Legislature(1993 - 1994)
04/19/1994 05:40 PM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
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+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
April 19, 1994
5:40 p.m.
TAPES
SFC-94, #66, Side 1 (139-end)
SFC=94, #66, Side 2 (575-368)
CALL TO ORDER
Co-chairman Steve Frank convened the meeting at
approximately 5:40 p.m.
PRESENT
In addition to Co-chairman Frank, Senators Kelly, Kerttula,
and Sharp were present. Senator Rieger arrived soon after
the meeting began.
ALSO ATTENDING: Senator Little; Joe Swanson, Director,
Division of Elections, Office of the Governor; Gerald
Gallagher, Director, Division of Mining, Dept. of Natural
Resources; Larry E. Meyers, Director, Income and Excise
Audit Division, Dept. of Revenue; Tom Anderson, aide to
Representative Terry Martin; and aides to committee members
and other members of the legislature.
ALSO PARTICIPATING VIA TELECONFERENCE: Linda Crya-koorsgard,
Anchorage, Alaska; Roy Hoyt, Jr., Homer, Alaska.
SUMMARY INFORMATION
SB 305 - LICENSING OF LANDSCAPE ARCHITECTS
Discussion was had with Senator Little, Roy Hoyt,
and Linda Cyra-koorsgard. Work draft "O" (4/7/94,
Lauterbach) was ADOPTED. CSSB 305 (Fin) was
REPORTED OUT of committee with no recommendation,
accompanied by a fiscal note from the Dept. of
Commerce and Economic Development showing a cost
of $9.3 and revenues of $17.3.
SB 338 - CROSSROADS DISCOVERY CENTER\SHIP CRK
Amendment No. 1, by Senator Frank, was offered and
ADOPTED. CSSB 338 (Fin) was REPORTED OUT of
committee without recommendation, accompanied by a
zero fiscal note from the Dept. of Revenue.
SB 373 - "S.A.F.E." COMMISSION
Discussion ensued concerning replacing the word
"emergency" with "exigency." CSSB 373 (Fin),
incorporating the change to "exigency," was
REPORTED OUT of committee with individual
recommendations and a fiscal note from Legislative
Affairs Agency showing reappropriation funding of
$300.0.
HB 49 - ABSENTEE VOTING & USE OF FAX
Discussion was had with Tom Anderson and Joe
Swanson. SCS CSHB 49 (STA) was REPORTED OUT of
committee with individual recommendations,
accompanied by a $23.4 fiscal note from the Office
of the Governor, Division of Elections.
HB 498 - MINERAL EXPLORATION INCENTIVE CREDITS
Amendments 1 through 5 were discussed with Jerry
Gallagher of the Division of Mining. Amendments 1
through 3 were ADOPTED, and Amendments 4 and 5
were held pending, per a request by Senator Frank.
The bill was also HELD in committee for further
consideration.
SB 305 LICENSING OF LANDSCAPE ARCHITECTS
Upon convening the meeting, Co-chairman Steve Frank directed
that SB 305 be brought on for discussion and noted
teleconference links to Anchorage, Fairbanks, and Homer.
Senator Kerttula advised that he did not wish to offer
Amendment No. 1 and asked that it be withdrawn. No
objection having been raised, IT WAS SO ORDERED.
SENATOR LITTLE, sponsor of the legislation, came before
committee. She referenced a draft CSSB 305 (8-LS1617\O,
Lauterbach, 4/7/94) and explained that landscape
architecture is the profession that provides designs for
outdoor spaces. Practitioners must be familiar with
building codes, local ordinances, and health and safety
regulations. They are accredited and must complete a four
to five-year educational process. Presently, anyone in
Alaska can call himself or herself a landscape architect
without any training and can compete with a professional.
The proposed legislation represents an Alaska hire bill.
Many contracts require "stamped" professional landscape
architects for outdoor work. Because Alaska has no license
requirements, residents who are knowledgeable about Arctic
conditions, local plant materials, etc., are eliminated from
ability to perform these types of tasks. The proposed bill
will allow knowledgeable residents to compete on those
contracts. Landscape architects are licensed in 44 other
states. Lack of a license procedure in Alaska results in
this work being performed by out-of-state landscape
architects rather than local residents.
