Croft  elaborated that his interests  in ANGDA                                                                   
rests with  the independence  of the Board  and hope  it will                                                                   
bring the  issues to the State.   The Administration  and the                                                                   
Legislature   have  shown   over   1.5   years  of   neglect,                                                                   
compromising that independence.   The Board does not have any                                                                   
choice left, as they never have  had the funding needed to do                                                                   
the  appropriate studies.   Their  requests have  continually                                                                   
been  reduced.   Representative  Croft  doubted  that the  $1                                                                   
million  appropriation  would be  sufficient  with the  funds                                                                   
passing  through the Department  of Revenue.   He  emphasized                                                                   
that the Amendment  would provide enough funding  and is "the                                                                   
right  thing  to  do",  by  providing  ANGDA  some  financial                                                                   
security.   He noted that he was  disappointed that ANGDA was                                                                   
willing   to  settle   for  only  the   $1  million   dollars                                                                   
allocation.                                                                                                                     
                                                                                                                                
A roll call vote was taken on the MOTION.                                                                                       
                                                                                                                                
IN FAVOR:      Moses, Chenault, Croft                                                                                           
OPPOSED:       Hawker, Joule, Meyer, Stoltze, Fate, Foster,                                                                     
               Harris, Williams                                                                                                 
                                                                                                                                
The MOTION FAILED (3-8).                                                                                                        
                                                                                                                                
Representative  Croft  MOVED  to  ADOPT  Amendment  #2,  #23-                                                                   
LS1279\I.2, Utermohle,  3/22/04.   (Copy on File).   Co-Chair                                                                   
Williams OBJECTED.                                                                                                              
                                                                                                                                
Representative Croft  explained that if the  amount allocated                                                                   
to  the request  is $1  million  dollars, then  it should  be                                                                   
guaranteed that at  least half of that amount  goes to ANGDA.                                                                   
The  amendment  would provide  an  allocation  within the  $1                                                                   
million dollar appropriation.                                                                                                   
                                                                                                                                
Senator Therriault  advised that on  the Senate side,  he had                                                                   
directed  that  the  money pass  through  the  Department  of                                                                   
Revenue, which is the manner in  which the Legislative Budget                                                                   
and Audit  (LBA) Committee  had  routed it.   Members of  the                                                                   
ANGDA Board have  indicated that their relationship  with the                                                                   
Department has  improved.  They are comfortable  with routing                                                                   
the money through  the Department of Revenue.   Acceptance of                                                                   
                                                th                                                                              
the routing  was included  in their  February 16   resolution                                                                   
passed by  the entire ANGDA Board.   If the  Legislature sees                                                                   
that  the  Department and  the  Board  are not  working  well                                                                   
together, then the FY05 budget  could be handled differently.                                                                   
He did not foresee problems.                                                                                                    
                                                                                                                                
In response to Co-Chair Harris,  Mr. Heinze explained that in                                                                   
addition  to the  authority  provided by  the  voters in  the                                                                   
November  2002  election,  the  State has  entered  into  the                                                                   
stranded gas process with a number  of applicants.  There are                                                                   
a myriad of  issues facing the State related  to natural gas.                                                                   
The  basic  idea of  ANGDA  working  with the  Department  of                                                                   
Revenue contributes  to the  total effort.   There  have been                                                                   
"honest  hearings  regarding   the  efforts  proposed".    He                                                                   
elaborated that he was comfortable  at this time working in a                                                                   
team effort with the Department of Revenue.                                                                                     
                                                                                                                                
Representative Croft commented  that he was not sure that the                                                                   
treasurer handling the "purse  strings" for ANGDA would agree                                                                   
with Mr.  Heinze.  He thought  that at this point,  ANGDA was                                                                   
putting  forward  a "desperate  plea"  for anything.    Board                                                                   
members are  still not  confirmed and ANGDA  is not  going to                                                                   
exist in the  manner that the voters intended.   He suggested                                                                   
that  ANGDA   has  become  a   "weird"  subdivision   of  the                                                                   
Department of Revenue and that it is not independent.                                                                           
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR:      Joule, Moses, Stoltze, Croft                                                                                     
OPPOSED:       Meyer, Chenalut, Fate, Foster, Hawker,                                                                           
               Williams, Harris                                                                                                 
                                                                                                                                
The MOTION FAILED (4-7).                                                                                                        
                                                                                                                                
PAUL FUHS, BACK BONE 2, JUNEAU,  testified in support for the                                                                   
proposed  legislation.    He noted  that  Back  Bone 2  is  a                                                                   
citizen's  organization to  advocate for  the fulfillment  of                                                                   
Proposition  #3,  which  was overwhelmingly  adopted  by  the                                                                   
citizens of Alaska.  He believed  that information that would                                                                   
come forward from  studies through the Department  of Revenue                                                                   
and  would  be  thoroughly  utilized.     He  referenced  his                                                                   
handouts.  (Copy on File).                                                                                                      
                                                                                                                                
Mr.  Fuhs  stressed  that  Alaska  is in  a  "race"  for  the                                                                   
development  market.  There  are a  number of companies  that                                                                   
are interested  in Alaskan  gas.   The three major  producers                                                                   
have noticed  the continual delays  on the pipeline  projects                                                                   
in Alaska.   Mr. Fuhs indicated his concern  with the funding                                                                   
being provided, wanting  to accept and believe  the word from                                                                   
the  Department  of  Revenue   by  Mr.  Steve  Porter.    The                                                                   
contracts are  ready to go and  the people of the  State will                                                                   
know immediately  if the Department has not  followed through                                                                   
on them.  He  encouraged member's to check out  the Back Bone                                                                   
2  website  for more  in-depth  information  regarding  these                                                                   
concerns.                                                                                                                       
                                                                                                                                
