Legislature(1993 - 1994)
03/15/1994 03:00 PM House L&C
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE LABOR AND COMMERCE
STANDING COMMITTEE
March 15, 1994
3:00 p.m.
MEMBERS PRESENT
Rep. Bill Hudson, Chairman
Rep. Joe Green, Vice Chairman
Rep. Brian Porter
Rep. Eldon Mulder
Rep. Bill Williams
Rep. Joe Sitton
MEMBERS ABSENT
Rep. Jerry Mackie
COMMITTEE CALENDAR
*HB 453: "An Act amending the motor fuel tax to establish a
different tax levy on residual fuel oil used in
and on watercraft; and providing for an effective
date."
PASSED FROM COMMITTEE
*HB 290: "An Act exempting certain sports officials from
workers' compensation coverage."
PASSED FROM COMMITTEE
*HB 487: "An Act relating to the sale, display, or
distribution of material harmful to minors at
places where minors are present or allowed to be
present and where minors are able to view such
material; and prohibiting the sale or display of
certain audio recordings, phonograph records,
magnetic tapes, compact discs, or videotapes,
without warning labels and opaque wrappings."
HEARD AND HELD IN COMMITTEE
(* First public hearing.)
WITNESS REGISTER
REP. GARY DAVIS
Alaska State Legislature
State Capitol
Juneau, Alaska 99801-1182
465-2693
Position Statement: Sponsor of HB 453
C.J. ZANE
Holland America Lines
880 H Street, Suite 200-A
Anchorage, Alaska 99501-3400
274-9019
Position Statement: Supported HB 453
(Spoke via teleconference)
BERNIE SMITH
Tesoro
P.O. Box 3369
Kenai, Alaska 99611
776-8191
Position Statement: Supported HB 453
(Spoke via teleconference)
JAMES BURNS
Petro Marine
3111 C Street
Anchorage, Alaska 99503
562-5000
Position Statement: Supported HB 453
CHRIS GATES, Director
Division of Economic Development
Department of Commerce and Economic Development
P.O. Box 110804
Juneau, Alaska 99811-0804
465-2017
Position Statement: Supported HB 453
ROBERT ERICKSON
Teamsters Local 959
306 Willoughby Ave.
Juneau, Alaska 99801
586-3225
Position Statement: Supported HB 453
KENT DAWSON, Lobbyist
P.O. Box 20790
Juneau, Alaska 99802
463-2533
Position Statement: Supported HB 453
BEN ESCH
310 K, #709
Anchorage, Alaska 99501
276-6131
Position Statement: Supported HB 290
(Spoke via teleconference)
BRUCE KREMENER
3327 Moorewalk Rd.
North Pole, Alaska 99705
488-7964
Position Statement: Supported HB 290
(Spoke via teleconference)
DON SHANNON
232 Bentley Drive
Fairbanks, Alaska 99701
Position Statement: Supported HB 290
(Spoke via teleconference)
