Legislature(1999 - 2000)

04/15/2000 03:15 PM Senate FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                          MINUTES                                                                                             
                 SENATE FINANCE COMMITTEE                                                                                     
                      April 15, 2000                                                                                          
                          3:15 PM                                                                                             
                                                                                                                                
TAPES                                                                                                                       
                                                                                                                                
SFC-00 # 92, Side A and Side B                                                                                                  
                                                                                                                                
CALL TO ORDER                                                                                                               
                                                                                                                                
Co-Chair   John   Torgerson    convened   the   meeting   at                                                                    
approximately 3:15 PM                                                                                                           
                                                                                                                                
PRESENT  Co-Chair  John  Torgerson, Co-Chair  Sean  Parnell,                                                                
Senator  Al   Adams,  Senator  Lyda  Green,   Senator  Randy                                                                    
Phillips, Senator Gary Wilken, Senator Donley.                                                                                  
                                                                                                                                
Senator P.  Kelly and Senator  Loren Leman were  not present                                                                    
for the meeting.                                                                                                                
                                                                                                                                
Also Attending:  JAMES BALDWIN, Assistant  Attorney General,                                                                  
Department of  Law; WENDY REDMAN, Vice  President, Statewide                                                                    
Programs, University of  Alaska-Fairbanks; DAVID GUTTENBERG,                                                                    
Staff,  Representative John  Davies;  EDDIE GRASSER,  Staff,                                                                    
Representative   Beverly   Masek;  PETER   FELLMAN,   Staff,                                                                    
Representative   John    Harris;   LORALI    MEIER,   Staff,                                                                    
Representative   Beverly  Masek;   PAUL  GROSSI,   Director,                                                                    
Division of  Workers' Compensation, Department of  Labor and                                                                    
Workforce  Development; ROBERT  LOHR, Director,  Division of                                                                    
Insurance, Department of Community & Economic Development.                                                                      
                                                                                                                                
Attending via Teleconference: BILL WARD, Delta Junction.                                                                      
                                                                                                                                
SUMMARY INFORMATION                                                                                                         
                                                                                                                                
SB 310-G.O.BONDS: SCHOOLS & UNIVERSITY                                                                                          
                                                                                                                                
The  Committee heard  from  the Department  of  Law and  the                                                                    
University of Alaska with  consideration given to Amendments                                                                    
#5  & #6.    The  bill was  HELD  in  Committee for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
SB 311-G.O.BONDS: TRANSPORTATION PROJECTS                                                                                       
                                                                                                                                
CS SB  311 (FIN) was  reported out  of Committee with  a "no                                                                    
recommendation" and with a fiscal  note by the Department of                                                                    
Revenue.                                                                                                                        
                                                                                                                                
HB  25-RIVER HABITAT PROTECTION TAX CREDIT                                                                                      
                                                                                                                                
HB  25  was  reported  out  of  Committee  with  "individual                                                                    
recommendations" and with fiscal  notes by the Department of                                                                    
Fish and  Game and  the Department  of Community  & Economic                                                                    
Development.                                                                                                                    
                                                                                                                                
HB 114-REPEAL PROHIBITION ANTLERLESS MOOSE                                                                                      
                                                                                                                                
SCS HB  114 (RES) was reported  out of Committee with  a "do                                                                    
pass"  recommendation  and  with  two fiscal  notes  by  the                                                                    
Department of Fish and Game.                                                                                                    
                                                                                                                                
HB 204-ELK FARMING                                                                                                              
                                                                                                                                
HB 204 was reported out of Committee with a "do pass"                                                                           
recommendation and with fiscal notes by Department of                                                                           
Natural Resources and Department of Fish and Game.                                                                              
                                                                                                                                
HB 272-MUNICIPAL TAX: LOW INCOME HOUSING                                                                                        
                                                                                                                                
SCS  HB  272  (FIN)  was  reported  out  of  Committee  with                                                                    
"individual recommendations"  and with a fiscal  note by the                                                                    
House C&RA Committee.                                                                                                           
                                                                                                                                
HB 290-STRANDED GAS PIPELINE CARRIERS                                                                                           
                                                                                                                                
CS HB 290 (FIN) was reported out of Committee with a "do                                                                        
pass" recommendation and with fiscal notes by Department of                                                                     
Revenue, Department of Natural Resources, and Department of                                                                     
Community & Economic Development.                                                                                               
                                                                                                                                