Vice  Chair  Meyer  inquired   if  an  application  had  been                                                                   
received from Mid  America.  (Mr. Porter was no  long on line                                                                   
to respond).   Co-Chair  Williams said that  he did  not know                                                                   
about that application.                                                                                                         
                                                                                                                                
Representative Foster MOVED to  report CS SB 241 (FIN) out of                                                                   
Committee with  individual recommendations.   There  being NO                                                                   
OBJECTION, it was ordered.                                                                                                      
                                                                                                                                
CS SB  241 (FIN)  was reported  out of  Committee with  a "do                                                                   
pass" recommendation.                                                                                                           
                                                                                                                                
HOUSE BILL NO. 419                                                                                                            
                                                                                                                                
     An Act relating to regional seafood development                                                                            
     associations and to regional seafood development taxes.                                                                    
                                                                                                                                
REPRESENTATIVE DAN  OGG testified in support of HB  419.  The                                                                   
bill  was  recommended   by  the  Joint   Legislative  Salmon                                                                   
Industry  Task  Force  and  would  allow  fishermen  to  form                                                                   
regional seafood development associations  to tax themselves,                                                                   
providing  a  stable  funding   source  for  their  marketing                                                                   
efforts.                                                                                                                        
                                                                                                                                
Representative  Ogg noted that  farmed salmon production  has                                                                   
increased dramatically  over the  past decade, exceeding  the                                                                   
wild salmon  catch and causing  prices to plummet.   In order                                                                   
to compete  in that  market, Alaska's  salmon fishermen  have                                                                   
sought creative  ways to differentiate  wild fish  from their                                                                   
penned counterparts.   One method  that has proven  effective                                                                   
in  distinguishing the  two is  regional  marketing.   Copper                                                                   
River fishermen  took the  lead in  establishing a  brand for                                                                   
their  catch,  proving  the  enormous   potential  for  niche                                                                   
markets.    Now  several  other  regional  brands  have  been                                                                   
established  in  communities  such  as  Kenai,  the  Aleutian                                                                   
Islands, and Kodiak.                                                                                                            
                                                                                                                                
Representative   Ogg   pointed   out   that   most   branding                                                                   
organizations are  currently dependent on a mix  of State and                                                                   
federal  grants  to fund  marketing  efforts.   However,  the                                                                   
grants  are often  unreliable and  one-time revenue  sources.                                                                   
HB 419 would allow regional seafood  development associations                                                                   
to  assess themselves  between  one-half and  two percent  to                                                                   
provide a steady stream for marketing dollars.                                                                                  
                                                                                                                                
HB 419 creates 12 distinct seafood  development regions based                                                                   
on commercial  fishing  management areas  established by  the                                                                   
Board  of Fish.   Under  the  bill, all  the  fishermen in  a                                                                   
region can  vote to participate  in an association or  it may                                                                   
be  limited to  a  specific fishery  or  fisheries.   Once  a                                                                   
regional  association  is formed,  other  fisheries can  vote                                                                   
themselves  into or  out of  the association,  but there  can                                                                   
only be one association per region.                                                                                             
                                                                                                                                
Representative  Ogg  pointed   out  that  as  the  amount  of                                                                   
imported  and  farmed  seafood continues  to  rise,  regional                                                                   
marketing  associations  would provide  a  valuable tool  for                                                                   
Alaska's  commercial fishermen.    Regional associations  are                                                                   
able  to  focus  on  the unique  areas  where  the  fish  are                                                                   
harvested,  building  on  Alaska's  reputation  for  pristine                                                                   
waters that yield superior fish.                                                                                                
                                                                                                                                
Representative  Stoltze  questioned if  there  would be  more                                                                   
value  in allowing  areas to opt  out of  the Alaska  Seafood                                                                   
Marketing  Institute (ASMI).    Representative Ogg  responded                                                                   
that  through  his  discussions,  there  was  agreement  that                                                                   
people  want  to keep  that  separate,  and  do not  want  to                                                                   
negatively impact ASMI, but instead work cooperatively.                                                                         
                                                                                                                                
Representative  Stoltze  asked if  the  "pit  falls" of  ASMI                                                                   
could be  avoided.   Representative Ogg  responded that  ASMI                                                                   
does an excellent  job marketing all Alaskan  seafood's.  The                                                                   
proposed associations  would have  more freedom in  marketing                                                                   
particular products and with access  to specific development.                                                                   
                                                                                                                                
Representative   Stoltze  inquired   if   the  amendment   he                                                                   
distributed  for  a  three-year   sunset  made  it  into  the                                                                   
member's  packets.   Representative  Ogg  commented that  the                                                                   
associations  would  be done  voluntarily.    The bill  would                                                                   
establish a vehicle  for individual areas of the  State to go                                                                   
through with a  set up and that they would either  make it or                                                                   
they would fail.   To require coming back to  the Legislature                                                                   
and  going through  it again  would  not be  productive.   He                                                                   
believed that  they would stand  on their own.   He requested                                                                   
that a sunset not be tied to the proposed legislation.                                                                          
                                                                                                                                
Co-Chair  Williams recommended  that  a conceptual  amendment                                                                   
could be brought forward.                                                                                                       
                                                                                                                                
Representative Fate noticed the  twelve regions and asked how                                                                   
a  situation  would be  handled  when  a specific  brand  was                                                                   
indicated for  a specific area.   Representative  Ogg replied                                                                   
that was why there would be twelve  regions established.  The                                                                   
bill attempts  to acquire flexibility and would  not preclude                                                                   
an association from adopting two  products.  That flexibility                                                                   
is already included in the bill.                                                                                                
                                                                                                                                