BILL BRODERSON
1612 Madison Dr.
Fairbanks, Alaska 99709
479-0270
Position Statement: Supported HB 290
(Spoke via teleconference)
MIKE BORGEFORD
1801 Parks Highway
Wasilla, Alaska 99654
373-5276
Position Statement: Supported HB 290
(Spoke via teleconference)
BOB SIMS
P.O. Box 240024
Douglas, Alaska 99824
364-2316
Position Statement: Supported HB 290
JACK PHELPS, Staff
Rep. Pete Kott
Alaska State Legislature
State Capitol
Juneau, Alaska 99801-1182
465-3777
Position Statement: Presented HB 487
REED STOOPS, Lobbyist
Motion Picture Association
240 Main Street #600
Juneau, Alaska 99801
463-3223
Position Statement: Opposed HB 487
PREVIOUS ACTION
BILL: HB 453
SHORT TITLE: TAX ON RESIDUAL MARINE FUEL OIL
SPONSOR(S): REPRESENTATIVE(S) G.DAVIS
JRN-DATE JRN-PG ACTION
02/09/94 2316 (H) READ THE FIRST TIME/REFERRAL(S)
02/09/94 2316 (H) L&C, STATE AFFAIRS, FINANCE
03/15/94 (H) L&C AT 03:00 PM CAPITOL 17
BILL: HB 290
SHORT TITLE: EXEMPT SPORTS OFFICIALS FROM WORKERS COMP
SPONSOR(S): REPRESENTATIVE(S) MULDER
JRN-DATE JRN-PG ACTION
04/22/93 1430 (H) READ THE FIRST TIME/REFERRAL(S)
04/22/93 1431 (H) L&C, STATE AFFAIRS
03/15/94 (H) L&C AT 03:00 PM CAPITOL 17
BILL: HB 487
SHORT TITLE: SALE/DISPLAY OF MATERIAL HARMFUL TO MINOR
BILL VERSION: SSHB 487
SPONSOR(S): REPRESENTATIVE(S) KOTT
JRN-DATE JRN-PG ACTION
02/14/94 2379 (H) READ THE FIRST TIME/REFERRAL(S)
02/14/94 2379 (H) LABOR & COMMERCE, JUDICIARY,
FINANCE
02/24/94 2522 (H) SPONSOR SUBSTITUTE
INTRODUCED-REFERRALS
02/24/94 2522 (H) LABOR & COMMERCE, JUDICIARY,
FINANCE
03/15/94 (H) L&C AT 03:00 PM CAPITOL 17
ACTION NARRATIVE
TAPE 94-23, SIDE A
Number 001
CHAIRMAN HUDSON convened the meeting at 3:10 p.m.
HB 453 - TAX ON RESIDUAL MARINE FUEL OIL
Number 070
REP. GARY DAVIS, Prime Sponsor of HB 453, presented the
following sponsor statement on HB 453:
House Bill 453 is simple, straight forward legislation.
House Bill 453 will attempt to create an equal playing field
between Alaska's residual fuel oil industry and their
counterparts in the Lower 48 and Canada.
Residual fuel oil is the residue from crude oil after the
light oils, gasoline, naphtha, kerosine, and mid-
distillates, are extracted in the refining process. The
only applications for residual fuel oil in Alaska are
asphalt, cruise ship fuel and reinjection into the pipeline.
This product is subject to the state's motor fuel tax. The
tax rate for residual fuel oil is five cents per gallon.
As a result of the current rate of taxation on this product,
Alaska's residual fuel oil is automatically noncompetitive
with the same product available elsewhere. The cruise ship
industry is the prime potential market for this fuel oil.
However, even though many ships cruise Alaska waters during
the summer, minimal quantities of this extremely tax
sensitive fuel oil are purchased in Alaska. Consequently,
the state receives minimal revenue from the tax.
House Bill 453 will reduce the tax rate levied on the sale
of residual fuel oil, which will stimulate sales of residual
fuel oil and benefit Alaska's economy. This legislation
will increase job opportunities in the trucking and fuel
industries. Simultaneously, state revenues will likely
remain consistent and possibly increase.
Number 170
REP. GREEN asked if the market would grow if the tax is
lowered.
Number 180
REP. DAVIS replied that he expected the market to grow as
the cruise lines want to do business in Alaska.
Number 220
REP. PORTER asked if it would be an advantage to the state
to get commitments from the cruise lines.
Number 232
REP. DAVIS replied that it would be to the advantage of the
state to get commitments, but the cruise lines have been
resistent to that.
Number 238
REP. PORTER answered that the legislature could be resistent
to lowering prices also.
Number 240
REP. DAVIS stated that the statute does provide for a sunset
provision.
Number 247
C.J. ZANE, Director of Government and Community Relations
for Holland America Lines/West Tours, Inc., testified via
teleconference in support of HB 453. Mr. Zane stated that
Holland America Lines supported the concept of the bill,
which is to make Alaska products competitive on the world
market.
MR. ZANE stated that it is understandable that the committee
would want some commitment from the cruise lines regarding
amounts of fuel purchased, but that would be difficult
because price is not the only consideration in deciding
whether or not to purchase in Alaska. Another consideration
is the time the cruise line has for bunkering in the various
ports. An additional consideration is the availability of
supply which can be affected by weather.
