03/17/2004 03:20 PM House L&C
| Audio | Topic |
|---|
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
March 17, 2004
3:20 p.m.
MEMBERS PRESENT
Representative Tom Anderson, Chair
Representative Carl Gatto, Vice Chair
Representative Nancy Dahlstrom
Representative Bob Lynn
Representative Norman Rokeberg
Representative Harry Crawford
MEMBERS ABSENT
Representative David Guttenberg
COMMITTEE CALENDAR
HOUSE BILL NO. 489
"An Act relating to the administration of the Alaska Vocational
Technical Center; and providing for an effective date."
- MOVED HB 489 OUT OF COMMITTEE
HOUSE BILL NO. 515
"An Act relating to the regulation of municipal water and sewer
utilities not in competition with other water and sewer
utilities."
- MOVED HB 515 OUT OF COMMITTEE
HOUSE BILL NO. 402
"An Act relating to fees for the inspection of recreational
devices, for certificates of fitness for electrical wiring and
plumbing, for filing voluntary flexible work hour plans, and for
licenses for boiler operators; and providing for an effective
date."
- MOVED CSHB 402(L&C) OUT OF COMMITTEE
HOUSE BILL NO. 452
"An Act relating to licensing and regulation of sport fishing
services operators and fishing guides; and providing for an
effective date."
- HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 489
SHORT TITLE: AVTEC ADMINISTRATION
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR
02/16/04 (H) READ THE FIRST TIME - REFERRALS
02/16/04 (H) L&C, FIN
03/17/04 (H) L&C AT 3:15 PM CAPITOL 17
BILL: HB 515
SHORT TITLE: MUNICIPAL WATER AND SEWER UTILITIES
SPONSOR(S): LABOR & COMMERCE
02/18/04 (H) READ THE FIRST TIME - REFERRALS
02/18/04 (H) CRA, L&C
03/04/04 (H) CRA RPT 1DP 4NR
03/04/04 (H) DP: ANDERSON; NR: KOTT, SAMUELS,
03/04/04 (H) WOLF, MORGAN
03/04/04 (H) CRA AT 8:00 AM CAPITOL 124
03/04/04 (H) Moved Out of Committee
03/04/04 (H) MINUTE(CRA)
03/17/04 (H) L&C AT 3:15 PM CAPITOL 17
BILL: HB 402
SHORT TITLE: LABOR & WORKFORCE DEVELOPMENT FEES
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR
01/28/04 (H) READ THE FIRST TIME - REFERRALS
01/28/04 (H) L&C, FIN
02/25/04 (H) L&C AT 3:15 PM CAPITOL 17
02/25/04 (H) Heard & Held
02/25/04 (H) MINUTE(L&C)
03/17/04 (H) L&C AT 3:15 PM CAPITOL 17
BILL: HB 452
SHORT TITLE: GUIDED SPORT FISHING
SPONSOR(S): REPRESENTATIVE(S) HEINZE
02/16/04 (H) READ THE FIRST TIME - REFERRALS
02/16/04 (H) L&C, JUD, FIN
03/17/04 (H) L&C AT 3:15 PM CAPITOL 17
WITNESS REGISTER
GREG O'CLARAY, Commissioner
Department of Labor & Workforce Development
Juneau, Alaska
POSITION STATEMENT: Presented HB 489.
MARK PREMO, General Manager
Anchorage Water and Wastewater Utility (AWWU)
Municipality of Anchorage
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 515.
MARK K. JOHNSON, Commissioner, Chair
Regulatory Commission of Alaska (RCA)
Department of Community & Economic Development
Anchorage, Alaska
POSITION STATEMENT: Provided information on regulation,
answered questions, and said he sees HB 515 as a fundamental
policy change.
ROBERT LOHR
Office of Management and Budget
Municipality of Anchorage
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 515.
GREY MITCHELL, Director
Division of Labor Standards & Safety
Department of Labor & Workforce Development
Juneau, Alaska
POSITION STATEMENT: Presented an informational chart and
answered questions about HB 402.
MIKE NOTAR, Assistant Business Manager
Local 1547
International Brotherhood of Electrical Workers (IBEW)
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 402 with the
proviso that the resulting fees be deposited into the Building
Safety Account.
CLAIRE MORTON, Owner
Golden Wheel Amusements
Chugiak, Alaska
POSITION STATEMENT: Expressed concerns about HB 402.
STEVE BOYD, Manager
National Electrical Contractors Association
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 402.
REPRESENTATIVE CHERYLL HEINZE
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified as sponsor of HB 452.
JON BITTNER, Staff
to Representative Cheryll Heinze
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented a short statement on the fiscal
note for HB 452 and answered questions on behalf of the sponsor.
KELLY HEPLER, Director
Division of Sport Fish
Alaska Department of Fish & Game
Juneau, Alaska
POSITION STATEMENT: Testified that his department strongly
supports HB 452.
GEORGE PATTERSON, Owner
"Catchalot" Charters
Ninilchik, Alaska
POSITION STATEMENT: Testified on HB 452.
DALE BONDURANT
Soldotna, Alaska
POSITION STATEMENT: Testified on HB 452.
JOEL HANSON
The Boat Company
Sitka, Alaska
POSITION STATEMENT: Requested that the committee hold HB 452
until substantial revisions occur; cited areas of concern.
ROBERT WARD
Homer Charter Association
Anchor Point/Homer, Alaska
POSITION STATEMENT: Testified in support of HB 452, except that
the $500 fee for a first-time penalty is too large.
TIM EVERS
Deep Creek Charter Boat Association
Ninilchik, Alaska
POSITION STATEMENT: Testified in support of HB 452, but
expressed concerns.
MARK HEM, Owner
Hem Charters
Fairbanks, Alaska
POSITION STATEMENT: Testified in opposition to HB 452.
ALAN LeMASTER, Owner
Copper River Salmon Charters;
Secretary, Klutina River Association
Gakona, Alaska
POSITION STATEMENT: Testified that the Klutina River
Association doesn't support HB 452 in its present form.
ACTION NARRATIVE
TAPE 04-27, SIDE A
Number 0001
CHAIR TOM ANDERSON called the House Labor and Commerce Standing
Committee meeting to order at 3:20 p.m. Representatives
Anderson, Gatto, Dahlstrom, and Lynn were present at the call to
order. Representatives Rokeberg and Crawford arrived as the
meeting was in progress.
HB 489-AVTEC ADMINISTRATION
CHAIR ANDERSON announced that the first order of business would
be HOUSE BILL NO. 489, "An Act relating to the administration of
the Alaska Vocational Technical Center; and providing for an
effective date."
Number 0114
GREG O'CLARAY, Commissioner, Department of Labor & Workforce
Development (DLWD), explained that last year's SB 192
transferred the Alaska Vocational Technical Education Center
(AVTEC) in Seward from the Department of Education and Early
Development to DLWD. It was recently discovered, however, that
the legislation didn't incorporate statutory authority for DLWD
to set student tuition and fees. Thus HB 489 corrects that
oversight.
Number 0191
REPRESENTATIVE DAHLSTROM moved to report HB 489 out of committee
with individual recommendations and the accompanying fiscal
notes. There being no objection, HB 489 was reported from the
House Labor and Commerce Standing Committee.