Representative Fate  commented on the different  qualities of                                                                   
each  region and  that marketing  different  brands would  be                                                                   
important.   Representative  Ogg  acknowledged  that will  be                                                                   
allowable under the  bill.  The Salmon Task  Force noted that                                                                   
the Yukon River is divided into  three regions in recognition                                                                   
that there are different fisheries  taking place over a broad                                                                   
distance.                                                                                                                       
                                                                                                                                
Representative Hawker referenced  Page 11, stipulating that a                                                                   
qualified  regional  seafood   association  be  brought  into                                                                   
existence, and  may request  State financial assistance  from                                                                   
the Department.   He highlighted  the use of "may  and shall"                                                                   
and  the  determinations  that   could  be  made  using  that                                                                   
language.   He  inquired the  intent,  understanding that  it                                                                   
would be a self-assessment.                                                                                                     
                                                                                                                                
                                                                                                                                
TAPE HFC 04 - 64, Side B                                                                                                      
                                                                                                                                
                                                                                                                                
Representative   Ogg  explained   that  section  allows   for                                                                   
programs currently  in place.  The Office of  the Governor is                                                                   
funding some of  those regional start-up efforts.   There has                                                                   
been recognition of  that status and at a future  date, there                                                                   
could  be some  sort  of development  for  that fishery  with                                                                   
money  flowing  from  that office.    The  proposed  language                                                                   
leaves that  window open  for applying.   The intent  is that                                                                   
the associations are self-standing.                                                                                             
                                                                                                                                
Representative  Hawker  inquired  if  the bill  could  be  as                                                                   
effective and accessible  without Sections D & E  on Page 11.                                                                   
Representative  Ogg  responded  that removing  that  language                                                                   
would not  foreclose them, as  most of the entities  are non-                                                                   
profits.  If non-profits are available  to apply for State or                                                                   
federal grants, it would not make a difference.                                                                                 
                                                                                                                                
Representative Joule  referenced Page  10, Lines 27 &  28 and                                                                   
asked  how  that  language  would  affect  the  inclusion  of                                                                   
Kotzebue with the Yukon-Northern  region as opposed to Norton                                                                   
Sound-Port Clarence area.  Representative  Ogg explained that                                                                   
when  the decision  was made,  representatives  of each  area                                                                   
indicated that  they thought that  would be the  best choice.                                                                   
He admitted  that he  did not know  exactly how the  decision                                                                   
had been determined.                                                                                                            
                                                                                                                                
Co-Chair  Williams referenced  Page 4,  Lines 25-31,  and the                                                                   
two ballots  for each eligible  interim-use permit  and entry                                                                   
permit holder.   Representative  Ogg explained that  language                                                                   
was crafted from pre-existing situations.                                                                                       
                                                                                                                                
CHUCK  HARLAMERT,  REVENUE AUDIT  SUPERVISOR,  TAX  DIVISION,                                                                   
DEPARTMENT  OF REVENUE,  offered to answer  questions  of the                                                                   
Committee.                                                                                                                      
                                                                                                                                
JERRY  MCCUNE,  UNITED  FISHERMAN OF  ALASKA  (UFA),  JUNEAU,                                                                   
voiced strong  support for the  legislation, as it  will help                                                                   
fishermen  to finance  their own  promotional  programs.   He                                                                   
noted that  alternate sources  of financing are  beginning to                                                                   
dry up.                                                                                                                         
                                                                                                                                
Co-Chair  Harris   asked  if  it  would  be   mandatory  that                                                                   
fisherman  join.  Mr.  McCune explained  that in the  current                                                                   
version of the bill, the 1% salmon  tax would be dropped.  He                                                                   
added that there would be the  option of being taxed and with                                                                   
that option, the  person would then have a vote.   He pointed                                                                   
out the infrastructure of the proposed legislation.                                                                             
                                                                                                                                
Co-Chair Williams  understood that  all fishermen  would have                                                                   
to pay the tax  in their area.  Mr. McCune  acknowledged that                                                                   
was correct  and that  if a  majority of  the permit  holders                                                                   
voted, then  all permit holders  would have to pay  that tax.                                                                   
He noted that a mechanism was included to help remove it.                                                                       
                                                                                                                                
Representative Hawker  questioned if the  sections indicating                                                                   
that  the  seafood development  associations  "may,"  request                                                                   
State financial  assistance, were  critical to UFA's  support                                                                   
of the  bill.   Mr. McCune  responded that  there are  grants                                                                   
available to non-profits through  the Department of Community                                                                   
& Economic Development.   The language attempts  to guarantee                                                                   
if a new non-profit was formed  that they be eligible for it.                                                                   
He indicated that if the sponsor  was satisfied with removing                                                                   
that language, then UFA would also support that action.                                                                         
                                                                                                                                
Representative  Stoltze  MOVED to  adopt  Amendment #1,  #23-                                                                   
LS1418\V.1,  Utermohle, 3/9/04.   (Copy  on File).   Co-Chair                                                                   
Williams OBJECTED.                                                                                                              
                                                                                                                                
Representative Stoltze  advised that the amendment  would add                                                                   
a sunset  clause, which  is a common  procedure used  for new                                                                   
programs.  He  pointed out that ASMI currently  has a sunset.                                                                   
Representative  Ogg advised that  the amendment  also deletes                                                                   
language  on   Page  1,  Line  8.     Representative  Stoltze                                                                   
corrected that was  a drafting style for sun  setting a bill.                                                                   
Representative Ogg  stated he did not support  the three-year                                                                   
sunset or the amendment.  He thought  that Amendment #1 would                                                                   
complicate the issues.                                                                                                          
                                                                                                                                
Co-Chair Harris referenced Page  2, Line 4, Section 7, of the                                                                   
amendment.     Representative  Stoltze  advised   those  were                                                                   
repealers.                                                                                                                      
                                                                                                                                