Number 330
BERNIE SMITH, Tesoro, testified via teleconference in
support of HB 453. Mr. Smith stated that last year Tesoro
had over 6.5 million barrels of No. 6 fuel oil that had to
be shipped out. He said that currently only about 1-1/2
percent of that is being sold to the cruise ship industry.
MR. SMITH stated that HB 453 would produce a number of jobs
and revenue for the Kenai Peninsula.
Number 355
REP. GREEN commented that Tesoro will be saving money since
they won't have to ship out the large amounts of No. 6 oil
if HB 453 passed, so the state and Tesoro should share the
cost.
Number 367
MR. SMITH responded that Tesoro's residual is already a loss
that they couldn't lower their price any more. He added
that they do not have the option of putting their fuel back
into the pipeline.
Number 377
CHAIRMAN HUDSON asked Mr. Smith if Tesoro paid any tax on
residual fuel that was being shipped out.
Number 382
MR. SMITH responded no.
Number 385
CHAIRMAN HUDSON asked how many jobs this decrease in tax
would result in.
Number 389
MR. SMITH answered twelve jobs.
Number 394
JAMES BURNS, Senior Vice President, Petro Marine, testified
in support of HB 453. Mr. Burns explained the process of
making No. 6 oil and the costs involved.
MR. BURNS noted that no other states levy a tax on this oil.
Number 499
CHRIS GATES, Director, Division of Economic Development,
testified in support of HB 453. Mr. Gates stated that when
ships fuel up in either Sitka or Seward the local economy
benefits as the ship stays in port longer and passengers
spend more money.
MR. GATES read two sentences from a letter from Gary Paxon,
Administrator, Sitka:
"HB 453 is a very important issue to the City and Borough of
Sitka. If it passed we have a commitment from Pacific
Northern Oil to refuel cruise ships in Sitka. This will
create important jobs for our community and in the long term
will give us significant opportunities as a change port."
Number 521
REP. MULDER asked how long it takes to fuel up a ship.
Number 525
MR. GATES responded that it depended on how empty the ship
was. It could take anywhere from four hours to eight hours.
Number 528
ROBERT ERICKSON, Teamsters Union, testified in support of HB
453. He stated it is estimated that if this bill passes it
could mean up to fourteen new trucking jobs.
Number 550
KENT DAWSON, Princess Tours, testified in support of HB 453.
He stated that Princess Lines has stated in writing that at
least 1/3 of its fuel will be bought in Seward if this bill
is passed.
Number 569
REP. PORTER moved the "O" committee substitute. No
objections were heard; it was so ordered.
CHAIRMAN HUDSON asked the committee to look at an amendment
to tighten the definition of residual fuel oil.
Number 580
MR. BURNS offered Amendment 1: page 2, line 3, after "oil"
insert "otherwise known as No. 6 fuel oil" and on page 2,
line 6 after "viscosity" insert "rated by kinematic units."
TAPE 94-23, SIDE B
Number 023
REP. MULDER moved adoption of Amendment 1. No objections
were heard; it was so ordered.
REP. PORTER moved to pass CSHB 453(L&C) as amended out of
committee. No objections were heard; it was so ordered.
HB 290 - EXEMPT SPORTS OFFICIALS FROM WORKERS COMP
Number 060
REP. MULDER presented HB 290 and offered the following
sponsor statement:
Recently, the Department of Labor, Division of Workers
Compensation, has determined that amateur sports officials
must be covered by worker's compensation policies under a
ranking of extremely high risk. This decision, according to
sports officials' associations, will cause sports
organizations which contract with referees, time keepers,
and line judges, to pay anywhere between 17 and 54% of their
compensation for officiating to cover worker's compensation
premiums.
HB 290 is designed to eliminate this problem by exempting
amateur sports officials from worker's compensation coverage
as we do other contractual groups. Worker's compensation
laws were designed to provide medical and income replacement
for injured workers. Whereas few, if any, amateur sports
officials are injured while officiating, the current high
insurance premiums do not accurately reflect the amount of
risk they experience as officials.