HB 515-MUNICIPAL WATER AND SEWER UTILITIES
CHAIR ANDERSON announced that the next order of business would
be HOUSE BILL NO. 515, "An Act relating to the regulation of
municipal water and sewer utilities not in competition with
other water and sewer utilities."
Number 0268
CHAIR ANDERSON introduced HB 515 on behalf of the House Labor
and Commerce Standing Committee, sponsor. He said it's fairly
straightforward as it exempts the Anchorage Water and Wastewater
Utility (AWWU) from regulation by the Regulatory Commission of
Alaska (RCA). He explained that no other municipally owned
water or wastewater utility is regulated by the RCA, save the
City of Pelican, which requested regulation of its water
utility. He said the Municipality of Anchorage (MOA) believes
current RCA regulation processes are cumbersome, slow,
expensive, and unresponsive to local needs. Therefore, he said,
Mayor Begich and the MOA assembly believe the proposal
encompassed in HB 515 would be more efficient and positive for
the ratepayers. Chair Anderson explained:
Ratepayers in Anchorage are required to pay for the
expense of RCA regulatory process as a surcharge on
every bill. That means our constituents are paying
this every month, and that's whether or not the
utility has a case pending. ... A good example is from
1993 until 2003, AWWU never had a rate increase from
the RCA or the APUC, the former Alaska Public
Utilities Commission. ... The ratepayers still had to
pay the regulatory assessment on every bill. ...
In 2004, AWWU ratepayers are projected to pay about
$500,000 ... to the RCA to cover the costs of this
regulation. The greatest costs appear to be in the
form of regulatory delay in obtaining approval of a
requested change. The [MOA] is directly accountable
to ratepayers served by the utilities, and they are
the voters, obviously. The municipality has
experienced successfully regulating enterprise
activities; that's the reason they want it under their
purview. Examples of this are the Port of Anchorage,
solid waste services, and, of course, Merrill Field.
All of those are financially sound and, I think, they
provide first-class consumer and customer service.
The municipal public hearings are held on any proposed
rate increase, and the public is really involved with
the hearing process. Under this format, rather than
RCA, it's amenable to easier access, going to the
[municipality] versus going to the RCA and those
fairly complicated meetings.
Number 0493
CHAIR ANDERSON read from page 2, lines 5-8, which states:
(B) a water utility owned by a political
subdivision that does not directly compete with
another water utility; or
(C) a sewer utility owned by a political
subdivision that does not directly compete with
another sewer utility.
He noted that subparagraphs (B) and (C) would be exempt from RCA
regulation under this proposed bill.
Number 0533
MARK PREMO, General Manager, Anchorage Water and Wastewater
Utility, testified in support of HB 515, which would exempt AWWU
from economic regulation by the RCA and place it in the same
status as every other municipally owned water and wastewater
utility in Alaska except one. Providing background, he said
AWWU consists of two separate utilities, both subject to
economic and service area regulations by the RCA. The water
utility, a former municipal utility, has been under RCA
regulation since inception of the [former] APUC in 1970. The
Anchorage sewer utility was formerly owned by the Greater
Anchorage Area Borough, and was voluntarily submitted to the
APUC for regulation in 1971. He continued:
An umbrella organization, AWWU was formed in 1975
following the unification of the Municipality of
Anchorage. The Municipality of Anchorage in 1991
petitioned the then-APUC to exempt AWWU and its
electrical utility from regulation. The decision
split evenly by a vote of 2-2 on the question of
exempting the electric utility and AWWU.
The opinion by the commissioners opposing self-
regulation cited competition by the municipality's
electric utility/cell phone utility with other
utilities as the primary reason why AWWU should remain
regulated by the state. No commissioner suggested
then, or has since suggested, that competition between
water and wastewater utilities was present, nor is
there any competition there today.
There are a number of small, private, class D (indisc.
- coughing) water systems in Anchorage that are not
publicly owned and which do not receive regular water
service from AWWU. Ten are certificated by the RCA.
Seven of those are also economically regulated by the
RCA, and the other three appear to be community
systems run as cooperatives, therefore exempt from
economic regulation. House Bill 515 does not apply to
any of these small systems, since none is publicly
owned with public oversight.
Number 0691
MR. PREMO continued:
Why does the Municipality of Anchorage desire
exemption from RCA regulation? The current RCA
regulations and procedures are slow and expensive.
From 1993 to 2003, AWWU never requested a rate
increase, yet AWWU ratepayers have paid approximately
2.8 million [dollars in] regulatory assessments to the
RCA during this period as part of every monthly bill,
and are projected to pay just short of $500,000 in
2004 to cover the cost of regulation.
One of the two supporting documents I sent to Juneau
two weeks ago, at the time of local regulation of
municipal water and wastewater utilities, [has] dates
listed incorrectly with regards to the timeframe in
which AWWU had no rate increases. It has 1993 to
2004. It should be corrected to be 1993 to 2003, as
the chair correctly stated.
Number 0755
MR. PREMO continued:
During the last decade there were a number of minor,
relatively simple procedural tariff filings during
this period of time for action, such as minor service-
area adjustments and tariff-rule changes. However,
the greater cost to AWWU and its customers is in the
form of the cost of preparing filings and regulatory
lag. History shows that local regulation is faster,
less structured, and more economical.
Current RCA regulations and procedures are
nonresponsive to local need, which is our second
point. The RCA process was designed for private
utilities and is not entirely appropriate for
municipal utilities. The RCA process is very
structured. The municipality is more responsive to
local needs and is directly accountable to the
ratepayers who are served by these utilities. These
customers are also municipal voters. Hearings are
held by the municipality in all rate matters.
I ask for the committee's support on House Bill 515.
Self-regulation has worked effectively across the
nation and in other Alaskan communities and in
Anchorage. Actually, Anchorage has regulated some of
its own public utilities for many years, many more
years, in fact, than the state regulators. Anchorage
has a proven record and has effectively regulated the
Port of Anchorage, Merrill Field, Solid Waste
Services; all are financially strong, high reputable
enterprises that provide excellent customer service.
Number 0834
MR. PREMO continued:
AWWU has provided its customers with excellent
service, low, stable rates, and sound finances. For
more than a decade, ratepayers have benefited from no
rate increases as AWWU has reduced positions and
expenses by leveraging technology, improving business
processes, while at the same time increasing spending
on system repairs and rehabilitation, all without the
direction and assistance from RCA.
Over the years, the mayor and the assembly made sound
decisions in their oversight of AWWU and other
municipally owned utilities. Most recently, in
January of 2004, AWWU filed for water and wastewater
increases to be effective in 2004 and 2005. These
rate increases are for increased payments in lieu of
taxes, operating expenses, and debt-service costs of
facilities constructed in prior years. Effective
February 23, 2004, the RCA granted AWWU interim
refundable rate increases. I expect the RCA approval
to make these rates permanent in the fourth quarter of
2004.
The Municipality of Anchorage and the administration
support the establishment of a strong, independent
board to oversee and regulate AWWU in lieu of the RCA.