HB 378-FEES FOR WORKERS COMP AND WORKER SAFETY                                                                                  
                                                                                                                                
Co-Chair  Torgerson  noted that  HB  378  would be  HELD  in                                                                    
Committee for further consideration.                                                                                            
     SENATE BILL NO. 310                                                                                                        
     "An Act providing  for and relating to  the issuance of                                                                    
     general obligation bonds for  the purpose of paying the                                                                    
     state cost  of school,  University of Alaska,  and port                                                                    
     and  harbor  capital  projects; and  providing  for  an                                                                    
     effective date."                                                                                                           
                                                                                                                                
JAMES  BALDWIN, Assistant  Attorney  General, Department  of                                                                    
Law, advised  that he  had prepared a  memo as  requested by                                                                    
Senator Torgerson  regarding concerns whether  certain items                                                                    
contained in  SB 310 would  qualify as  capital improvements                                                                    
for  the purpose  of issuing  general obligation  bond debt.                                                                    
[Copy on File].                                                                                                                 
                                                                                                                                
Mr. Baldwin  cited that  the Alaska  Supreme Court  has made                                                                    
two decisions relative  to the concern:   Wright versus City                                                                  
of Palmer and  City of Juneau versus Hixson.   The Court has                                                                
not provided  a specific definition of  capital improvement,                                                                    
but rather defined  it by example.  Generally,  it refers to                                                                    
permanent   betterment  of   permanent   structures.     The                                                                    
Department has concluded that  major renovations designed to                                                                    
preserve the  permanency of  a building  would qualify  as a                                                                    
capital  improvement.     Expenditures  for  property  which                                                                    
become a legal  fixture would be a capital  improvement.  In                                                                    
certain circumstances, there  can be expenditures associated                                                                    
with  capital projects  that might  not  otherwise become  a                                                                    
capital item.                                                                                                                   
                                                                                                                                
Mr.  Baldwin suggested  consideration  of,  for the  record,                                                                    
that the  nature of  any doubtful  project be  considered in                                                                    
order that  it may be  defended against a  challenge brought                                                                    
when the bonds are sold.                                                                                                        
                                                                                                                                
Senator Phillips  referenced Page 3,  Line 11.  He  asked if                                                                    
the allocated $11.7 million dollars would qualify.                                                                              
                                                                                                                                
Mr.  Baldwin  understood that  was  to  be the  State's  70%                                                                    
contribution.    The  municipalities   are  under  the  same                                                                    
constitutional administration  and must use their  bonds for                                                                    
capital  improvements.   He assumed  that  those bonds  were                                                                    
issued for capital improvements.                                                                                                
                                                                                                                                
Senator Phillips referenced  Page 4, Line 12  & 13 requested                                                                    
allocation in  the amount of  $25.1 million dollars  for the                                                                    
University of  Alaska -  Fairbanks in  deferred maintenance.                                                                    
He   asked  if   that  would   qualify  under   the  capital                                                                    
improvement projects (CIP).                                                                                                     
                                                                                                                                
Mr. Baldwin noted  that he did not know and  that he did not                                                                    
have access  to all  the required  information to  make that                                                                    
determination.                                                                                                                  
                                                                                                                                
Senator Phillips asked further clarification of the memo.                                                                       
                                                                                                                                
Mr.  Baldwin reiterated  the contents  of the  memo, stating                                                                    
that if  it were to  be ordinary repair and  maintenance, it                                                                    
would  not  qualify under  the  CIP  guidelines; however,  a                                                                    
major  renovation,   repair  or  maintenance   necessary  to                                                                    
maintain the  permanency of  the facility,  could be  a CIP.                                                                    
He noted  that the  current Court  conclusions have  not yet                                                                    
gone that far.                                                                                                                  
                                                                                                                                
Co-Chair  Torgerson asked  if  the  proposition proposal  in                                                                    
Anchorage  passes, would  Anchorage  then  be restricted  on                                                                    
major maintenance  projects that met the  criteria submitted                                                                    
by the Department.                                                                                                              
                                                                                                                                
Mr. Baldwin responded that the  information contained in the                                                                    
voters pamphlets  becomes a "contract"  with the  voters and                                                                    
that it can not be  parted from without violating the public                                                                    
trust.  He  presumed that the ballot  materials would inform                                                                    
the voters what the project consists of.                                                                                        
                                                                                                                                