HB 290 is supported by sporting associations, officials'
groups and officials themselves throughout the state.
Included in the packets are letters of support from these
groups.
This is a serious problem facing amateur sports in Alaska
and threatens their future existence. HB 290 will eliminate
this problem and allow the greatest number of people to play
and officiate the games that they love to be involved in.
Number 158
REP. SITTON asked if there was any position paper from the
Department of Labor.
Number 165
REP. MULDER responded no.
Number 179
REP. SITTON stated he sees a disturbing tendency by the
administration not to comment on legislation that affect the
people of Alaska.
Number 180
CHAIRMAN HUDSON noted that in the past the administration
has provided some statement of support or nonsupport on
bills.
Number 193
BEN ESCH testified via teleconference in support of HB 290.
Mr. Esch stated this bill is the result of an audit that
concluded that since the Anchorage softball association
contracted the umpires and they didn't have insurance the
association was to pay insurance.
MR. ESCH noted that the biggest problem he sees is the rates
charged by insurance companies.
MR. ESCH noted that local referees, umpires and time keepers
are being charged the same worker's compensation rates as
are being charged to major league baseball refs, umpires and
time keepers.
Number 285
BRUCE KREMENER testified via teleconference in support of HB
290. He added that the 17% rate is too high and will end up
shutting down amateur sports in Alaska.
Number 311
DON SHANNON testified via teleconference in support of HB
290. He stated that he referees as a hobby not for the
money, and the amount of insurance is too high for people
like him to continue.
Number 330
REP. SITTON asked Mr. Shannon if in his fifteen years of
experience had he ever seen anyone be injured.
Number 340
MR. SHANNON replied no.
Number 360
BILL BRODERSON testified via teleconference in support of HB
290. He stated that any raise in insurance will effectively
raise his rates to officiate. This will necessarily be born
out by the players.
Number 360
MIKE BORGEFORD, Mat-Su Softball Association, testified via
teleconference in support of HB 290. Mr. Borgeford stated
he is a player, sponsor, and has helped out with tournaments
in Mat-Su. He stated he supports the testimony of Mr. Esch
and Mr. Kremener.
MR. BORGEFORD noted that the scorekeepers receive $5.00 a
game and if they worked every game possible during a season
the total compensation per season would be $350.00. The
minimum workman's compensation insurance currently is $79.95
for a scorekeeper, which is 22% of their wage.
MR. BORGEFORD stated that the Mat-Su Softball Association's
workers compensation bill last season was over $4,000.00.
Since there are only 35 teams in the association, that
results in over $100.00 per team.
MR. BORGEFORD concluded by saying that historically injuries
have been few to referees and other officials. Passage of
HB 290 would be good for kids and adults to help keep them
involved in sports.
Number 390
BOB SIMS, President, Juneau Douglas Officials Association,
testified in support of HB 290. Mr. Sims dittoed the
previous supportive testimony.
Number 429
REP. PORTER moved HB 290 with individual recommendations and
a zero fiscal note. No objections were heard; it was so
ordered.
HB 487 - SALE/DISPLAY OF MATERIAL HARMFUL TO MINOR
Number 435
JACK PHELPS, Staff, Rep. Pete Kott, Prime Sponsor of HB 487,
offered the following sponsor statement for the record:
The introduction of House Bill 487 was prompted by the
sponsor's concern over the growing number of violent crimes
in Alaska. Cases of reported rape, for example, nearly
doubled between 1989 and 1991. Furthermore, there is
growing evidence that violent crimes, especially rape and
murder, are more frequently committed by young people.
The sponsor believes that a contributing factor in this
rising violence among young people is the increased
frequently of sex-related violence as a theme in rock and
rap music. This conclusion has been supported by the U.S.
Attorney General's Commission of Pornography which found
that exposure to sexually violent material resulted in acts
of sexual aggressiveness and antisocial behavior. It is
self-evident that some material, whether in a visual or
aural format, may not be suitable for distribution to
children. At a minimum, the seller should make some attempt
to alert parents to the contents of such material and to
shield innocent young people from unwanted contact with such
material.