In conclusion, with the passage of House Bill 515,
municipal regulation of AWWU will balance consumer
protection with ... financial soundness, and AWWU will
continue to operate on a sound business basis. The
RCA would still continue to regulate AWWU water and
wastewater certificated service areas.
Number 0940
REPRESENTATIVE GATTO asked for clarification about MOA and
Pelican as the only two entities currently under RCA regulation.
MR. PREMO replied that this was correct with regard to publicly
owned water and wastewater utilities.
REPRESENTATIVE GATTO wondered if Pelican would have to pay a
higher cost because of an exemption to the MOA.
MR. PREMO deferred to Mark Johnson, commissioner and chair of
RCA.
REPRESENTATIVE ROKEBERG asked Mr. Premo to explain the AWWU
billing process.
MR. PREMO replied that it's done on an independent line item so
the customer can identify the charge. The present rate is 0.867
percent for both the water and the wastewater, since they are
billed separately. He said the interim increases granted on
February 23, 2004, were 13.61 percent for water and 8.06 percent
for wastewater. He explained that AWWU pays $500,000 a year for
regulatory compliance to file tariff charges; this increase was
the first granted since 1992 and, in fact, in 2001 there was a
lowering of the rate for wastewater of 2.75 percent.
Emphasizing that the $500,000 passed on to the RCA was for the
RCA to conduct its work, he noted that AWWU must also prepare
cases that go to the RCA commission; these costs are in addition
to the $500,000 and are incorporated into the RCA charge.
Number 1221
REPRESENTATIVE ROKEBERG asked what effect HB 515 would have on
the recently granted interim rate increases, and if AWWU would
have to conduct hearings to establish permanent rate increases.
MR. PREMO responded that the rate increases before the RCA have
undergone the public process and been passed by local ordinance.
He recommended keeping these increases in place because the
long-range financial plan had included this income.
REPRESENTATIVE ROKEBERG asked for the anticipated amount of the
net revenue increase resulting from the February 2004 increases
for water and wastewater.
MR. PREMO replied that in 2004 the interim refundable increase
would result in $5.9 million and, when the rates become
permanently established, the AWWU has projected a collection of
$6.1 million over a 12-month period.
Number 1382
CHAIR ANDERSON suggested this has nothing to do with the current
rate increase.
MR. PREMO agreed and noted that this bill has to do with the
internal financial workings of the utility and keeping them
economically healthy.
REPRESENTATIVE GATTO asked Mr. Premo to think of it from the
point of view of a ratepayer in Anchorage. He said:
There is an interim rate increase for about $6
million; it's before the RCA. Before the RCA can
determine, you come to the legislature and get the RCA
out of the process, and the rate increase becomes
permanent because there is no other entity to control
it. Therefore, the ratepayer looks at us and says,
"Well, you couldn't do it through the RCA, so you got
legislation to do it." Am I correct?
MR. PREMO replied:
I don't think you're totally correct, Representative
Gatto, in the fact that, when we file a rate increase
the process is a two-step process. I'm sure Chairman
Johnson [of the RCA] can speak to it. We filed the
rate increase in January. .... There's a permanent
part of the rate increase they'll make permanently
effective based on RCA's ruling, but in addition, at
that point in time, we asked for what we call interim
rates. Those interim rates are established
approximately 45 days on with the commission. Those
interim rates have been granted; we're collecting
those interim rates today, already.
When the commission finally rules, I expect, the
fourth quarter of this year, ... those interim rates
will be made permanent. There may be some adjustments
in what the actual rate structure is, within a point
and a half, a point, would be my expectations at the
most. Should we have been overcollecting, in the
RCA's viewpoint, in this point in time, we'd actually
have refundable. That's why we say they're interim,
refundable rates. So, in essence, the RCA has already
approved the interim request, sir.
Number 1438
CHAIR ANDERSON commented that RCA is cumbersome and expensive,
that AWWU wants to join the large majority of entities not
regulated by RCA, and, while he appreciated Mark Johnson's
chairmanship of RCA, AWWU wanted to make it easier and less
expensive for its customers through local control of water and
wastewater utilities. He said, "It's more of a payment that
isn't necessary, because you're not using them as a regulatory
body, because there hasn't been the need."
MR. PREMO agreed and stated:
We believe we'd be much speedier with respect to our
own regulatory process that we would set up here in
Anchorage to overview the utility, which would be a
very strong board-type of overview. We think
depoliticizing any decisions is important. We need to
make sure there's long-term health stability of the
utility, and, obviously, we need to be customer-
responsive in the fact that we'd be over the purview
of the local assembly, with the local assembly being -
they're voters - also being ratepayers, much more
responsive, nominally in the decrease of the RCA
surcharge, but, more importantly, in the interaction
and the cost of interaction with the RCA ... and,
ultimately, the speed with which we could conduct our
business internally.
Number 1588
REPRESENTATIVE LYNN asked what difference HB 515 would make to a
homeowner's pocketbook.
MR. PREMO said he couldn't answer directly, but AWWU had a long-
range financial plan and he anticipated a decrease in the cost
of regulation to the overall utility; this decrease would affect
the cost to the ratepayer. He said local control creates a
higher level of accountability because the voters can make their
wishes known. He said:
Right now, quite candidly, I see it as just the
opposite. What you have ... is a situation where you
have local control in the fact that any rate increase
goes through the assembly through an ordinance and
public hearing process. However, how many times have
I seen a local assembly member stand up and say,
"Well, you know, this is going to be looked at and
approved by the RCA before it becomes implemented."
So they, in essence, are saying, "Yes, we've done our
job, but really the RCA is accountable." Well, now,
what we're doing is we're transferring that back
around and making those local officials really
accountable for their actions.
REPRESENTATIVE LYNN said, "I guess that answers my question.
The potential for the future is, there's going to be less money
out of pocket for the individual user of these utilities.
That's what I wanted to hear. That's the odds are."
Number 1711
MARK K. JOHNSON, Commissioner, Chair, Regulatory Commission of
Alaska (RCA), Department of Community & Economic Development,
testified that a fundamental policy call is before the
legislature as whether municipal self-regulation of a water or
sewer utility is the appropriate way to proceed. He said:
In general, we believe that the regulatory cost
charges that have been paid to RCA by the
municipality, by AWWU, have been overstated in their
decisional document. That was the document that was
placed in front of the assembly. ... Fundamentally,
from the RCA's perspective, ... we believe that AWWU
is a pretty well-run utility. Nonetheless, we believe
there are some inherent problems in the local self-
regulation. ...
MR. JOHNSON pointed out the significant benefits to consumers
from RCA jurisdiction over the years. The primary benefit has
been relative rate stability over an extended period of time.
Although it is likely attributable in part to wise management,
he said certainly declining interest rates had a lot to do with
it, in addition to significant consumer benefits when a utility
that sets rates knows it is subject to RCA jurisdiction and
review. He continued:
We suggest that what you have before you is a
fundamental alteration of that framework. We don't
believe that the benefits are as clear as maybe
stated. For example, it should not be overlooked that
the municipality, ... if they intend to stand for
self-regulation through a board, ... will have
significant expenses in setting up that board and
staffing it. ...