Senator   Adams  questioned   the  distinguishment   between                                                                    
repairs  and  maintenance.   He  asked  the  judgement  call                                                                    
needed to stay in "repaired maintenance".                                                                                       
                                                                                                                                
Senator  Adams suggested  that perhaps  there  should be  an                                                                    
expenditure  limitation  on  the  capital  projects  over  a                                                                    
certain amount.                                                                                                                 
                                                                                                                                
Mr. Baldwin  replied that  the total  bond issue  drives the                                                                    
"economics" because  of the cost  of issuance.   He believed                                                                    
that a major  upgrade would most likely  fall under "capital                                                                    
improvement".                                                                                                                   
                                                                                                                                
Co-Chair Torgerson  pointed out  that there  had not  been a                                                                    
completed  list   submitted  by  the   University,  instead,                                                                    
submitted by  building name  only.  He  advised that  he had                                                                    
prepared some amendments to the proposed legislation.                                                                           
                                                                                                                                
Senator  Donley  MOVED to  adopt  Amendment  #5.   [Copy  on                                                                    
File].                                                                                                                          
                                                                                                                                
Co-Chair  Torgerson  explained   that  the  amendment  would                                                                    
remove all  reference to issuing  bonds for port  and harbor                                                                    
projects in SB 310 they had been incorporated into SB 311.                                                                      
                                                                                                                                
There being NO OBJECTION, Amendment #5 was adopted.                                                                             
                                                                                                                                
Senator  Donley  MOVED to  adopt  Amendment  #6.   [Copy  on                                                                    
File].                                                                                                                          
                                                                                                                                
Co-Chair  Torgerson  clarified   that  the  amendment  would                                                                    
delete the  "$943,565" dollars  on Page  5, Lines  13-14 and                                                                    
would  insert  "an  amount  equal  to  one  percent  of  the                                                                    
principle amount of the bonds, or  as much of that amount as                                                                    
is found necessary".                                                                                                            
                                                                                                                                
Senator Adams inquired what would  occur if that amount were                                                                    
higher than 1% of the principle.                                                                                                
                                                                                                                                
Co-Chair  Torgerson explained  that  the  agency could  then                                                                    
come back to the Committee to request an increase.                                                                              
                                                                                                                                
There being NO OBJECTION, Amendment #6 was adopted.                                                                             
                                                                                                                                
Senator Phillips requested a list  of the general obligation                                                                    
(GO) bonds.   He believed that there were  items that should                                                                    
not  be  included  in  these  bonds.   He  objected  to  the                                                                    
proposed methodology.                                                                                                           
                                                                                                                                
Senator  Adams recommended  that a  representative from  the                                                                    
University of Alaska speak to the submitted requests.                                                                           
                                                                                                                                
Co-Chair Torgerson  emphasized that  if the requests  do not                                                                    
meet  the criteria  that they  should be  deducted from  the                                                                    
bill.     He requested  greater detail  regarding all  three                                                                    
campuses for the University requests.                                                                                           
                                                                                                                                
WENDY   REDMAN,   Vice    President,   Statewide   Programs,                                                                    
University  of Alaska-Fairbanks,  stated  that the  language                                                                    
used in  the past for the  statewide GO bonds in  the Alaska                                                                    
Housing Finance Corporation (AHFC)  bond issue was "deferred                                                                    
maintenance/renewal and replacement/code  compliance".  That                                                                    
phrase  provides the  most  flexibility  to the  University.                                                                    
She requested that if possible,  that would be the preferred                                                                    
language.                                                                                                                       
                                                                                                                                
Co-Chair  Torgerson asked  if there  was  a list  indicating                                                                    
work to be done on each building.                                                                                               
                                                                                                                                
Ms.  Redman commented  that the  list does  provide specific                                                                    
types  of projects  for  each facility.    She inquired  the                                                                    
level of detail needed.                                                                                                         
                                                                                                                                
Co-Chair Torgerson  interjected that  the Committee  wants a                                                                    
more thorough  explanation of each  project.  He  noted that                                                                    
the "rule"  he follows  is if  it extends  the "life  of the                                                                    
building".                                                                                                                      
                                                                                                                                
Ms.  Redman commented  that  no  "on-going" maintenance  had                                                                    
been  included in  the  request.   She  noted  that it  were                                                                    
present problems  to break  it down  to specific  details of                                                                    
each project.   Some projects  are a "best guess"  until the                                                                    
space is taken  apart, making it difficult  to determine the                                                                    
actual costs.                                                                                                                   
                                                                                                                                