While the legislation originally requested additional
members for the board, the present version retains the board
"at the same size and adds an additional non-voting
landscape architect on the board for one year to advise the
board on establishing regulations for the licensing." The
non-voting member is not reimbursed for per diem or travel.
Licensing will involve one test per year rather than the
standard two.
Senator Little next described the differences between the
"O" version work draft and CSSB 305 (L&C). She referenced
page 9, lines 20 - 24, and explained that subsection (c) was
added to ensure that landscape architects do not perform
architectural, engineering, or land survey work.
Definitions commence at page 12, line 17. Senator Little
noted addition of "incidental and necessary" to the
definition of the "practice of landscape architecture." She
told members that language at page 12 provides a clear
delineation of "what landscape architects would be able to
do under the licensure." Language at page 13, line 31,
clarifies when the first test will be given and further
defines how long a person may practice landscape
architecture without a license until the initial test.
Senator Kerttula asked if the legislation contains
grandfather provisions. Senator Little responded
negatively, but advised that the bill provides that persons
who are licensed in other states would continue to be
licensed in Alaska. Those who are not licensed anywhere
would need to take the national exam. Discussion followed
regarding grandfathering based on past performance of work
in a given field, regardless of educational background.
Senator Little explained that those seeking to become
landscape architects would pay an examination fee and an
annual registration fee when approved by the board for
licensure. Senator Kerttula expressed concern that
regulations might prevent those who have actively engaged in
the profession up to this time from practicing in the
future. Senator Little spoke to clear delineation between
landscape construction and landscape architecture, advising
that the difference is the same as a construction contractor
and an architect. Those involved in landscape construction
will not be impacted by the proposed bill. Senator Little
described the situation in California where those who do not
have licenses are designated landscape designers while
licensed individuals are landscape architects. Co-chair
Frank voiced his understanding that the proposed bill would
not prohibit an individual's ability to continue to practice
in the field. It merely restricts what "that person may
call themselves."
Senator Sharp referenced discussion in Senate Labor and
Commerce to the effect that many bids call for landscape
architects. Those individuals must be professionally
qualified, and that has necessitated use of out-of-state
persons. Senator Little concurred. She advised that
federal contracts require licensed professionals. Projects
often end up employing professionals from out of state who
know nothing about permafrost, Arctic plant materials, etc.
The public will be better served by utilizing knowledgeable
locals to perform this work.
In her concluding comments, Senator Little noted that all
costs of the legislation will be borne by practitioners.
There will be no cost to the state. The April 6, 1994,
fiscal note from the Dept. of Commerce and Economic
Development, accurately reflects the proposed work draft.
TELECONFERENCE
ROY HOYT, JR., spoke via teleconference from Homer, Alaska.
He inquired concerning the number of landscape architects
presently in Alaska. Senator Little responded, "There are
approximately 50 who are members of the American Society of
Landscape Architects." She noted it is costly to belong to
the society and voiced her expectation that additional
professionals, who are not members, also reside within the
state.
LINDA CRYA-KOORSGARD, Landscape Architect, spoke via
teleconference from Anchorage and offered to answer
questions concerning the bill. No questions were raised.
Senator Kelly attested to support for the bill by the Alaska
Chapter of the American Society of Landscape Architects.
Co-chair Frank queried members regarding disposition of the
bill. Senator Kelly MOVED for adoption of CSSB 305 (Fin)
("O" version). No objection having been raised, CSSB 305
(Fin) was ADOPTED. Co-chair Frank next MOVED that CSSB 305
(Fin) pass from committee with individual recommendations.
No objection having been raised, CSSB 305 (Fin) was REPORTED
OUT of committee with a fiscal note from the Dept. of
Commerce and Economic Development showing revenues of $17.3
and costs of $9.3. All members present signed the committee
report "no rec." (Senator Jacko was not in attendance and
did not sign.)
CS FOR HOUSE BILL NO. 49(FIN) am
An Act relating to absentee voting, to electronic
transmission of absentee ballot applications, to
delivery of ballots to absentee ballot applicants by
electronic transmission, and enacting a definition of
the term `state election' for purposes of absentee
voting; and providing for an effective date.