House Bill 487, while recognizing the constitutional
restraints imposed on the legislature's ability to curtail
distribution of certain material, acts on the state's
legitimate interest in providing some level of protection to
children who may be harmed by unwanted exposure to the
material.
The bill would regulate the distribution, sale, and display
of two different types of material. First, it would require
that printed matter, if it visually depicts material harmful
to minors and is displayed in a place where minors are apt
to view the material, must be covered by an opaque wrapper
and individually sealed. The definition of material harmful
to minors in this section is drawn from the obscenity
definition set forth by the U.S. Supreme Court.
Second, the bill requires labeling on any audio recording or
music video recording that contains lyrics harmful to
minors. The label is required to give a parental advisory
that the recording contains lyrics that include or describe
material harmful to minors. The bill also applies the
wrapping and sealing requirements of the first part of the
bill to certain audio and video recordings. For audio and
video recordings the definition of material harmful to
minors is expanded to include certain kinds of violence.
Violation of the provisions of HB 487 would be a Class B
misdemeanor on first offense, and a Class A misdemeanor on
subsequent convictions.
Number 490
REP. SITTON asked if the language on page 1, line 13,
"harmful to minors in any place where minors are present"
applied to material found in the minor's home.
Number 495
MR. PHELPS answered that he thought that was a good question
and thought that on the face of it it appears that it would
be true.
Number 507
REP. SITTON questioned whether Michelangelo's "David" would
be determined to fall under the language on page 2, line 14.
Number 514
MR. PHELPS answered that material referenced under this
section would have to satisfy all three descriptions to
apply. He further stated that it was clear "David" would not
fall under this section.
Number 520
REP. SITTON asked if the language on page 2, line 11, was
the language from a Supreme Court decision.
Number 525
MR. PHELPS answered that the previous statement was true and
further stated that what's added to the Miller definition is
the word "minors." He added that you can argue that this is
a looser standard as it now specifically references minors.
Number 529
CHAIRMAN HUDSON asked if the sponsor had any opinion on the
Department of Law's concerns.
Number 540
MR. PHELPS stated that the sponsor felt that if the items in
question truly fit the Supreme Court's definition of
obscenity he could not imagine why they would be provided to
minors from an official entity.
Number 550
CHAIRMAN HUDSON suggested that the comments provided by the
Department of Law should be fully considered.
Number 557
REED STOOPS, Lobbyist, Motion Picture Association of America
and the Recording Industry, testified in opposition to HB
487. Mr. Stoops stated he believes the bill to be
unconstitutional, unworkable and unenforceable.
MR. STOOPS stated he believes HB 487 to be unconstitutional
because the definition regarding violent behavior is
subjective and is protected by the first amendment.
MR. STOOPS stated that he believes there is a violation of
due process because under HB 487 action could be taken
before something is deemed harmful to minors.
MR. STOOPS added that HB 487 could be under inclusive and
doesn't treat all things the same.
MR. STOOPS contended that HB 487 is unworkable as the
industry would have to decide case by case on over 10,000
recordings a year what is offensive and what is not; and
furthermore what standards should/would be used.
MR. STOOPS added that HB 487 was impracticable as it would
require only the recordings to be sold in Alaska be wrapped
and he questioned whose responsibility that would be.
MR. STOOPS informed the committee that the recording
industry already has a rating system done on a voluntary
basis.
TAPE 94-24, SIDE A
Number 001
MR. STOOPS suggested that if the legislature wanted to do
something they should do a constitutional definition on what
is harmful to minors.
Number 073
CHAIRMAN HUDSON appointed a subcommittee of Rep. Sitton and
himself on HB 487.
Number 089
MR. PHELPS commented that the sponsor shared the concerns
heard today, and he felt that the practical application of
what obscenity means needs to be tightened up.
MR. PHELPS added that the sponsor was supportive of the
voluntary compliance of the industry to the degree it
extends, but believes it should be uniformly applied.
Number 115
CHAIRMAN HUDSON adjourned the meeting at 4:50 p.m.
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