Co-Chair  Torgerson  noted that  SB  310  would be  HELD  in                                                                    
Committee for further consideration.                                                                                            
     SENATE BILL NO. 311                                                                                                        
     "An Act providing  for and relating to  the issuance of                                                                    
     general obligation bonds for  the purpose of paying the                                                                    
     state  cost of  port and  harbor capital  projects; and                                                                    
     providing for an effective date."                                                                                          
                                                                                                                                
Co-Chair Torgerson spoke  to Amendment #1 & #2.   [Copies on                                                                    
File].                                                                                                                          
                                                                                                                                
Amendment #1 would  remove the matching funds  from the bond                                                                    
project list  because the  match for Kake  was funded  in SB
192.                                                                                                                            
                                                                                                                                
Amendment #2  would delete language  on Page 3,  Lines 9-10,                                                                    
"the amount equal to one  percent of the principal amount of                                                                    
the  bonds,  or   as  much  of  that  amount   as  is  found                                                                    
necessary"; it would insert "an  amount equal to one percent                                                                    
of the  principal amount of  the bonds,  or as much  of that                                                                    
amount as is found necessary".                                                                                                  
                                                                                                                                
Senator Adams MOVED  to adopt Amendment #1.   There being NO                                                                    
OBJECTION, the amendment was adopted.                                                                                           
                                                                                                                                
Senator Adams MOVED  to adopt Amendment #2.   There being NO                                                                    
OBJECTION, the amendment was adopted.                                                                                           
                                                                                                                                
Senator  Leman  MOVED to  adopt  Amendment  #3, which  would                                                                    
"round the numbers off by  eliminating the last three digits                                                                    
and  adding  zeros".    There being  NO  OBJECTION,  it  was                                                                    
adopted.                                                                                                                        
                                                                                                                                
Senator  Wilken MOVED  to  report  CS SB  311  (FIN) out  of                                                                    
Committee  with  individual  recommendations  and  with  the                                                                    
accompanying  fiscal notes.   There  being NO  OBJECTION, it                                                                    
was so ordered.                                                                                                                 
                                                                                                                                
CS  SB 311  (FIN) was  reported  out of  Committee with  "no                                                                    
recommendation" and with a fiscal  note by the Department of                                                                    
Revenue.                                                                                                                        
     HOUSE BILL NO. 272                                                                                                         
     "An Act relating  to the tax assessment by  a home rule                                                                    
     or general  law municipality of housing  that qualifies                                                                    
     for the  low-income housing  credit under  the Internal                                                                    
    Revenue Code; and providing for an effective date."                                                                         
                                                                                                                                
                                                                                                                                
Senator Leman MOVED  that the Committee adopt  work draft 1-                                                                    
LS1148\B,  Chenoweth, 4/14/00,  as the  version of  the bill                                                                    
before the Committee.                                                                                                           
                                                                                                                                
Senator Adams  OBJECTED for the  purpose of discussion.   He                                                                    
pointed out  that the "grandfather clause"  had been removed                                                                    
in the work draft.                                                                                                              
                                                                                                                                
Co-Chair Torgerson  commented that  a community  could still                                                                    
be "grandfathered",  however, the local assembly  would also                                                                    
be  responsible to  take action.   The  language would  give                                                                    
local  governments  the  authority   to  pass  an  ordinance                                                                    
authorizing the resolution.                                                                                                     
                                                                                                                                
Senator  Adams  WITHDREW  his OBJECTION  to  adopt  the  "B"                                                                    
version.                                                                                                                        
                                                                                                                                
Senator Leman referenced  Page 2, Line 1, "the  value of the                                                                    
property and  the actual income derived  from the property".                                                                    
He asked if that was the correct standard.                                                                                      
                                                                                                                                
JONATHAN  LACK, Staff,  Representative Rick  Halford, stated                                                                    
that the  question of income  derived had not yet  come into                                                                    
discussion.   The uniform property  standard adopted  by the                                                                    
property assessors  now indicates  that the  income approach                                                                    
does not address what has  been received.  He clarified that                                                                    
the income approach is what could be received.                                                                                  
                                                                                                                                
Senator  Leman  explained  given that  understanding  he  no                                                                    
longer questioned that  section.  He inquired if  this was a                                                                    
current accounting standard.                                                                                                    
                                                                                                                                