Co-chair Pearce directed that CSHB 49(Fin)am be brought on
for discussion and referenced file materials.
TOM ANDERSON, aide to Representative Martin, and JOE
SWANSON, Director of Elections, Office of the Governor, came
before committee. Mr. Anderson explained that the
legislation results from numerous constituent requests from
out-of-state peace corps workers, traveling residents,
disabled individuals, and members of the military who are
disenfranchised by postal service in that their election
ballots are not timely. The conceptual intent of the
original bill was to allow everyone to vote by electronic
transmission if a time crunch was involved. There was heavy
opposition from the former head of the division of
elections. The bill was then limited to those voting
outside of the United States. It has since reverted back to
the original target to allow all individuals voting absentee
to use electronic transmission if they desire. The approach
is not to replace the mail but to alleviate time
consumption. The legislation is supported by the Division
of Elections as well as the Alaska Federation of Natives and
the Dept. of Defense Federal Voting Assistance Program.
Under HB 49, the individual desiring to utilize electronic
transmission or fax could request, receive, and return an
application by fax. Application would have to be made
within four days of the election. The voter may then return
a marked ballot by fax. The ballot must be accompanied by a
signed waiver stating the voter recognizes that an election
official will be reviewing the ballot and recording it. The
absentee voter must also take an oath before a member of the
armed services or two U.S. citizens eighteen years or older
or an individual in any of the fifty states who can
administer an oath.
Senate State Affairs amended the bill to provide that the
voter receive faxed confirmation of Division of Election's
receipt of the ballot. The proposed bill does not cover
municipal or borough elections, REAA, coastal zone
management board elections, or local option elections. It
would not go into effect until the 1994 general election.
Senator Rieger directed attention to page 3, lines 5, 6, and
7 and asked for an explanation. Mr. Anderson explained that
an individual could not register to vote by fax. Mr.
Swanson noted that the division currently allows those who
request an absentee ballot by mail to register at the same
time. The sentence in question prohibits that by fax.
Senator Rieger inquired regarding the potential for fraud.
Mr. Anderson referenced House Judiciary testimony by the
Dept. of Law indicating that the choice may be either voting
electronically with the understanding that an election
official will be privy to your ballot or being unable to
timely vote at all. The number of voters utilizing this
process is expected to be relatively small.
Senator Kelly pointed to language within the bill requiring
that the Division of Elections adopt regulations to ensure
the integrity of the ballot box.
Responding to concerns relating to potential for fraud, Mr.
Swanson said that the proposed bill opens no new avenues for
fraud that do not already exist through the normal voting
process. Processing of faxed ballots will be even more
stringent than current absentee ballots which are
individually numbered and traced. The individual's voter
registration will be checked and two identifiers (birth
date, social security number, voter identification number)
will have to be provided for cross-check before the ballot
will be accepted. The process is almost identical to that
for absentee balloting by mail.
Discussion followed regarding ballot secrecy under the
proposed process. Mr. Swanson explained that only one
person would be privy to the ballot to ensure that fax
transmission is readable.
Senator Kerttula voiced skepticism concerning the proposal.
Co-chair Pearce called for additional testimony. None was
forthcoming. She then queried members regarding
disposition. Senator Kelly MOVED that SCS CSHB 49 (STA)
pass from committee with individual recommendations.
Senator Kerttula voiced his OPPOSITION. SCS CSHB 49 (STA)
was REPORTED OUT of committee with a $23.4 fiscal note from
the Division of Elections, Office of the Governor. Senators
Kelly and Sharp signed the committee report with a "do pass"
recommendation. Co-chairs Pearce and Frank and Senator
Rieger signed "no recommendation." Senator Kerttula signed
"Do not pass."
CS FOR HOUSE BILL NO. 498(FIN)
An Act providing for exploration incentive credits for
activities involving locatable and leasable minerals
and coal deposits on certain land in the state; and
providing for an effective date.
