Legislature(2013 - 2014)HOUSE FINANCE 519

03/03/2014 08:30 AM FINANCE

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                  HOUSE FINANCE COMMITTEE                                                                                       
                       March 3, 2014                                                                                            
                         8:33 a.m.                                                                                              
8:33:51 AM                                                                                                                    
CALL TO ORDER                                                                                                                 
Co-Chair Stoltze called the House Finance Committee meeting                                                                     
to order at 8:33 a.m.                                                                                                           
MEMBERS PRESENT                                                                                                               
Representative Alan Austerman, Co-Chair                                                                                         
Representative Bill Stoltze, Co-Chair                                                                                           
Representative Mia Costello                                                                                                     
Representative Bryce Edgmon                                                                                                     
Representative David Guttenberg                                                                                                 
Representative Lindsey Holmes                                                                                                   
Representative Cathy Munoz                                                                                                      
Representative Tammie Wilson                                                                                                    
MEMBERS ABSENT                                                                                                                
Representative Mark Neuman, Vice-Chair                                                                                          
Representative Les Gara                                                                                                         
Representative Steve Thompson                                                                                                   
ALSO PRESENT                                                                                                                  
Representative Mike  Chenault; Dan Stickel,  Assistant Chief                                                                    
Economist,  Tax Division,  Department of  Revenue; Christine                                                                    
Marasigan, Staff,  Senator Kevin Meyer; Nancy  Sutch, Deputy                                                                    
Director,  Division   of  Personnel  and   Labor  Relations,                                                                    
Department of Administration.                                                                                                   
HB 305    JUNK DEALER & METAL SCRAPPER LICENSING                                                                                
          HB 305 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
SB 125    REJECT RECOMMENDATION OF COMP. COMMISSION                                                                             
          SB 125 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
HOUSE BILL NO. 305                                                                                                            
     "An Act repealing the requirement that a junk dealer                                                                       
     or metal scrapper obtain a license."                                                                                       
8:34:26 AM                                                                                                                    
AT EASE                                                                                                                         
8:34:48 AM                                                                                                                    
8:35:49 AM                                                                                                                    
REPRESENTATIVE MIKE CHENAULT, introduced  HB 305 and related                                                                    
that it was  a small piece of legislation  that helped clean                                                                    
up  the  books.  He  explained that  the  bill  removed  the                                                                    
statute  AS  08.60.010,  which required  the  Department  of                                                                    
Revenue  (DOR)  to  issue  an  annual  license  for  persons                                                                    
engaged in  the business of  junk dealer or  metal scrapper.                                                                    
He explained  that prior to  statehood, all the  duties that                                                                    
were associated with the issuance  of junk dealers' licenses                                                                    
had  resided in  the territorial  Department of  Finance and                                                                    
relayed that  the duties had  later been resumed by  DOR. He                                                                    
pointed out  that Legislative  Research Services  had stated                                                                    
that  under Section  10  of the  State  Organization Act  of                                                                    
1959,  the   authority  and   functions  performed   by  the                                                                    
Department of  Taxation, the commissioner of  the Department                                                                    
of Taxation, the Department of  Finance, the director of the                                                                    
Department of  Finance, and the treasurer  of the Department                                                                    
of  Finance had  all been  transferred to  DOR; however,  in                                                                    
Section  14 of  the same  act, the  Department of  Commerce,                                                                    
Community  and Economic  Development (DCCED)  was given  the                                                                    
responsibility to issue licenses  for businesses not covered                                                                    
or otherwise provided in the  act. He related that according                                                                    
to  Legislative Research  Services, the  duty for  licensing                                                                    
junk  dealers and  metal scrappers  was  performed by  DCCED                                                                    
even though  it was not  assigned to the  department because                                                                    