Mr. Lack  stated that it  is and that the  uniform assessors                                                                    
group  uses  it.    He  interjected  that  the  assessor  in                                                                    
Anchorage does not obey the established standard.                                                                               
                                                                                                                                
Senator Leman countered that if  that assessor does not obey                                                                    
the standard,  what assurance  does the  State have  that he                                                                    
will obey the proposed law.                                                                                                     
                                                                                                                                
Mr. Lack  replied that there  are working  drafts addressing                                                                    
the  assessor establishing  the  standard.   The work  draft                                                                    
before the Committee, has the  standard adopted by the local                                                                    
governing body.                                                                                                                 
                                                                                                                                
Senator Donley reinforced that point  and the possibility of                                                                    
leaving it  empty.  The  language references the  maximum of                                                                    
what could be derived.                                                                                                          
                                                                                                                                
Senator Leman  recommended language  indicating it  could be                                                                    
from income derived from property at full occupancy.                                                                            
                                                                                                                                
Senator  Donley MOVED  the  changes  recommended by  Senator                                                                    
Leman, Page  2, Line  2, following "property"  inserting "at                                                                    
full occupancy" as Amendment #1.                                                                                                
                                                                                                                                
Mr.  Lack acknowledged  that there  are some  questions that                                                                    
Senator   Halford   has   about   the   proposed   committee                                                                    
substitute.  He was not confident to answer the question.                                                                       
                                                                                                                                
There being NO OBJECTION, Amendment #1 was adopted.                                                                             
                                                                                                                                
Senator Green  asked if  the amendment  would apply  on Line                                                                    
14.  She  MOVED that language be added to  Line 14 following                                                                    
"property".                                                                                                                     
                                                                                                                                
There being NO OBJECTION, the change was made.                                                                                  
                                                                                                                                
Senator  Leman MOVED  a  text  change to  Page  2, Line  17,                                                                    
deleting "relating"  and inserting  "related".   There being                                                                    
NO OBJECTION, it was adopted.                                                                                                   
                                                                                                                                
Senator  Leman MOVED  to  report  SCS HB  272  (FIN) out  of                                                                    
Committee  with  individual  recommendations  and  with  the                                                                    
accompanying fiscal note.                                                                                                       
                                                                                                                                
Senator Phillips OBJECTED.                                                                                                      
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR:      Donley,   Leman,    Adams,   Wilken,   Green,                                                                    
               Parnell, Torgerson                                                                                               
OPPOSED:       Phillips                                                                                                         
                                                                                                                                
Senator P. Kelly was not present for the vote.                                                                                  
                                                                                                                                
The MOTION PASSED (7-1).                                                                                                        
                                                                                                                                
SCS  HB  272  (FIN)  was  reported  out  of  Committee  with                                                                    
"individual recommendations"  and with a fiscal  note by the                                                                    
House C&RA Committee.                                                                                                           
     HOUSE BILL NO. 25                                                                                                          
     "An Act relating to a municipal river habitat                                                                              
     protection tax credit."                                                                                                    
                                                                                                                                
DAVID   GUTTENBERG,  Staff,   Representative  John   Davies,                                                                    
offered to  answer questions of  the members.   He explained                                                                    
that the  bill is a  land management tool that  provides the                                                                    
option  of  protecting  fish habitat  along  the  rivers  by                                                                    
offering  a  tax  credit  to  property  owners  along  those                                                                    
waterways.   It would not  be an unfunded mandate  and would                                                                    
be entirely optional at the local government level.                                                                             
                                                                                                                                
Senator Wilken spoke  in support of the  bill and encouraged                                                                    
the Committee's support.                                                                                                        
                                                                                                                                
Senator Wilken MOVED  to report HB 25 out  of Committee with                                                                    
individual recommendation  and with the  accompanying fiscal                                                                    
notes.  There being NO OBJECTION, it was so ordered.                                                                            
                                                                                                                                
HB  25  was  reported  out  of  Committee  with  "individual                                                                    
recommendations" and with fiscal  notes by the Department of                                                                    
Fish and  Game and  the Department  of Community  & Economic                                                                    
Development.                                                                                                                    
                                                                                                                                
Co-Chair Torgerson                                                                                                              
     SENATE CS FOR HOUSE BILL NO. 114(RES)                                                                                      
     "An Act relating to the taking of antlerless moose."                                                                       
                                                                                                                                