Co-Chair Williams informed members  that he had worked on the                                                                   
Fish Task Force and that the fishermen  have worked very hard                                                                   
to come to an agreement.  The  proposed legislation has a lot                                                                   
of support from  fishermen statewide.  He stated  that he did                                                                   
not  support  the  amendment and  thought  that  the  Alaskan                                                                   
fishermen  should be  shown  support during  these  difficult                                                                   
times.  He emphasized  that the fishermen support  the tax to                                                                   
themselves.                                                                                                                     
                                                                                                                                
Representative  Stoltze  inquired   if  it  currently  was  a                                                                   
voluntary  tax.   Representative  Ogg responded  that if  you                                                                   
were in  a fishery  and the fishery  decides to  participate,                                                                   
and 51% of those permit holders  make that decision, everyone                                                                   
must pay  the tax.   He stressed that  it is as  voluntary as                                                                   
possible in Alaska  and added that there could  be a petition                                                                   
to be removed.                                                                                                                  
                                                                                                                                
Representative Hawker indicated  concern that the sunset will                                                                   
                       th                                                                                                       
take place  December 30,  2007.   The industry  members would                                                                   
have  to make  the decision,  establish  the association  and                                                                   
then  move forward.   Establishing  a non-profit  association                                                                   
becomes durable and perpetual.   He thought the operations of                                                                   
the  bill would  be  inconsistent and  would  provide only  a                                                                   
brief authority  for the durability  of the association.   He                                                                   
concurred  that the  sunset  may not  be  appropriate in  the                                                                   
proposed circumstance.                                                                                                          
                                                                                                                                
Co-Chair   Harris   pointed   out   that   establishing   the                                                                   
associations must be a majority  rule.  He noted that all the                                                                   
dissenters would be forced to  pay the tax.  He asked if that                                                                   
would create  friction among  the fishermen.   Representative                                                                   
Ogg  referenced the  history of  the  entities, pointing  out                                                                   
that there  have been  fisheries that have  opted for  such a                                                                   
status.   The action  will provide  for a salmon  enhancement                                                                   
organization.  It  has worked in the past and  should work in                                                                   
the future.                                                                                                                     
                                                                                                                                
Co-Chair Harris asked if Representative  Ogg would be willing                                                                   
to  support  a  five-year sunset  rather  than  the  proposed                                                                   
three-year.   He believed that  five years would  provide the                                                                   
program  the  opportunity  to  determine  satisfaction.    He                                                                   
thought   that   the   next    authorization   would   be   a                                                                   
straightforward process.   Co-Chair Williams warned  that the                                                                   
proposed program should  not be compared to ASMI.   ASMI is a                                                                   
tax  bill, whereas,  HB 419  is  a self  imposed taxation  by                                                                   
vote.  Co-Chair Harris pointed  out that ASMI too, was put in                                                                   
place  at the  recommendation of  fishermen.   Representative                                                                   
Ogg acknowledged  that  ASMI is  different as  it is a  State                                                                   
imposed tax.   He admitted  that had  been a "tough"  vote to                                                                   
pass.                                                                                                                           
                                                                                                                                
Co-Chair Harris  inquired that if the legislation  was passed                                                                   
and an  association was  formed, would  those fishermen  then                                                                   
also pay  the ASMI tax.   Representative Ogg replied  that if                                                                   
the law remains as is, then they would pay both.                                                                                
                                                                                                                                
Representative Stoltze  MOVED to AMEND Amendment  #1, Page 2,                                                                   
Line 6, deleting "2007" and inserting "2009".                                                                                   
                                                                                                                                
                                                           th                                                                   
Co-Chair Harris  requested to change  the date to  "June 30,                                                                    
2009".  There being NO OBJECTION,  the amendment was amended.                                                                   
                                                                                                                                
Representative  Fate asked what  the Legislature could  do if                                                                   
something  went wrong  with the proposal  with the  extension                                                                   
and sunset.   Representative  Stoltze  explained that  he did                                                                   
not know  the fishery issues  and was not comfortable  voting                                                                   
for taxes in a  new program.  He warned that  taxation should                                                                   
be approached cautiously especially  in a group as diverse as                                                                   
the fisheries.  The sunset would  provide more comfort to him                                                                   
personally.  Representative  Fate interjected that  HB 419 is                                                                   
a tax bill but not an imposition to levy a tax.                                                                                 
                                                                                                                                
Co-Chair Williams  advised that  he himself has  been working                                                                   
on a fisheries tax bill, pointing  out that all the fisheries                                                                   
support HB 419.                                                                                                                 
                                                                                                                                
BOB  THORSTENSON,  PRESIDENT,   UNITED  FISHERMEN  OF  ALASKA                                                                   
(UFA), appreciated Representative  Stoltze's concern with the                                                                   
current number of taxes paid by  fishermen.  He noted that on                                                                   
an  average  year,  68%  of his  revenue  was  taken  through                                                                   
taxation.    There  are  many   groups  who  are  taking  the                                                                   
opportunity  to  use  the proposed  vehicle  to  implement  a                                                                   
package  supported  statewide.   There  has  been a  thorough                                                                   
review of  the legislation  from the  UFA with no  objections                                                                   
from  any of  the 34  member  groups.   He  thought that  the                                                                   
sunset amendment would "cripple" the legislation.                                                                               
                                                                                                                                