of the collection  of fees or because it  was overlooked. He                                                                    
stated  that there  was a  report from  Legislative Research                                                                    
Services  that provided  the history  and other  information                                                                    
that  related to  the licensing  of junk  dealers and  metal                                                                    
scrappers  within DOR  (copy on  file). He  stated that  the                                                                    
legislation  helped  clean  up   the  state's  statutes  and                                                                    
believed that it had no  fiscal impact because the licensing                                                                    
was currently being conducted under DCCED.                                                                                      
Co-Chair   Stoltze  inquired   if  Representative   Chenault                                                                    
foresaw  any  harmful impacts  on  the  health, welfare,  or                                                                    
commerce   of  the   state  as   a  result   of  the   bill.                                                                    
Representative Chenault replied in the negative.                                                                                
Co-Chair Stoltze noted that he  would like the department to                                                                    
comment on the record regarding  its position on the current                                                                    
Representative  Edgmon  agreed  with  the bill,  but  had  a                                                                    
question regarding  what was  included under  the definition                                                                    
of metal  scrapper. He inquired  if the definition  of metal                                                                    
scrapper  under the  legislation  included  people who  were                                                                    
dealing with  copper. Representative Chenault  believed that                                                                    
copper was included in the definition.                                                                                          
8:39:01 AM                                                                                                                    
Co-Chair Stoltze  indicated that the  bill would be  held in                                                                    
committee because of  potential issues and a  desire to take                                                                    
public testimony.                                                                                                               
DAN  STICKEL,  ASSISTANT   CHIEF  ECONOMIST,  TAX  DIVISION,                                                                    
DEPARTMENT OF  REVENUE, stated  that DOR  had looked  at its                                                                    
records back  to 1970  and related  that the  department had                                                                    
not  found an  instance of  it collecting  any revenue  from                                                                    
licenses for junk dealers  and metal scrappers; furthermore,                                                                    
no one in  the department was aware of  having collected the                                                                    
licenses. He added that DOR was not opposed to the bill.                                                                        
Co-Chair  Stoltze  inquired  if  there were  people  out  of                                                                    
compliance because  of the issue  and noted that  there were                                                                    
people selling scrap. Mr. Stickel  replied that the licenses                                                                    
were  collected  by DCCED  and  that  it appeared  that  the                                                                    
statute was an extraneous one that could be "scrapped."                                                                         
Co-Chair Stoltze CLOSED public testimony.                                                                                       
Co-Chair Stoltze noted that there  was interest in adding an                                                                    
amendment  to the  bill and  pointed  out that  it would  be                                                                    
incorporated  as a  CS.  He  wanted to  involve  all of  the                                                                    
committee  members  with  the proposal  and  give  people  a                                                                    
chance to look at it.                                                                                                           
8:41:09 AM                                                                                                                    
HB  305  was  HEARD  and   HELD  in  committee  for  further                                                                    
8:41:17 AM                                                                                                                    
AT EASE                                                                                                                         
8:41:36 AM                                                                                                                    
SENATE BILL NO. 125                                                                                                           
     "An Act  disapproving all recommendations of  the State                                                                    
     Officers  Compensation   Commission  relating   to  the                                                                    
     salaries  of  state  officers;  and  providing  for  an                                                                    
     effective date."                                                                                                           
8:41:52 AM                                                                                                                    
CHRISTINE MARASIGAN, STAFF,  SENATOR KEVIN MEYER, introduced                                                                    
SB 125 and  related that it would reject  the State Officers                                                                    
Compensation  Commission's recommendations  (copy on  file).                                                                    
She  pointed   out  that  according  AS   39.23.540(d),  the                                                                    
legislature   had  60   days  to   accept   or  reject   the                                                                    
recommendation once  a final report from  the State Officers                                                                    
Compensation Commission  was received.  She stated  that the                                                                    
legislature had  received the final  report on  January 30th                                                                    
of the current year, which  gave the legislature until March                                                                    