What is clear is that if this legislation passes
today, rates could be set by the Anchorage Assembly
with the adoption of a municipal ordinance. As noted,
that is not a difficult process. There's no question,
at least in my view, that without the RCA in the
picture, the degree of scrutiny that those rate
decisions might be exposed to might be substantially
reduced. I say it's a municipal ordinance process; it
could be introduced and heard before the assembly in a
very, very short period of time. And we believe that
it would probably usher in an era of rate instability
that would not at all be beneficial to the consumer.
Number 1891
MR. JOHNSON continued:
The additional thing that I would call to your
attention is the history of self-regulation is really
not all that clear. ... In Fairbanks, the water and
sewer utility used to be owned and run by the
municipality. The experience in Fairbanks was not a
positive one. ... Staff informs me that, in fact, the
public was very much urging that the municipality no
longer run that utility and turn it over to private
hands. And that utility today rests in private hands.
I suggest that the transitional process ... may not be
quite as clear as some would suggest to you. We have
a process that's very well established; we adjudicate
these matters, usage of a written record; when ...
commissioners we hear a variety of matters from
multiple utility groups. The process is very familiar
to those that participate in it. ... The municipality
would have to establish something comparable and, as I
suggested, nothing of that nature has been established
by the municipality so far.
We believe that the RCA is particularly well suited to
deal with the problems which are inherent in self-
regulation by a municipality. One of those issues
relates to the reasonableness and the collection of
payments in lieu of taxes. In the case of AWWU, that
takes the form of the MUSA [Municipal Utility Service
Assessment] and other payments. Of course, you have
self-regulation, as you have a municipal assembly that
on the one hand has an appetite for spending money,
and yet they would also be placed into the category of
setting the rates. I suggest that there's an inherent
conflict in that approach. ... We view this as a
fundamental policy call in front of the legislature.
Number 2024
REPRESENTATIVE GATTO observed that the fiscal note indicated RCA
staff would be reduced by two positions, saving $258,000. He
asked if this was accurate.
MR. JOHNSON replied that a full year's reduction would actually
be $345,000; there wasn't a direct match between two positions
and the $345,000. He said he hadn't yet broken out the proposed
reductions among the various operating-expenditure categories
listed on the fiscal note.
REPRESENTATIVE GATTO asked if Pelican would be forced to assume
a higher RCA cost as a result of RCA's losing the revenue from
AWWU.
MR. JOHNSON replied that the impact on Pelican would be quite
small.
Number 2099
REPRESENTATIVE ROKEBERG asked if the refundable interim rate
increase would not apply if AWWU assumed authority.
MR. JOHNSON replied that it would depend on the effective date
of the legislation and on whether the Anchorage assembly wanted
to make the rate increase permanent.
REPRESENTATIVE ROKEBERG offered his belief that the attorney
general's office staffs an office in the RCA that represents the
public's concerns about rate matters. He asked, if there were
going to be a hearing on rates, whether this office would take
up the case, as a rule.
Number 2167
MR. JOHNSON replied that the attorney general or his/her
designee would make that decision. He mentioned audits and
investigations and that the attorney general participates in
this kind of a case, but said there was no scheduled hearing at
this time.
REPRESENTATIVE ROKEBERG asked if there is a six-month timeframe
in which RCA has to take up this matter or it would become a
permanent rate increase.
MR. JOHNSON affirmed that, saying he preferred to comment no
further on this current rate case.
Number 2234
REPRESENTATIVE ROKEBERG noted that RCA is supposed to be an
independent body acting outside the purview of politics so it
can give fair, reasonable, and just hearings on tariffs and
dockets. He also noted that an office of public advocacy exists
within RCA, and said the purpose is to have a regulatory
authority rather than self-regulation on the part of
politicians.
MR. JOHNSON replied that he thought, in every state, that
publicly elected officials determined the extent to which they
wanted self-regulation by entities that have other due process
procedures in place. He noted that the Anchorage assembly acts
pursuant to public notice and provides opportunities for the
public to participate in its process; he reiterated that this
issue is a fundamental policy call of the legislature. He said
regulation could come from RCA or the legislature could choose
to establish a different process to permit municipal self-
regulation.
CHAIR ANDERSON suggested losing $500,000 from AWWU could result
in RCA's losing positions.
MR. JOHNSON replied that RCA could increase cost charges on the
remaining utilities it regulates or could reduce its budget. He
said he believes the responsible thing to do would be to reduce
RCA's budget.
CHAIR ANDERSON asked if he agreed that Mr. Premo could reduce or
stabilize rates as a result of not having to pay $500,000 to
RCA.
MR. JOHNSON acknowledged that as a possibility, but said he
didn't believe the committee could predict with any certainty
whether the reductions would be passed on to ratepayers, since
the outcome would be out of the hands of RCA and the
legislature, and into the hands of the Municipality of
Anchorage.
Number 2341
ROBERT LOHR, Office of Management and Budget, Municipality of
Anchorage, stated support for HB 515 and said:
I do have three comments. First, as the chairman of
the RCA has indicated, this is a fundamental policy
call for the legislature. But actually the
legislature has made the policy call, and that is that
municipally owned utilities are exempt from regulation
by the RCA, with very limited exceptions. Currently,
as has been indicated by Mr. Premo and other
testimony, the only publicly owned water-sewer
utilities that are currently regulated by the RCA with
respect to rates, services, and practices are AWWU and
the City of Pelican. In the latter case, Pelican has
asked to be economically regulated by the commission.
So this policy call's been made, and this bill is a
small adjustment to that policy to make it clear that
AWWU can qualify for the same treatment as other
publicly owned water and sewer utilities have.
TAPE 04-27, SIDE B
Number 2397
MR. LOHR continued:
I worked with the regulatory commission or its
predecessor, the APUC, for nine or ten years, and I
was there when the regulatory cost charge was created
... in 1992. So I'm very familiar with that
mechanism. But with respect to ratemaking, the
process that will be followed in the future by AWWU is
extremely similar to that that is followed in
preparing a rate case for the RCA; namely, the revenue
requirement is established, and that's based on the
cost of operating the utility. It is a rate-based,
rate-of-return model that is very familiar to all of
those involved with public utilities.
That process would not change. The cost-of-service
study to allocate those costs among the customer
classes properly would not change. And, third, nor
would the rate redesign phase, where the costs are
adjusted to match those costs of providing service
such that the cost causer becomes the cost payer.
Those techniques are well known. They are industry
standards, and they would be followed under AWWU, as a
self-regulated utility. I am sure that the board of
directors of AWWU will insist on it.
Number 2329
MR. LOHR continued:
As Mr. Premo's already indicated, there is
accountability in the fact that the voters and the
ratepayers are one and the same. And the mayor and
the assembly would continue to be fully accountable.
I would make just one note: the assembly has not, in
fact, approved the rates. What they have done is
approved the filing of the rate case with the RCA.
The permanent rate decision would remain.
The third comment I'd like to make is that recent
legislative audits have asked the commission, the RCA,
to focus on small ... water and sewer utilities,
because there are 65 utilities out there that are not
certified, which the commission is aware of. I would
respectfully suggest that this would be a good area of
attention. I know that the commission has, in
response to the legislative audit, adopted some
regulations to relax the certification process for
those utilities. But, to date, I believe many of them
remain uncertified.