EDDIE   GRASSER,   Staff,  Representative   Beverly   Masek,                                                                    
explained  that the  changes made  in  the Senate  Resources                                                                    
Committee  made  sure  that  the  Advisory  Committee  would                                                                    
continue to have  a role in the process.   The bill puts the                                                                    
anterless regulations  on the same two-year  cycle the Board                                                                    
now uses,  saving the  State time and  money.   He mentioned                                                                    
that HB  114 would benefit the  State and the Board  of Game                                                                    
by  streamlining  the   regulatory  process  providing  cost                                                                    
savings to the State in time and money.                                                                                         
                                                                                                                                
Senator  Green MOVED  to  report  SCS HB  114  (RES) out  of                                                                    
Committee  with  individual  recommendations  and  with  the                                                                    
accompanying  fiscal notes.   There  being NO  OBJECTION, it                                                                    
was so ordered.                                                                                                                 
                                                                                                                                
SCS HB  114 (RES) was reported  out of Committee with  a "do                                                                    
pass"   recommendation  and   with  tow   fiscal  notes   by                                                                    
Department of Fish and Game.                                                                                                    
     CS FOR HOUSE BILL NO. 204(RES)                                                                                             
     "An Act relating to elk farming."                                                                                          
                                                                                                                                
PETER FELLMAN, Staff,  Representative John Harris, clarified                                                                    
that the  legislation was an  attempt to move  the oversight                                                                    
of elk  farming out of  the Department  of Fish and  Game to                                                                    
the   Division  of   Agriculture,   Department  of   Natural                                                                    
Resources.   Currently, the regulations  of domestic  elk do                                                                    
not have statutory  authority in the Department  of Fish and                                                                    
Game.  The  Division of Agriculture are the  experts at such                                                                    
concerns.                                                                                                                       
                                                                                                                                
BILL WARD,  (Testified via Teleconference),  Delta Junction,                                                                    
urged  Committee  members to  support  the  legislation.   A                                                                    
licensing fee  would be paid  every two years in  the amount                                                                    
of  $250  dollars.   The  fee  would  be  used so  that  the                                                                    
Division  of  Agriculture  could   send  staff  to  maintain                                                                    
fencing for elk farms.                                                                                                          
                                                                                                                                
Senator Donley  referenced to  Section 3.   He asked  if the                                                                    
permit would be a particular "brand".                                                                                           
                                                                                                                                
Mr.  Fellman replied  that there  is a  brand permit  in the                                                                    
State of  Alaska.  That  brand must be registered  before it                                                                    
can be used.                                                                                                                    
                                                                                                                                
Senator Green MOVED  to report HB 204 out  of Committee with                                                                    
individual recommendations and  with the accompanying fiscal                                                                    
notes.  There being NO OBJECTION, it was so ordered.                                                                            
                                                                                                                                
HB 204 was reported out of Committee with a "do pass"                                                                           
recommendation and with fiscal notes by Department of                                                                           
Natural Resources and Department of Fish and Game.                                                                              
     CS FOR HOUSE BILL NO. 290(RES)                                                                                             
     "An Act  relating to pipeline  carriers of  natural gas                                                                    
     produced  from the  North Slope  of Alaska  and to  the                                                                    
     intrastate regulation  by the Regulatory  Commission of                                                                    
     Alaska  of pipelines  and pipeline  facilities of  that                                                                    
     natural gas."                                                                                                              
                                                                                                                                
LORALI   MEIER,   Staff,   Representative   Beverly   Masek,                                                                    
testified that the  purpose of HB 290 is to  make changes to                                                                    
existing statute,  which are needed  to get the  gas product                                                                    
to the  regulatory market. Before  any natural  gas pipeline                                                                    
can  succeed,  certain  amendments   to  the  current  State                                                                    
statute are necessary.                                                                                                          
                                                                                                                                
HB 290 would amend the Pipeline  Act to define a North Slope                                                                    
natural gas  pipeline, clarify the Regulatory  Commission of                                                                    
Alaska's  (RCS's)  authority  in regulating  a  North  Slope                                                                    
natural  gas   pipeline  extends  only  to   the  intrastate                                                                    
transportation of gas through such  a system, define a fair,                                                                    
predictable  and timely  process  to  identify and  dedicate                                                                    
sufficient  initial intrastate  capacity  in  a North  Slope                                                                    
natural  gas  pipeline and  to  establish  the criteria  for                                                                    
needed pipeline system  expansions over the life  of a North                                                                    
Slope natural  gas pipeline system to  accommodate increased                                                                    
demand for in-state gas supplies.                                                                                               
                                                                                                                                