Co-chair Pearce directed that CSHB 498 (Fin) be brought on
for discussion and referenced the following amendments:
Amendment No. 1, by Senator Kerttula
Amendment No. 2, by Co-chair Frank
Amendment No. 3, by Senator Kelly
Amendment No. 4, by Senator Kelly
Amendment No. 5, by Senator Kelly
Senator Kerttula noted that Amendment No. 1 contains
language that would "amend into" a subsequent amendment by
Senator Kelly. He then MOVED for adoption of Amendment No.
1. In response to a question from Co-chair Frank, Senator
Kerttula explained that the amendment responds to his belief
that all hire should be local, and the tax credit should not
apply to hire that is not local. No objection having been
raised, Amendment No. 1 was ADOPTED.
Co-chair Frank said that Amendment No. 2 involves technical
amendments to the bill. He then asked that department staff
speak to the change. JERRY GALLAGHER, Director, Division of
Mining, Dept. of Natural Resources, advised of concern that
the granting of tax credits on trust land would create legal
complications. Insertion of "unless otherwise provided by
law" allows the commissioner to withhold tax credits from
such lands. Co-chair Pearce called for objections to
adoption of Amendment No. 2. No objection having been
raised, Amendment No. 2 was ADOPTED.
Senator Kelly explained that Amendment No. 3 removes
retroactive application of the credit to January 1, 1994.
He said that supporters of the legislation have no objection
to removal since the January date was arbitrarily selected.
He then MOVED for adoption of Amendment No. 3. Senator
Kerttula concurred in support. No objection having been
raised, Amendment No. 3 was ADOPTED.
Speaking to Amendment No. 4, Senator Kelly explained that
research into legislation dealing with oil and gas
exploration credits indicates a $5 million limit per site
and a limit of $50 million total. In order to ensure that
limitations are in place, he proposed addition of the
following language:
The amount of an exploration incentive credit
extended under this chapter may not exceed an
amount per parcel or site, as determined by the
commissioner by regulation.
The Senator reiterated need for oversight of totals
associated with these types of credits. Co-chair Pearce
referenced fiscal note information indicating that the
maximum amount of credits that could have been claimed in
1993 totals approximately $17 million.
End: SFC-94, #66, Side 1
Begin: SFC-94, #66, Side 2
Senator Kelly stressed that, in light of ongoing budget
cuts, the legislature must protect existing revenues from
erosion.
Co-chair Frank inquired concerning the types of taxes to
which credits would be applied. Mr. Gallagher said that the
bill applies to three separate payments:
1. Royalty on state land.
2. The mining license tax that applies to all lands--
a form
of severance tax.
3. Corporate income tax.
Senator Kelly explained that the oil and gas lease credit
bill contains the above-mentioned cap to fix a figure in
statute. Rather than try to do that, he said he was
proposing the language within Amendment No. 4.
Co-chair Frank requested that he be allowed a day to review
implications of the proposed amendment. Co-chair Pearce
directed that Amendment No. 4 be held for subsequent
consideration.
Speaking to Amendment No. 5, Senator Kelly noted that the
oil and gas tax credit bill was limited to 50% on state
lands and 25% on lands not owned by the state. The proposed
amendment attempts to duplicate that requirement in CSHB 498
(Fin). He said that he saw no reason for the Alaska public
to subsidize the exploration tax credit on private property.
Senator Kerttula concurred, saying that there should be no
subsidy on non-state-owned properties.
Co-chair Frank requested that Amendment No. 5 also be held
for subsequent discussion.
Senator Kelly referenced language within the amendment
relating to "eligible costs." He explained that the
language was added by the drafter to delineate costs that
are eligible for tax from those that are not. It is
intended to prevent an organization from padding the actual
cost of exploration at the site with overhead and other
types of costs that are not directly related. Amendment No.
1, by Senator Kerttula, relating to labor costs dovetails
with these provisions.
Senator Sharp voiced his understanding that the credit was
limited to labor only. Senator Kelly advised that it covers
other eligible costs.
Co-chair Pearce directed that CSHB 498(Fin) be HELD in
committee for additional review.