Number 2271
REPRESENTATIVE ROKEBERG asked about the status of the small
water utilities. He said in his area of Anchorage, for example,
there are a number of class "a," "b," and "c" designations by
the Department of Environmental Conservation (DEC). He asked,
"Those small co-op or neighborhood-type water utilities that are
privately owned in the main, are they regulated by the RCA now?"
MR. JOHNSON replied that, in fairness, he is still new at his
job and learning a lot. He said in general, as it relates to
the small water and sewage utilities, there are a larger number
than 65, and the RCA has made efforts to provide some
rudimentary form of regulation to them. He said the primary
regulatory framework at this time is through DEC, which has
various classes, although he didn't know how those classes would
relate to RCA's proposed limited certification. He said
although RCA is moving into that area of regulation, it remains
to be seen how it intends to pay for those efforts.
Number 2206
REPRESENTATIVE ROKEBERG said in Anchorage there are several
hundreds of these type of water systems. He asked if the
municipal water service competes with these small private water
systems.
MR. PREMO responded:
We need to kind of differentiate the classes of
utilities. ... Regarding how the RCA classifies
utilities, which is on a very class description, a
class "a" would be one like the [AWWU]. We have $1
million or greater [of] revenue, all the way down to a
class "d," which is less than $250,000 of revenue.
There are 11 of those utilities within Anchorage. All
but AWWU are rated as a class "d" system, less than
$250,000 in revenue annually. Of those, all but three
are economically regulated, and they are privately
owned.
There are three that are not economically regulated,
but they are run, in essence, as a cooperative. They
are outside of regulation. The other thing that I
think you are speaking to is that there are also an
additional 90 water systems within the Municipality of
Anchorage that report to the DEC as a small water
utility. I think that's what you were referring to.
So, that might give you a basis for the number.
Number 2107
REPRESENTATIVE DAHLSTROM noted that she was from Eagle River and
that her community had been discussing secession from the MOA.
She asked Mr. Johnson what the changes being discussed in HB 515
would be if Eagle River did secede.
MR. JOHNSON replied that he thought parts of Eagle River were
served by AWWU. He noted a broader question: What is the
ownership interest in the utility? He said people who live in
the Chugiak area, for example, live in the MOA, but aren't
served by AWWU; they still have an ownership interest in the
utility. He said it's an extremely complex question, and it
would depend on the terms of the separation of Chugiak/Eagle
River from the MOA.
Number 2011
MR. LOHR added, "I believe that the RCA would retain full
authority over certificates. That is, service territories and
their boundaries would continue to be regulated by the RCA, even
if this bill was adopted and enacted."
REPRESENTATIVE GATTO asked Mr. Johnson if the RCA was likely to
approve the two increases requested by AWWU.
MR. JOHNSON declined to comment.
CHAIR ANDERSON said he thought this bill was for the consumer;
that rates would be lowered or stabilized; and that, from the
perspective of the Anchorage legislators, the consumers would
save money and still get efficient service.
Number 1930
CHAIR ANDERSON moved to report HB 515 out of committee with
individual recommendations and the accompanying fiscal notes.
There being no objection, HB 515 was reported from the House
Labor and Commerce Standing Committee.
HB 402-LABOR & WORKFORCE DEVELOPMENT FEES
CHAIR ANDERSON announced that the next order of business would
be HOUSE BILL NO. 402, "An Act relating to fees for the
inspection of recreational devices, for certificates of fitness
for electrical wiring and plumbing, for filing voluntary
flexible work hour plans, and for licenses for boiler operators;
and providing for an effective date." [HB 402 was sponsored by
the House Rules Standing Committee by request of the governor.]
Number 1853
GREY MITCHELL, Director, Division of Labor Standards & Safety,
Department of Labor & Workforce Development, presented an
informational flowchart that detailed the collection and
expenditure of state fees for recreational device inspections,
boiler operator licensing fees, electrician and plumber
certificate of fitness fees, and flex-plan filing fees. He
testified:
The recreational device inspection fees are paid by
the operators of these recreational devices. People
who are operating ski lifts or a go-cart ride ...
would be required to pay a fee for the inspector to
check that ride out. Those fees would then be
deposited into the building safety account [BSA],
which is a subaccount in the general fund ...
legislatively earmarked to fund the mechanical
inspection program. ... The legislature then gives a
certain amount of authority to the Mechanical
Inspection Program to spend the money that's
collected. ... The funding would be used for inspector
certification and the cost of travel associated with
getting these certifications. ...
The second section deals with boiler operator
licenses. And we are proposing a fee for the
licensing of boiler operators. At the time of their
application they would pay a $200 fee, which would be
good for three years. The funds for those license
fees would, again, be deposited into this building
safety account, which is used to fund the Mechanical
Inspection Program, subject to the legislative
authority that is established by you. That funding
amount would be used for the program costs, which are
involved with reviewing the credentials of the
applicants, testing the applicants when they apply for
a license, issuing the licenses, and maintaining the
records on those license holders.
Number 1722
MR. MITCHELL continued:
Section 3 deals with certificate-of-fitness fees that
are paid by plumbers and electricians who hold
certificate of fitness cards or licenses. At the time
of their application for that license, they would pay
a fee for the license. Currently, they do pay a fee,
and our proposal is simply to increase that fee to
cover our existing costs and increase one electrical
inspector position. The funds that are collected for
those certificate-of-fitness fees, again, go into the
building safety account, which is then used to fund
the Mechanical Inspection Program. ...
The last one: ... flex-plan filing fees would be
charged to an employer at the time that they apply for
flexible work hour plan, which is an exemption from
overtime that basically allows employees to work a
four 10-hour day schedule instead of the normal 8-hour
standard that applies for overtime in Alaska. Then
again, these funds would just be deposited into the
general fund, so they aren't program specific funds.
This is more of a revenue-generating proposal.
Number 1648
REPRESENTATIVE GATTO asked if the BSA is the same account for
all four of the sections on the flowchart or whether each
section is a subaccount of the BSA.
MR. MITCHELL replied that the first three sections are all in
the BSA, and the last section's fees go into the general fund.
REPRESENTATIVE GATTO asked if this bill requires that each
recreational-device inspector travel to California or Florida
for training or if one individual could get the necessary
training, return to Alaska, and train other inspectors.
MR. MITCHELL replied, "The cost would really only be for our
inspectors to go to certification training in those locations.
Then they would come back and, with their knowledge, inspect the
devices for these operators."
Number 1584
REPRESENTATIVE CRAWFORD asked how long it would take to add an
additional electrical inspector after the fees were raised.
MR. MITCHELL said there are two positions being held: one is a
new position, not in the governor's budget, and would only be
created when HB 402 passes; the other is being held because of
current insufficient funding in the BSA. He hoped to fill the
second position first and believed there would be enough funds
at the beginning of the fiscal year if HB 402 passed.
REPRESENTATIVE CRAWFORD stated his intent to increase the number
of electrical inspectors and wondered how the legislature could
accomplish this goal.
MR. MITCHELL said he couldn't commit to filling the new position
immediately because the program is funded from collected fees
and the distribution process for these fees is complex.