31  to accept  or reject  the recommendations.  She observed                                                                    
that  the fiscal  note  was  zero, but  that  the Office  of                                                                    
Management    and   Budget    had   calculated    that   the                                                                    
recommendations by  the commission for salary  increases for                                                                    
the governor,  lieutenant governor, and  commissioners would                                                                    
add  approximately  $227,515  in  costs  for  FY15;  if  the                                                                    
legislature   did  not   reject  the   recommendations,  the                                                                    
increases would  come into  effect at  the beginning  of the                                                                    
fiscal  year in  July. She  offered that  the timing  of the                                                                    
report  to increase  salaries was  unfortunate and  believed                                                                    
that Rick Halford was online to answer questions.                                                                               
Co-Chair Stoltze  noted that Mr.  Halford was not  signed up                                                                    
to testify online.                                                                                                              
Representative   Wilson   referenced  the   State   Officers                                                                    
Compensation  Commission's  recommendations. She  noted  the                                                                    
line for $146,142.67 and inquired  if commissioners would be                                                                    
set  back at  that point.  She  stated that  the bill  would                                                                    
reject  the recommendations  and inquired  if they  had been                                                                    
rejected  in  the  past.  She   further  queried  where  the                                                                    
commissioners  were  on the  schedule  in  the findings  and                                                                    
recommendations  of the  commission. Ms.  Marasigan deferred                                                                    
the question to the administration.                                                                                             
NANCY  SUTCH, DEPUTY  DIRECTOR,  DIVISION  OF PERSONNEL  AND                                                                    
LABOR  RELATIONS,  DEPARTMENT OF  ADMINISTRATION,  responded                                                                    
that  the  governor's  current   salary  was  $145,000,  the                                                                    
lieutenant   governor's  salary   was  $115,000,   and  that                                                                    
commissioners were paid $136,350.                                                                                               
Representative Wilson noted  that commissioners were getting                                                                    
paid  $136,350 and  inquired  when the  last  time they  had                                                                    
received a  pay raise was.  Ms. Sutch replied that  the last                                                                    
salary  increase for  the governor  and lieutenant  governor                                                                    
was  on  July  1,   2011;  however,  the  commissioners  had                                                                    
received a 1  percent increase that was effective  in July 1                                                                    
2013 through SB 95.                                                                                                             
Co-Chair Stoltze  mentioned that SB  95 had also  taken care                                                                    
of the judges.                                                                                                                  
Representative  Edgmon assumed  that  the justification  for                                                                    
the bill  would be proffered  at some point and  inquired if                                                                    
there was anyone who was in opposition to the legislation.                                                                      
Co-Chair   Stoltze  suspected   that   the  State   Officers                                                                    
Compensation Commission had determined  the decision in good                                                                    
faith and  noted that  no one could  be compelled  to appear                                                                    
before  the  committee. He  did  not  want to  begrudge  the                                                                    
decisions of  the commission other than  the policy decision                                                                    
of the  committee that  might be  different. He  stated that                                                                    
the  commission had  made their  recommendation and  that he                                                                    
did not  know if the  committee needed to  compel volunteers                                                                    
to  testify.  He  added that  the  commission's  report  was                                                                    
available for the committee to look at.                                                                                         
8:47:24 AM                                                                                                                    
Representative Edgmon  stated that his question  was offered                                                                    
because it appeared that the bill had widespread support.                                                                       
Co-Chair  Stoltze thought  that  the governor  had come  out                                                                    
against his  own salary increase and  that the commissioners                                                                    
had publicly fallen in line.                                                                                                    
Representative  Guttenberg queried  if  there  would be  any                                                                    
changes   to   the   current    salary   schedule   if   the                                                                    
recommendations   of  the   commission  were   rejected;  he                                                                    
inquired if there  were any cost of living  increases or pay                                                                    
differentials  in place  currently. Ms.  Sutch replied  that                                                                    
the commissioners would receive  a 1 percent salary increase                                                                    