SENATE BILL NO. 338
An Act relating to the issuance of revenue bonds for
acquisition and construction of the Alaska Discovery
Center for the Ship Creek Project in Anchorage;
relating to a study of the feasibility and financial
viability of the Alaska Discovery Center; relating to
construction of the Alaska Discovery Center; and
providing for an effective date.
Co-chair Pearce directed that SB 338 be brought on for
discussion and referenced a proposed amendment by Co-chair
Frank. Co-chair Frank explained that the amendment is
intended to make clear that no railroad funds are "to go
into this project" nor are railroad assets to be used to
support the financing. Senator Kelly said he had no
objection to the amendment since it embodies his intent as
well. Co-chair Frank MOVED for adoption of Amendment No. 1.
No objection having been raised, Amendment No. 1 was
ADOPTED. Senator Kelly MOVED for passage of CSSB 338
(Finance) with individual recommendations. No objection
having been raised, CSSB 338 (Fin) was REPORTED OUT of
committee with a zero fiscal note from the Dept. of Revenue.
Senators Kelly and Rieger signed the committee report with a
"do pass" recommendation. Co-chairs Pearce and Frank and
Senator Sharp signed "no recommendation." Senators Kerttula
and Jacko did not sign the report.
SENATE BILL NO. 373
An Act relating to a comprehensive state financial plan
and to the Solving Alaska's Fiscal Emergency (S.A.F.E.)
Commission; and providing for an effective date.
Co-chair Pearce directed that SB 373 be brought on for
discussion and referenced a draft CSSB 373 (8-LS1876\J,
Cook, 4/19/94). Senator Kelly explained that the draft
contains a major departure from the original bill in that it
removes the earlier Section 2 which mandated action by the
legislature as an alternative to binding implementation of
the S.A.F.E. commission financial plan. The draft
establishes a nine-member advisory commission to work during
the interim to develop a six-year plan and return a report
to the next legislature. At that point the commission would
terminate. Senator Kelly acknowledged that the original
bill envisioned a long-term commission with revolving
members. There was not sufficient support for that
approach.
Senator Kelly MOVED for adoption of CSSB 373 ("J" version).
Co-chair Frank MOVED to remove the word "emergency" from the
name of the commission and insert the word "gap" in place
thereof. He voiced his belief that use of "emergency" is
inappropriate. Senator Kelly advised that he did not
disagree with the concept but suggested substitution of a
word commencing with the letter "e" to retain the acronym,
S.A.F.E., for designation of the commission. Senator Rieger
attested to real dollar gaps in state revenues necessitating
a $200 million reduction next year and a like amount the
year thereafter. He said he disagreed with the S.A.F.E.
Commission approach but does not disagree with the
contention that an emergency exists. He suggested that the
Governor should be undertaking the tasks contemplated by the
commission.
Co-chair Pearce called for action on the motion for adoption
of CSSB 373 ("J" version). No objection having been raised,
CSSB 373 (Fin) was ADOPTED.
Co-chair Frank then MOVED to remove the word "emergency" and
replace it with "exigency." No objection having been
raised, the motion CARRIED, and the replacement was SO
ORDERED.
Discussion followed regarding staffing for the Commission.
Senator Kelly spoke to utilization of legislative staff for
support work.
Senator Kelly MOVED that CSSB 373 (Finance) pass from
committee. CSSB 373 (Finance) was REPORTED OUT of committee
with a fiscal note from the Legislative Affairs Agency
showing reappropriation funding of $300.0. Co-chair Pearce
and Senator Kelly signed the committee report with a "do
pass" recommendation. Co-chair Frank and Senators Rieger
and Sharp signed "no recommendation."
CS FOR SENATE BILL NO. 67(FIN)
An Act amending provisions of ch. 66, SLA 1991, that
relate to reconstitution of the corpus of the mental
health trust and to the manner of enforcement of the
obligation to compensate the trust; and providing for
an effective date.
Co-chair Pearce announced that a draft CSSB 67 2d(Fin) as
well as a copy of a proposed amendment requested by
Representative James would be distributed to members'
offices for review prior to hearing at the next meeting.
ADJOURNMENT
The meeting was adjourned at approximately 6:45 p.m.
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