REPRESENTATIVE CRAWFORD reiterated that electricians agree to
pay extra fees so there are adequate inspections; he sought
assurance that these fees would go for the inspector positions.
MR. MITCHELL replied:
The plan is to increase by two positions. So we're
going to fill a vacancy and then we're adding a
position with this legislation, and we would fill it
if we had the revenue available to do it. Our
projections show that we will. So if everything
aligns, then we're going to fill this position shortly
after the start of the fiscal year.
REPRESENTATIVE GATTO called attention to page 2, lines 19-20,
"Nothing in this section creates a dedicated fund or dedicates
the money in the account for a specific purpose." He expressed
concern that the fees could be used for some other purpose.
REPRESENTATIVE ROKEBERG clarified that this language exists to
avoid constitutional conflicts because of the [state]
constitutional prohibition on dedicated funding. He said, "You
want to try and direct it here, but you have got to express in
the statute that it is not dedicated."
MR. MITCHELL said the BSA statute, AS 44.31.025, contains the
authority to deposit in and charge against the BSA.
Number 1307
MIKE NOTAR, Assistant Business Manager, Local 1547,
International Brotherhood of Electrical Workers (IBEW),
testified:
I'm here to speak to the proposed increasing of the
fees charged for electrician certificates of fitness.
Journeymen electricians and apprentices, in order to
perform electrical work in the state of Alaska, must
qualify for, test for, obtain, and possess an
electrical certificate of fitness or license. Also,
electrical contractors performing work in our state
are required to test for and obtain an electrical
administrator's license. For the committee's
information, certificate-of-fitness holders cannot
perform electrical work unless they are employed by a
licensed electrical contractor.
We are here to speak in support of the proposed
statute change if the revenues collected are placed
into the building safety account and will allow the
Department of Labor & Workforce Development to enforce
certificate-of-fitness requirements and perform
inspections. At the present time, there is but one
electrical inspector statewide to enforce these
requirements and do inspections. As a result, these
things are not being done to the extent that we
believe they should be.
We believe that a certificate of fitness for
electricians has societal value, both in protection of
life and property, when the integrity of electrical
installations is inspected and required to conform to
the minimum standards allowed by law in our state. We
also believe that, from an enforcement standpoint, the
public interest is well served by requiring
electricians and apprentices to be qualified,
licensed, adequately trained, and continually educated
in the national electrical code, which is adopted in
statute, which further protects life and property.
The Department of Labor & Workforce [Development] also
through these inspections and enforcement, has the
ability to enforce the electrical administrator
requirements, thus assuring the public that both
qualified contractors and electrical workers are
responsible for the work being performed and that
standards that assure public safety are being met.
Number 1212
MR. NOTAR continued:
Another point that I don't believe has been mentioned
is that other states - specifically Oregon, South
Dakota, North Dakota, Utah, Nebraska, Wyoming,
Washington, Idaho, Montana, Minnesota, Colorado, and,
most recently, California - have licensing
requirements for electricians. The State of Alaska
reciprocates licensing with each of these states
except for California at present, to the best of my
knowledge. What this means is that if work becomes
slow in certain areas or states, or if work becomes
overly plentiful in another area or state that lacks
an adequate electrical workforce, this reciprocation
of licensing allows portability, both for the areas
and the electrical workers that may need it. Although
the fee increase does not affect these relationships,
I felt it was good information for the committee.
Number 1129
CHAIR ANDERSON asked for clarification on Mr. Notar's position
on HB 402.
MR. NOTAR replied: "We are supportive of the increase to our
licensing fees if it, in fact, will go into the building safety
account. And I understand that there is not a dedication."
REPRESENTATIVE ROKEBERG asked whether it was Mr. Notar's
testimony that the certified electricians should be paying for
building inspectors, rather than having real estate developers
or building owners pay for them.
MR. NOTAR replied no. He said these inspectors have the ability
to inspect for the integrity of the work, but also have the
ability to enforce licensure of contractors.
REPRESENTATIVE ROKEBERG characterized the certificate of fitness
as a "tax on workers" and asked Mr. Notar if there was any
controversy among the membership of the IBEW with regard to
paying a fee for this certificate.
MR. NOTAR replied:
I don't believe I could represent to this committee or
anyone else that all my members are always happy at
any one time regarding any issue. I would have to say
that, yes, they are generally supportive of this.
There is some controversy regarding the certificate of
fitness. Probably the major controversy is what is
spurring me to provide this testimony today, that is,
why would we pay the fee if there is not enforcement
or inspection being done.
Number 0950
REPRESENTATIVE ROKEBERG expressed concern that the Department of
Labor & Workforce Development planned to hire building
inspectors with funds from the BSA. He said he felt these costs
should be borne by the developers, the building owners, or the
state agencies that hire inspectors, rather than the workers.
MR. NOTAR stated:
To be very candid, we have been paying these fees for
30 years. We feel they are beneficial not only to our
members. We feel they are beneficial to the public
safety, the public good. Our members and others are
generally comfortable in the licensing fees, and they
don't feel that they are exorbitant.
Number 0796
CLAIRE MORTON, Owner, Golden Wheel Amusements, testified that
her company annually hires nationally certified, professional
inspectors from outside to inspect her recreational equipment
and provide safety training to her employees. She questioned
the prudence of the $200-per-ride inspection fee when she
already pays for an outside firm to do the inspections. She
questioned the liability of the state and suggested third-party
inspection might be more prudent.
Number 0550
STEVE BOYD, Manager, National Electrical Contractors
Association, noting that he is a licensed electrician,
testified:
On behalf of myself as a certificate-of-fitness holder
and on behalf of the National Electrical Contractors
Association, I'd like to go on record as supporting
this fee increase. Recognizing the challenges that we
all face, we feel that the increase is reasonable,
given the length of time since the last increase and
the necessary work that has to be done.
The building safety account would ensure funding
certificates of fitness and inspections of the covered
work. These programs are beneficial to the industry
and the general public. They help ensure an adequate
level of compliance of public safety. For these
reasons, we support the program and the necessary
increase in fees.
Number 0446
REPRESENTATIVE ROKEBERG asked Mr. Mitchell if the current system
of inspections allows for third-party certified, outside
inspectors.
MR. MITCHELL replied that the Division of Labor Standards and
Safety has worked with third-party inspectors at Golden Wheel
Amusements for a number of years. He stated, "The amusement-
ride inspections that are done by out of state inspectors that
would come in, or certified inspectors, which are done with our
people, could be exempt from the fee. After all, our inspectors
would not do the inspection."
REPRESENTATIVE ROKEBERG noted that a company with 10 machines
would pay $2,000 to the state in addition to the outside
inspector.
MR. MITCHELL responded that if the inspector doing the
inspection was from his division, that would be true.
REPRESENTATIVE ROKEBERG asked whether Mr. Mitchell would accept
a certified outside inspector approved by the Department of
Labor & Workforce Development doing the inspection and waiving
the fee.
MR. MITCHELL said that's what the department is currently doing;
however, it is not in regulation.