Representative Stoltze  asked if the  support was 51%  of the                                                                   
actual  membership  or  of those  voting.    Mr.  Thorstenson                                                                   
responded  that it  was  51% of  the permit  holders  voting.                                                                   
Representative  Stoltze interjected  that  the small  fishing                                                                   
people might not  be aware of the election.   Mr. Thorstenson                                                                   
stated that  was out of the purview  of the UFA.   Those that                                                                   
missed the vote would most likely  be the non-resident voters                                                                   
living outside  of the State.   He noted that there  has been                                                                   
concern  voiced in  creating a  level playing  field for  the                                                                   
commercial  fishing  business.    There has  been  a  massive                                                                   
consolidation  in the  processing  sector that  has not  been                                                                   
accompanied  by a  consolidation  in the  harvesting  center.                                                                   
The processing sector has the  opportunity to do a tremendous                                                                   
amount  of marketing  through new  legislation and  programs.                                                                   
The proposed legislation dovetails  nicely with the U.S. ASMI                                                                   
legislation  brought   forward  by  Senator  Stevens.     The                                                                   
opportunity for  fishermen to do  their own thing  and market                                                                   
by   region  would   be   vastly  facilitated   through   the                                                                   
legislation.                                                                                                                    
                                                                                                                                
Co-Chair Williams asked if there  was a vote, who could start                                                                   
it.  Mr.  Thorstenson replied that would be  the Commissioner                                                                   
of Department of Community & Economic Development.                                                                              
                                                                                                                                
A  roll call  vote  was  taken on  the  motion  to adopt  the                                                                   
amended Amendment #1.                                                                                                           
                                                                                                                                
IN FAVOR:      Meyer, Stoltze, Harris                                                                                           
OPPOSED:       Moses, Chenault, Croft, Fate, Foster, Hawker,                                                                    
               Joule, Williams                                                                                                  
                                                                                                                                
The MOTION FAILED (3-8).                                                                                                        
                                                                                                                                
Representative Foster MOVED to  report CS HB 419 (RES) out of                                                                   
Committee  with  individual  recommendations   and  with  the                                                                   
accompanying fiscal notes.  There  being NO OBJECTION, it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
CS HB  419 (RES)  was reported  out of  Committee with  a "do                                                                   
pass"  recommendation  and  with   a  zero  note  #1  by  the                                                                   
Department  of  Community  &   Economic  Development  and  in                                                                   
determent note #2 by the Department of Revenue.                                                                                 
                                                                                                                                
HOUSE BILL NO. 514                                                                                                            
                                                                                                                                
     An  Act  relating  to  child  support  modification  and                                                                   
     enforcement,  to the establishment  of paternity  by the                                                                   
     child support  enforcement agency, and to  the crimes of                                                                   
     criminal nonsupport  and aiding the nonpayment  of child                                                                   
     support;  amending  Rule  90.3, Alaska  Rules  of  Civil                                                                   
     Procedure; and providing for an effective date.                                                                            
                                                                                                                                
Co-Chair  Harris   MOVED  to   ADOPT  work  draft   committee                                                                   
substitute #23-LS1639\W, Mischel,  3/23/04, as the version of                                                                   
the  legislation  before  the  Committee.    There  being  NO                                                                   
OBJECTION, it was adopted.                                                                                                      
                                                                                                                                
PETE ECKLUND, STAFF, REPRESENTATIVE  BILL WILLIAMS, discussed                                                                   
the  committee  substitute,  noting  the changes.    It  will                                                                   
remove  the  peace  officer  classification   for  the  Child                                                                   
Support  Enforcement   Division  (CSED)  investigators.   The                                                                   
committee statute  deletes language "and  unreasonable", Page                                                                   
3, Line 20 of the House Judiciary version.                                                                                      
                                                                                                                                
In  response  to  a question  by  Representative  Croft,  Mr.                                                                   
Ecklund explained  that the  changes were  made to  the House                                                                   
Judiciary version, inclusion of  the pilot project located in                                                                   
Section 12.   Mr. Ecklund advised that it was  different from                                                                   
the previous, unadopted work draft.                                                                                             
                                                                                                                                
Representative  Croft  MOVED  to ADOPT  Amendment  #1,  which                                                                   
would add  "and unreasonably" on Page  3, Line 21.   (Copy on                                                                   
File).    Co-Chair  Williams  OBJECTED  for  the  purpose  of                                                                   
discussion.                                                                                                                     
                                                                                                                                
ANNE CARPENETI,  ASSISTANT ATTORNEY  GENERAL, LEGAL  SERVICES                                                                   
SECTION,  CRIMINAL  DIVISION,  DEPARTMENT  OF  LAW,  provided                                                                   
information  on Amendment  #1. She noted  that the  amendment                                                                   
could  cause  concern, as  it  would  provide an  element  of                                                                   
defense that would have to be  proven.  The Department of Law                                                                   
receives  information   under  Paragraph  A   from  employers                                                                   
regarding  other statutory  relationships,  and the  language                                                                   
could make it  unreasonably modified.  She  observed that the                                                                   
Department could draft an amendment  addressing the statutory                                                                   
duty to report.                                                                                                                 
                                                                                                                                
Representative Croft  felt that it  should not be  a criminal                                                                   
act for  a person to  refuse to talk to  a CSED officer.   He                                                                   
stressed that  in no other area,  would it be a  criminal act                                                                   
to  refuse  to  talk  about  a subject.    He  added  if  the                                                                   
Department of Law  does not approve of Amendment  #1, then he                                                                   
would MOVE to strike Section #A.                                                                                                
                                                                                                                                
Ms. Carpeneti  agreed with  Representative Croft  that people                                                                   
should have the  right to say that they do not  want to talk.                                                                   
However, Paragraph B only applies  to employers regarding the                                                                   
information  about  health benefits.    It  would not  be  an                                                                   
"across the  board duty"  of the employers  to report  to the                                                                   
Department of Labor  & Workforce Development when  there is a                                                                   
new hire.  She recommended that it be adjusted.                                                                                 
                                                                                                                                