effective  July 1  of the  current year,  as well  as a  2.5                                                                    
percent increase in July of 2015.                                                                                               
Co-Chair  Stoltze inquired  if the  commissioners' increases                                                                    
would occur  if the recommendations were  rejected. Ms. Such                                                                    
replied in the affirmative and  added that the increases for                                                                    
commissioners would  be given through  statutory provisions;                                                                    
however,  the lieutenant  governor  and  governor would  not                                                                    
receive any increases absent of the recommendations.                                                                            
Co-Chair Stoltze noted  that he was looking  at an amendment                                                                    
that   might   sunset   the  State   Officers   Compensation                                                                    
Commission. He  noted that the  amendment would  not abolish                                                                    
the commission, but would give  the legislature some time to                                                                    
see if it  should be in existence. He noted  that he was not                                                                    
an advocate of abolishing the  commission, but that the idea                                                                    
would  be  thrown around;  he  thought  that the  issue  had                                                                    
become political.  He observed  that he  wanted to  hold the                                                                    
bill to properly  draft an amendment. He  reiterated that he                                                                    
did  not   want  to  eliminate   the  commission   with  the                                                                    
amendment,  but that  he wanted  to  give some  deliberation                                                                    
regarding whether it should continue to exist.                                                                                  
Representative Guttenberg  inquired if Mr. Halford  would be                                                                    
online  for  testimony  when the  committee  worked  on  the                                                                    
amendment.  Co-Chair Stoltze  responded  that the  committee                                                                    
could invite  Mr. Halford, but  that he was a  volunteer and                                                                    
might have other things to do in his workday.                                                                                   
8:50:18 AM                                                                                                                    
Co-Chair  Austerman  thought  that rather  than  sunset  the                                                                    
commission,  the  committee   could  consider  changing  the                                                                    
timeline of the commission's report  from every two years to                                                                    
every  five   years.  Co-Chair  Stoltze  replied   that  the                                                                    
committee could  deliberate on  the issue  further; however,                                                                    
given the timeline  with the bill, he wanted to  pass it out                                                                    
of  committee  in the  current  week.  He thought  that  the                                                                    
committee had  enough time  to be  deliberative on  the bill                                                                    
and  opined that  there was  a lot  of support  to pass  the                                                                    
legislation as it  was written. He wanted to  make sure that                                                                    
citizens were  out there  doing this  work, but  wondered if                                                                    
the  commission was  something that  needed  to continue  to                                                                    
exist in the current environment.                                                                                               
Representative Holmes  liked Co-Chair Austerman's  idea that                                                                    
it  might  not  be  necessary to  have  the  State  Officers                                                                    
Compensation  Commission report  every  two  years and  that                                                                    
perhaps the work could be done every five years.                                                                                
8:51:52 AM                                                                                                                    
Co-Chair Stoltze  noted that  both SB 125  and HB  305 could                                                                    
have easily  passed committee, but  thought that  there were                                                                    
other issues that should be  addressed on the both pieces of                                                                    
legislation. He  noted that the  both of the bills  would be                                                                    
brought back before the committee in the very near future.                                                                      
Co-Chair Stoltze CLOSED public testimony on SB 125.                                                                             
Representative  Holmes  inquired  if Mr.  Halford  had  been                                                                    
online for questions only. Co-Chair  Stoltze replied that he                                                                    
had not  been online and  that it had been  speculation that                                                                    
he was.                                                                                                                         
SB  125  was  HEARD  and   HELD  in  committee  for  further                                                                    
Co-Chair   Austerman  discussed   the  following   meeting's                                                                    
8:53:17 AM                                                                                                                    
The meeting was adjourned at 8:53 a.m.                                                                                          

Document Name Date/Time Subjects
SB 125 ADN article.pdf HFIN 3/3/2014 8:30:00 AM
SB 125
SB 125 Sponsor Statement.pdf HFIN 3/3/2014 8:30:00 AM
SB 125
HB 305 Dept. of Revenue Research.pdf HFIN 3/3/2014 8:30:00 AM
HB 305
Sponsor Statement-HB 305.pdf HFIN 3/3/2014 8:30:00 AM
HB 305
HB 305 Junk Car Statute.pdf HFIN 3/3/2014 8:30:00 AM
HB 305
HB 305 Leg Research-Junk Dealers.pdf HFIN 3/3/2014 8:30:00 AM
HB 305
Findings and Recommendations 2014.pdf HFIN 3/3/2014 8:30:00 AM
SB 125