REPRESENTATIVE ROKEBERG asked if the statute could be amended to
include the approved use of certified, outside inspectors. He
also asked how much it costs to process a one-page request for
voluntary flextime work plan at this time.
MR. MITCHELL replied that there is no fee at this time, but
acknowledged that some flex plans are complicated and require
more time to process than others.
REPRESENTATIVE CRAWFORD asked for the primary reason underlying
the $100 fee for a flex plan in the proposed legislation.
MR. MITCHELL said it generates fee revenue.
TAPE 04-28, SIDE A
Number 0008
REPRESENTATIVE ROKEBERG moved to adopt Conceptual Amendment 1,
to add a subsection (d) to Section 1 that says the department
will waive any fees for approved and nationally certified
inspections for the devices under this section. There being no
objection, it was so ordered.
Number 0079
REPRESENTATIVE ROKEBERG moved to adopt Amendment 2, labeled 23-
GH2111\A.1, Bannister, 2/27/04, which read:
Page 1, line 2:
Delete "for filing voluntary flexible work hour
plans,"
Page 2, lines 6 - 9:
Delete all material.
Renumber the following bill sections accordingly.
CHAIR ANDERSON objected for purposes of discussion.
REPRESENTATIVE ROKEBERG explained that for the title for filing
voluntary flexible work hours, page 2, lines 6-9, Section 4,
this just deletes the $100 fee for filing for a flexible work
hour plan.
CHAIR ANDERSON asked for a "thumbs up" if the department agreed.
He then remarked, "OK, there's a thumbs up for the record."
Number 0165
CHAIR ANDERSON removed his objection. He announced that there
being no other objection, Amendment 2 was adopted.
Number 0178
REPRESENTATIVE GATTO moved to report HB 402, as amended, out of
committee with individual recommendations and the accompanying
fiscal notes. There being no objection, CSHB 402(L&C) was
reported from the House Labor and Commerce Standing Committee.
HB 452-GUIDED SPORT FISHING
CHAIR ANDERSON announced that the final order of business would
be HOUSE BILL NO. 452, "An Act relating to licensing and
regulation of sport fishing services operators and fishing
guides; and providing for an effective date." [In packets was a
proposed committee substitute, Version D.]
Number 0250
REPRESENTATIVE CHERYLL HEINZE, Alaska State Legislature, sponsor
of HB 452, began by crediting the Alaska Department of Fish &
Game (ADF&G) with helping to craft a good bill. She explained
that previously she'd owned a fishing and guiding lodge near
Lake Creek that employed five guides. Currently, the only
information provided to ADF&G is garnered from sport fishing
registrations, which have no information regarding catch. She
said fishing guides increased from 3,800 in 1998 up to 4,559 in
2003. The percentage of nonresident fishing guides has been
increasing as well, and the average percentage of resident
guides from 1998 to 2003 was 72 percent. She told members:
This bill established mandatory reporting requirements
for all sport fishing businesses and sets license fees
that cover the cost of the licensing program. House
Bill 452 deals with two major needs in the sport
fishing guide industry: first is the need for
increased information gathering. This bill would
provide the Department of Fish and Game comprehensive
information on the number of fish caught, the location
of the catch, and number of boats used.
This information tool helps the department make
informed decisions that will help protect fish stocks
and their habitats, and to maximize their current and
future yields. This benefits not just the sport
fishing industry, but also ensures that we fulfill our
constitutional mandate to manage Alaska's resources to
their maximum sustained yield.
Number 0404
REPRESENTATIVE HEINZE continued:
The second part of the bill is the need for
standardized consumer safety. By mandating minimum
requirements for sport fishing guides and operators,
such as Red Cross first-aid training and liability
insurance, we can be sure that guides are trained in
the event of an emergency and that consumers are
covered under their insurance.
Thirdly, consumer confidence is improved by the
guarantee of certain standards, protections, and
training that their guides and operators will have.
The sport fishing industry is an important and driving
factor in Alaska's economy. No one believes that more
than I do. Such a vital industry needs to be
protected and supported in order to ensure that it
remains that way.
Number 0463
JON BITTNER, Staff to Representative Cheryll Heinze, Alaska
State Legislature, addressed the fees, noting that there are two
separate categories of license proposed. One is for a sport
guide operator, a $100 fee, and one is an actual sport guide.
If someone wants both the guide and the operator licenses, it's
still a flat $100 fee; they aren't "stackable." Discussing the
fiscal note from the Division of Sport Fish, he said:
The total operating expenditures for fiscal year 2005
that would be incurred by the increase of work brought
on by the extra reporting that the division would have
to do is roughly $345,000. The revenue brought in by
the fees from the two separate categories of licensing
would be $355,000. So this is not an unfunded
mandate.
MR. BITTNER concluded there'll be adequate funding for the
increase in jobs, four full-time employees and one part-time, as
well as the increase in equipment needed to handle the increased
work.
Number 0638
JIM PRESTON, Owner, Big Jim's Charters, a fishing and sight-
seeing operation that operates out of Auke Bay, began by saying
he wasn't certain Representative Heinze had offered the proposed
CS.
Number 0700
REPRESENTATIVE GATTO moved to adopt the proposed committee
substitute (CS), Version 23-LS1619\D, Utermohle, 2/27/04, as a
work draft. There being no objection, Version D was before the
committee.
MR. PRESTON continued:
That version came as a result of many operators
throughout the state making comments. ... They
responded ... favorably. This legislation is very
similar to legislation that was here in the 1990s;
[then-Representative Alan Austerman] had presented
this. It actually passed the House; it had gone to
the Senate and, unfortunately, it died in the Senate.
As a result of that, ... regulations were implemented,
which basically are what we're living under now.
For saltwater guides, the regulations that we live
under is basically what this committee substitute bill
is about, that is, that we have to register as an
operator, we have to register as a guide, we have to
make reports through the logbooks. ... The difference
is that we are not required by the regulations to have
an insurance policy, nor are we required to have a
first-aid card by the state. Of course, anyone who
does operate knows that the Coast Guard does require
that we have the first-aid certification.
For many years, many of us have tried to
professionalize our industry. It is an industry that
is one of the bright spots, I believe, in the Alaskan
economy, and it brings an awful lot of money in here.
When we go to the Board of [Fisheries] and argue our
case ... in terms of allocation issues, we keep being
told the same thing over and over: Go back and
regulate yourselves. Some of you have sat and
listened to some of us talk about moratoriums; some of
you have sat and listened to us talk about other kinds
of issues.
Number 0831
MR. PRESTON continued:
Not all, but many, many operators are very supportive
of the committee substitute for this as a definite
step in the right direction for being self-regulated.
It would do many things. It would, for once and for
all, list us formally as a sport fishing entity. The
issue of commercial fishing versus sport fishing will
go away with this. We'll be licensed as a sport
fishing entity, as charter operators, as a service
provider to sport fishermen. To me, that in and of
itself is worth the $100 fee that I would have to pay
as a combined operator and provider.
REPRESENTATIVE GATTO asked why Mr. Preston wasn't in favor of
the original bill.
MR. PRESTON said the number-one objection was to divulging the
confidential lists of clients and their license numbers. He
said there were inconsistencies with sport fishing clubs, and
subsistence and personal use fishing versus sport fishing, and
that these ambiguities were removed from [Version D].