Representative Croft WITHDREW Amendment #1.                                                                                     
                                                                                                                                
                                                                                                                                
TAPE HFC 04 - 65, Side A                                                                                                      
                                                                                                                                
                                                                                                                                
Representative Croft  MOVED to ADOPT Amendment #2.   (Copy on                                                                   
File).    Co-Chair  Williams  OBJECTED  for  the  purpose  of                                                                   
discussion.                                                                                                                     
                                                                                                                                
Representative Croft  stated that the amendment  would delete                                                                   
all material on Page 4, Lines  16-28 and add a new section to                                                                   
read:    "AS  12.55.139  is repealed".    He  explained  that                                                                   
federal law  requires the taking  of the hunting  and fishing                                                                   
license as  a sanction.   Amendment #2  would remove it  as a                                                                   
sanction for the misdemeanor and  keeps it as a sanction only                                                                   
for a felony.                                                                                                                   
                                                                                                                                
JOHN  MAIN, STAFF,  REPESENTATIVE  SPEAKER  PETT KOTT,  noted                                                                   
that  when the  license issue  was mandated  for the  states,                                                                   
Alaska  choose  the  proposed  way  to  address  hunting  and                                                                   
fishing  licenses.   There is  no vehicle in  which they  can                                                                   
deny a  hunting or fishing  license.  Federal  government was                                                                   
not pleased  that it was placed  in those two statutes.   Mr.                                                                   
Main feared that  if it was removed from a  misdemeanor area,                                                                   
the  federal government  might state  that Alaska  is not  in                                                                   
compliance with the plan and the  State could face penalties.                                                                   
                                                                                                                                
In  response to  a question  by  Representative Stoltze,  Mr.                                                                   
Main stated that he did not know  if any states had failed to                                                                   
comply  with the  federal requirements  to take  recreational                                                                   
licenses for failure in providing child support.                                                                                
                                                                                                                                
Representative Stoltze commented  on the similarities between                                                                   
this and the  federal helmet laws.  He stressed  that hunting                                                                   
and fishing licenses are more  than recreational pleasures in                                                                   
Alaska.  He voiced his support for the amendment.                                                                               
                                                                                                                                
In response to  a query by Representative Chenault,  Mr. Main                                                                   
pointed out that  only 2-5 people have been  convicted in the                                                                   
past two years  and that he did  not know how many  had their                                                                   
recreational licenses removed.                                                                                                  
                                                                                                                                
JOHN   MALLONEE,  (TESTIFIED   VIA  TELECONFERENCE),   ACTING                                                                   
DIRECTOR, CHILD  SUPPORT ENFORCEMENT DIVISION,  DEPARTMENT OF                                                                   
REVENUE, ANCHORAGE, provided information  on the legislation.                                                                   
He did  not recall any  cases being revoked  in the  past two                                                                   
years, noting that  only twenty cases had been  prosecuted in                                                                   
the past four years.  Mr. Main  pointed out that the language                                                                   
uses "may", which is more permissive.                                                                                           
                                                                                                                                
Representative  Croft testified in  support of Amendment  #2.                                                                   
He stressed that the connection  with subsistence hunting and                                                                   
fishing,  maintaining that  licenses should  only be  revoked                                                                   
for serious felony  cases.  He did not feel  that the federal                                                                   
government  would   withhold  funds,  but  argued   that  the                                                                   
decision should be  made to flow through the  correct course,                                                                   
regardless.                                                                                                                     
                                                                                                                                
Co-Chair  Harris noted  that the  amendment  would repeal  AS                                                                   
12.55.139.  Representative Croft  explained that the deletion                                                                   
of  the  statute  would  only  remove  the  ability  to  take                                                                   
recreational  licenses  in  a  misdemeanor  case.    Co-Chair                                                                   
Williams  interjected  that nonpayment  of  child support  is                                                                   
close to being a felony.                                                                                                        
                                                                                                                                
Representative  Stoltze  reminded   members  that  there  are                                                                   
"cashless  economies" in rural  Alaska. He  did not  want the                                                                   
federal government to deter the  adoption of a rational State                                                                   
policy.                                                                                                                         
                                                                                                                                
Representative  Hawker stated that  any refusal to  pay child                                                                   
support  is an  egregious act.   He  noted that  recreational                                                                   
licenses are of value as a non-monetary  item and valuable to                                                                   
the perpetrator; whereas, great  monetary fines would further                                                                   
restrict their ability to pay.                                                                                                  
                                                                                                                                
In  response to  Vice  Chair Meyer,  Mr.  Main observed  that                                                                   
discussions had  occurred in  the House Judiciary  Committee,                                                                   
and that the felony level had been increased.                                                                                   
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR:      Stoltze, Croft, Fate, Foster, Joule                                                                              
OPPOSED:       Chenault, Hawker, Meyer, Williams, Harris                                                                        
                                                                                                                                
Representative Moses was not present for the vote.                                                                              
                                                                                                                                
The MOTION FAILED (5-5).                                                                                                        
                                                                                                                                
SPEAKER PETE  KOTT distributed a  handout in response  to the                                                                   
testimony  provided   by  Landa  Baily,   Special  Assistant,                                                                   
                                 th                                                                                             
Department  of Revenue,  March  8,  2004  letter.   (Copy  on                                                                   
File).  [It was not discussed].                                                                                                 
                                                                                                                                
Co-Chair  Harris MOVED  to  report  CS HB  514  (FIN) out  of                                                                   
Committee  with  individual  recommendations   and  with  the                                                                   
accompanying fiscal notes.  There  being NO OBJECTION, it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
CS  HB  514   (FIN)  was  reported  out  of   Committee  with                                                                   
"individual recommendations"  and with  a new fiscal  note by                                                                   
the Department of  Revenue, a zero note by  the Department of                                                                   
Public  Safety,   two  zero  notes   by  the   Department  of                                                                   
Administration,  indeterminate note  #2 by  the Alaska  Court                                                                   
System and indeterminate note #3 by the Department of Law.                                                                      
                                                                                                                                