Number 1084
KELLY HEPLER, Director, Division of Sport Fish, Alaska
Department of Fish & Game, introduced deputy director Rob Bentz
and said they'd listen and be available for questions. He
informed members that his department strongly supports this
bill.
Number 1150
GEORGE PATTERSON, Owner, "Catchalot" Charters, testified as
follows:
I completely agree with the bill that Representative
Heinze has here. I do have one concern on the fee of
$100. I believe that you need a nonresident fee such
as the commercial fishing crew have. In Alaska the
fee is $60 for resident and $180 for nonresident, and
I do believe that the nonresident should pay more for
their fishing fee.
Another ... item I have is: How are you going to
enforce this? The public safety, the park rangers,
the troopers, [and the Alaska Department of] Fish &
Game are stretched to the limit right now. ...
I would address this to Representative Rokeberg there.
I do believe that the sport fishing license should
have some real meaning to it. ... It should be set up
like our real estate license here in the state of
Alaska where new folks going into the sports fishery
need to pass a test [at] a certain level and some sort
of a continued education where they ... get their
Coast Guard safety, [and the Alaska Department of]
Fish & Game can give regulation courses.
Number 1320
DALE BONDURANT, Soldotna, said it appears HB 452 is an attempt
to place the commercial fishing industry within the same
constitutional protection as the sports fish guiding industry.
However, he finds that the two industries have been proven by
the Alaska Supreme Court to have nothing in common. He
indicated a court opinion said the following:
Admittedly, there is a difference between the
commercial fisherman and the professional guide. A
commercial fisherman takes his catch before selling it
to others for consumption while a guide does not
actually take game or fish, a privilege reserved for
the client. We view this as an insignificant
distinction that does not remove the (indisc.) guides
from the protection under the common use clause. The
work of a guide is so closely tied to the initial
taker that there is no meaningful basis distinguishing
between the rights of the taker under the common use
clause.
MR. BONDURANT said this clause is contained in Article VIII,
Section 3 [of the state constitution], Common Use, which says,
"Wherever occurring in their natural state, fish, wildlife, and
waters are reserved to the people for common use." Mr.
Bondurant concluded:
I've seen all this argument about "the commercial
fishing commission would submit their problems and the
guides would submit theirs." I figured then that they
were in the wrong field to that system. I also oppose
any additional fee for nonresident fishermen. They
had this problem with commercial fishing and I
understand that Alaska's going to have to eventually
pay $3 million because they were charging the
commercial fishing people nonresident license. So I'm
against that. This is a common property and resource,
and I think it's open for everybody.
Number 1562
JOEL HANSON, The Boat Company, noted that this company is a 25-
year-old Alaska corporation that operates educational charters,
sightseeing and shore excursions, and sport fishing. He pointed
out that four categories of concern with this bill had been
outlined in written testimony he'd provided. [Those concerns
related to new licenses and fees without new privileges and
benefits; the "chain of guilt" that creates liability for
fishing violations committed by a client; the unreasonable
burden to "physically possess" paperwork; and the unreasonable
burden to uphold unreasonable recording requirements.]
Number 1687
ROBERT WARD, Homer Charter Association, concurred with the
testimony of Mr. Preston and said:
There are two of us here representing 80 people in
total. ... We would like to see some adjustment on the
first fine, the first-offense penalty. At $500 it
seems like it's a little bit too (indisc.). We're not
dealing with a resource here; we're dealing with
paperwork, strictly administration. Other than that,
we feel that we can support the bill as it's
substituted.
Number 1725
TIM EVERS, Deep Creek Charter Boat Association, testified that
he was in accord with the previous testimony of Mr. Preston and
Mr. Ward. He said he felt the $500 fine was excessive and
should be reduced to $200. He also said many of his membership
want the fees for nonresidents in the industry raised over and
above those of the resident guides.
Number 1785
MARK HEM, Owner, Hem Charters, informed members that he didn't
support HB 452 because he felt the added burden of fees and
paperwork was excessive to operators. He said he didn't believe
the information contained in the required paperwork would
necessarily aid in management or protection of the fishery, and
he expressed concern about this bill's giving the Board of
Fisheries additional authority.
CHAIR ANDERSON asked whether Mr. Hem had Version D.
MR. HEM replied that he'd just received a copy and hadn't had
time to look at it closely.
CHAIR ANDERSON asked whether Mr. Hem could hold off and testify
at the next hearing.
MR. HEM agreed to testify again.
Number 1905
ALAN LeMASTER, Owner, Copper River Salmon Charters; Secretary,
Klutina River Association in the Copper Valley, testified:
Last Monday the Klutina River Association had a
lengthy discussion on HB 452 at our regular membership
meeting. As you might imagine, the concern was
significant. The objections were many and the fear by
some is that it will only foster more state control,
higher costs, greater workload, with little or no
return to those of us that are required to apply.
Many of our members expressed an understanding for the
reasons of the ADF&G and have little objection to the
support of the spirit of the bill. Most, however,
expressed a fear that it opens the door to the state's
ability to scrutinize our books, thus leaving us open
to criticism, regulation, penalties, fines, fees,
burdensome control by the state.
Most of the objections expressed by the membership
concern an inordinate amount of record keeping
required and fears that the persons outside the
ADF&G's "need to know" would pirate much of that
information, placing our businesses in jeopardy.
CHAIR ANDERSON asked if Mr. LeMaster was referring to Version D.
MR. LeMASTER affirmed that and continued:
Additionally, the fees suggested are only a beginning
point. Our fear is that all too often we see fees
like these escalate to much higher numbers in only a
few short years as the costs to maintain the program
increases. A case in point: the DEC [Department of
Environmental Conservation] passed regulations a few
years ago that required user fees of $50 for
inspections of food establishments. Now that fee has
expanded to $150 and, in my case, they are assessing
two or three different fees for the same business
because we have little differences within our
business. So, over the years the inspections have
been reduced and, in some cases, discontinued
altogether, and yet the fees go up. We call that
double taxation. In principle [that] will, without a
doubt, happen with the sports fishing industry as the
agencies learn that the maintenance costs of the
program are significant, rather than [those] being
suggested in your fiscal notes.
Number 2032
MR. LeMASTER continued:
Right now, in order for me to put my people on the
rivers up here in the Copper Valley, I have to buy a
business license, a Coast Guard license; I have to
have fishing permits; I have to have a driver's
license; I have to have insurance; I have to have a
fishing license and a king stamp; I have to have a
permit at the local store down here; and the guides
have to have a letter that shows that they work for
me.
There's about 10 or 12 things they have to have. And
after you compile all of this information, ... what do
you do about the people that aren't being guided -
which in our case in this valley are at least as many,
if not twice as many, people as are being guided on
our rivers. You're getting no information from them,
so how valid can all of this information be that you
compile, when it's only a significantly small portion
of the total amount that you need in order to make
good decisions? So with that, we as an association
took a vote, and it did not pass to support this bill
at this time.
CHAIR ANDERSON announced that HB 452 would be held over,
allowing for additional testimony.
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
5:35 p.m.
| Document Name | Date/Time | Subjects |
|---|