HOUSE BILL NO. 424                                                                                                            
                                                                                                                                
     An Act relating to review of regulations under the                                                                         
     Administrative Procedure Act by the Legislative Affairs                                                                    
     Agency; and providing for an effective date.                                                                               
                                                                                                                                
BARBARA COTTING,  STAFF, REPRESENTATIVE  JIM HOLM,  testified                                                                   
that HB 424 requires legislative  legal review of regulations                                                                   
before they are  finalized.  Under current statute,  only the                                                                   
Attorney General  formally reviews  proposed regulations  and                                                                   
the review  comes late  in the  process, when public  comment                                                                   
has  already  been  closed.     After  the  Attorney  General                                                                   
approves proposed  regulations, they  are transmitted  to the                                                                   
Lt. Governor's office, where they  are seldom changed and the                                                                   
public  then becomes  justifiably  frustrated  when they  see                                                                   
regulations  adopted  that are  different  from  the ones  in                                                                   
which they commented.                                                                                                           
                                                                                                                                
Ms. Cotting stated  that under HB 424,  legislative attorneys                                                                   
who actually draft  the bills would review  regulations being                                                                   
promulgated from those bills.   By working cooperatively with                                                                   
the Attorney  General's office, differences of  opinion could                                                                   
be worked out before the regulations  were finalized.  In the                                                                   
event  that  differences   could  not  be  worked   out,  the                                                                   
Legislature would have the opportunity  for input.  She added                                                                   
that  the overall  impact  to the  State's  economy would  be                                                                   
positive.    Adding  legislative  review  to  the  regulation                                                                   
process would:                                                                                                                  
                                                                                                                                
   · Help eliminate conflicts,                                                                                                  
   · Create a more stable business environment, and                                                                             
   · Increase the public's trust in government.                                                                                 
                                                                                                                                
Co-Chair Harris  questioned the  comment made by  Ms. Cotting                                                                   
that the Legislature  does not have the  constitutional legal                                                                   
authority  to abolish  regulations.   Ms.  Cotting  responded                                                                   
that they  do not  by statute.   Co-Chair Harris  stated that                                                                   
the Legislature  has the  authority to  place regulations  in                                                                   
statute.   He  understood  that  the legislation  would  have                                                                   
another group  write regulations for  the bills passed.   Ms.                                                                   
Cotting  corrected, indicating  that the  bill would  provide                                                                   
for an  attorney in  Legislative Legal  and Research  Service                                                                   
Division, who would review regulations  by the agencies.  She                                                                   
pointed  out that  Tam Cook,  the  director from  Legislative                                                                   
Legal,  had submitted  a fiscal  note for the  scope of  that                                                                   
work  in the  amount of  $98 thousand  dollars, covering  the                                                                   
cost for one attorney position.                                                                                                 
                                                                                                                                
Ms. Cotting  acknowledged that the  action would be  a policy                                                                   
call.  The legislative  intent causes much to  litigate.  Co-                                                                   
Chair   Harris  asked   the   legal  ramifications   of   the                                                                   
Legislature writing its own regulations  without the input of                                                                   
the  Administration.   He  asked  what  would happen  if  the                                                                   
Legislature took over that entire function.                                                                                     
                                                                                                                                
DEBORAH   BEHR,  ASSISTANT   ATTORNEY  GENERAL,   REGULATIONS                                                                   
ATTORNEY,  DEPARTMENT  OF  LAW, commented  the  problem  with                                                                   
having the Legislature providing  the "nuts and bolts" of the                                                                   
regulations  is that  the Legislature  is not  around for  so                                                                   
many months of the year.  She  understood why the Legislature                                                                   
did not  want to delegate the  work to the  Executive Branch,                                                                   
which attempts  to fill  in the  blanks in  statute.   If the                                                                   
Legislature  wants  to write  their  own regulations,  it  is                                                                   
legal  and  constitutional   but  it  would   mean  that  the                                                                   
Legislature  would  have  to do  much  more  substantial  and                                                                   
detailed work for the individual statutes.                                                                                      
                                                                                                                                
Co-Chair Harris  complained that  one of  the issues  is that                                                                   
the   Legislature    writes   legislation   and    then   the                                                                   
Administration writes regulations  that affect their point of                                                                   
view,  which  happens too  often.    He emphasized  that  was                                                                   
frustrating.     Then  the  Legislature   has  to   pass  new                                                                   
legislation  to make  the original  intent clear.   Ms.  Behr                                                                   
pointed  out that  one of  the  goals of  the proposed  bill,                                                                   
itemized  on Page  3, Lines 8-12,  was to  have the  assigned                                                                   
attorney notify  various bodies in the Legislature  to review                                                                   
and provide additional legislative  oversight.  The framework                                                                   
in the bill is designed to facilitate the oversight.                                                                            
                                                                                                                                
Co-Chair   Williams  asked   if  she   was  referencing   the                                                                   
Legislative Regulation Review  Committee.  Ms. Behr responded                                                                   
that the Legislative  Review Committee has an  active role in                                                                   
the HB 424.                                                                                                                     
                                                                                                                                
DAVE   STANCLIFF,   REGULATION   REVIEW   COMMITTEE,   STAFF,                                                                   
REPRESENTATIVE  PETE KOTT,  informed  members that  Minnesota                                                                   
co-writes regulation  with their Administration.   That state                                                                   
has fewer  conflicts than  experienced  by Alaska.   Colorado                                                                   
has a  Regulation Review  Committee and  the drafters,  track                                                                   
legislation and watch for when  the regulations are put forth                                                                   
and  then  highlight  specific problems  for  the  Regulation                                                                   
Review  Committee.    That  check   and  balance  provides  a                                                                   
screening  process to let  the legislators  know if  there is                                                                   
anything  wrong.   Because  of the  threat  of the  screening                                                                   
process, the regulation  writers are more precise  in writing                                                                   
regulations.  The Courts have  found that the legislature has                                                                   
limited  ability  to  change regulations  once  they  are  in                                                                   
place.   The  bill  provides an  outline on  how  to build  a                                                                   
cooperative partnership and helps  to determine if the number                                                                   
of regulation concerns could be reduced.                                                                                        
                                                                                                                                
In  response   to  Co-Chair   Harris  query,  Mr.   Stancliff                                                                   
indicated that he has been involved  in the Regulatory Review                                                                   
Committee,  consisting of a  staff of  one.  Co-Chair  Harris                                                                   
asked if  it would be prudent  to have the  Committee consist                                                                   
of  an  attorney   as  the  staff  person.     Mr.  Stancliff                                                                   
acknowledged  that  was  a possibility.    Each  legal  realm                                                                   
within the process has to develop  it's own "flavor" and that                                                                   
would be  the choice of the  Legislature whether to  hire the                                                                   
attorney.  He pointed out that  Legislative Legal Agency is a                                                                   
non-partisan  and  credible  process.    In  good  government                                                                   
reform, it is important to look  at something that serves any                                                                   
philosophy well over time.                                                                                                      
                                                                                                                                
Representative  Foster  referenced  the $98  thousand  dollar                                                                   
fiscal note.   He requested to  add his name as  a co-sponsor                                                                   
of the bill.                                                                                                                    
                                                                                                                                
Ms. Behr pointed out that hiring  a professional editor costs                                                                   
a lot more than the services associated  with Legal Services.                                                                   
                                                                                                                                
Representative  Stoltze  stated  that  no matter  who  is  in                                                                   
office, there must be a 2/3 majority  to repeal a resolution.                                                                   
He did not  know what the  solution should be to  address the                                                                   
concerns of  the proposed  legislation.   It is difficult  to                                                                   
micromanage each issue.                                                                                                         
                                                                                                                                
Representative   Hawker   shared   Representative   Stoltze's                                                                   
concern  with the  legislation.   He  was  troubled with  the                                                                   
Department  of   Health  &   Social  Services  fiscal   note,                                                                   
indicating significant  costs to  that Department.   They are                                                                   
working  diligently  on  regulations to  improve  their  cost                                                                   
efficiencies   and  unnecessary   delays   could  result   in                                                                   
continued expenditures.                                                                                                         
                                                                                                                                
Ms. Cotting pointed out that two  of the fiscal notes are out                                                                   
dated and  address earlier  versions of the  bill.   The only                                                                   
note that is current is the one  from the Legislative Affairs                                                                   
Agency.   She believed  that the  narrative would be  changed                                                                   
for the  other two notes.   There would be no  mandated delay                                                                   
with passage of the bill.                                                                                                       
                                                                                                                                
Mr. Stancliff  pointed out that  there are two  provisions in                                                                   
the bill that explicitly state  that nothing that Legislative                                                                   
Legal does will hold up the process  in any way.  It would be                                                                   
a constitutional  separation  of powers.   The  bill and  the                                                                   
principal  of it are  based to  tie into  two other  measures                                                                   
that will  come before the House  Finance Committee.   HB 242                                                                   
addresses  the "front-end"  into the  regulatory process,  HB                                                                   
203 deals with the center of the  adjudication process and HB                                                                   
424 creates the safety valve at the end of the process.                                                                         
                                                                                                                                
PAM  LABOLLE,  ALASKA  STATE  CHAMBER  OF  COMMERCE,  JUNEAU,                                                                   
voiced strong  support for  the proposed  bill.  With  40,000                                                                   
regulations  in Alaska  and 93% of  all regulations  proposed                                                                   
becoming law, it  is important for business  to watch exactly                                                                   
how regulations  are formed, enforced and reviewed  to ensure                                                                   
we are able  to navigate the system.  Senator  Therriault has                                                                   
introduced  a  three-tier  package on  regulatory  reform  to                                                                   
render the system more efficient and flexible.                                                                                  
                                                                                                                                
The three bills are:                                                                                                            
                                                                                                                                
   ·    SB 203, Fair Hearing Bill                                                                                               
   ·    SB 287, Legislative Legal Review of Proposed                                                                            
        Regulations, and                                                                                                        
   ·    SB 333, Judicial Extraction from Administrative                                                                         
        Review.                                                                                                                 
                                                                                                                                
Currently,   State   agencies    that   write   and   enforce                                                                   
administrative law  also hear complaints against  those laws.                                                                   
HB  424 provides  a  fix for  the  system by  separating  the                                                                   
administrative adjudication  process from the  agencies.  The                                                                   
bill  creates  a central  hearing  panel that  gives  hearing                                                                   
officers a more independent and  protected station from which                                                                   
to  deliver timely  due process  through  fair and  objective                                                                   
hearings,   thereby,   creating   an   efficient   and   more                                                                   
professional administrative hearing process.  Initial start-                                                                    
up costs would be recouped and significant savings would                                                                        
accrue through the efficiencies.  The reductions in time due                                                                    
to the efficiencies would reduce costs to businesses.                                                                           
                                                                                                                                
Co-Chair Williams stated that HB 424 would be HELD in                                                                           
Committee for further consideration.                                                                                            
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 4:28 P.M.                                                                                          
                                                                                                                                
                                                                                                                                

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