                                                                                                                                
Tape: SFC - 00 #92, Side B    4:08 PM                                                                                           
                                                                                                                                
                                                                                                                                
Senator  Adams  MOVED to  report  CS  HB  290 (FIN)  out  of                                                                    
Committee  with  individual  recommendations  and  with  the                                                                    
accompanying  fiscal notes.   There  being NO  OBJECTION, it                                                                    
was so ordered.                                                                                                                 
                                                                                                                                
CS HB 290 (FIN) was reported out of Committee with a "do                                                                        
pass" recommendation and with fiscal notes by Department of                                                                     
Revenue, Department of Natural Resources, and Department of                                                                     
Community & Economic Development.                                                                                               
     CS FOR HOUSE BILL NO. 378(RLS)                                                                                             
     "An Act relating to the establishment of, assessment                                                                       
     of, collection of, and accounting for service fees for                                                                     
     state  administration  of   workers'  compensation  and                                                                    
     workers' safety programs;  establishing civil penalties                                                                    
     and  sanctions for  late payment  or nonpayment  of the                                                                    
    service fee; and providing for an effective date."                                                                          
                                                                                                                                
PAUL  GROSSI, Director,  Division of  Workers' Compensation,                                                                    
Department  of Labor  and  Workforce Development,  clarified                                                                    
that the  bill was  designed to  replace general  funds that                                                                    
the  Division of  Workers'  Compensation  and worker  safety                                                                    
programs  within the  Department have  lost. The  bill would                                                                    
create  a dependable  funding source  paid equitably  by all                                                                    
employers using the system.   He reiterated that the purpose                                                                    
would  be  to  provide  a  stable  funding  source  to  that                                                                    
Division.                                                                                                                       
                                                                                                                                
Mr.  Grossi  continued,  the current  system  provides  that                                                                    
employers that purchase  workers' compensation insurance pay                                                                    
a tax or can become  self-insured.  The proposed legislation                                                                    
addresses  that  inequity.   The  new  fee system  would  be                                                                    
designed to  raise the same  amount of money as  the current                                                                    
tax.  Because  the new system would spread  costs among more                                                                    
employers, those employers currently  paying the premium tax                                                                    
would realize  a decrease in  their payments.   He concluded                                                                    
that the bill would offer  a fair, effective way of ensuring                                                                    
continued funding for vital worker protection programs.                                                                         
                                                                                                                                
Co-Chair Torgerson  noted that the  bill would not  be moved                                                                    
from Committee  at this time,  however, all  testimony would                                                                    
be taken.                                                                                                                       
                                                                                                                                
ROBERT LOHR, Director, Division  of Insurance, Department of                                                                    
Community & Economic Development,  advised that the Division                                                                    
of  Insurance  recommends  two technical  amendments.    The                                                                    
first change would revise the  language so that the Division                                                                    
of  Insurance would  deposit a  portion of  the premium  tax                                                                    
collected  as  opposed  to   the  premium  income  reported.                                                                    
Otherwise, deposits  may be required  that would  be greater                                                                    
than the amounts collected.                                                                                                     
                                                                                                                                
Mr. Lohr  continued, the  bill does  not contain  the phrase                                                                    
"in lieu of all taxes…" as  found on Page 2, Lines 25-28, of                                                                    
the  previous version.   He  recommended that  the provision                                                                    
amending  AS  21.09.270  be  removed.     The  change  would                                                                    
maintain  the long-standing  statutory status  quo regarding                                                                    
retaliatory  fees.   That  would  keep Alaska's  retaliatory                                                                    
calculation in  line with other  states and would  promote a                                                                    
level playing  field between companies  from this  state and                                                                    
other states.                                                                                                                   
                                                                                                                                
Senator  Phillips  asked  how it  would  differ  from  other                                                                    
states.                                                                                                                         
                                                                                                                                
Mr.  Grossi replied  that Alaska  is one  of the  six states                                                                    
that actually  funds the program  through the  general fund.                                                                    
The  remaining  states have  some  sort  of "special"  fund.                                                                    
Sixteen states have a fee-funding source.                                                                                       
                                                                                                                                
Senator Green asked if the  excess money would be paying for                                                                    
the Occupational Safety and Health Administration (OSHA).                                                                       
                                                                                                                                
Mr. Grossi replied that it would  be used to fund the safety                                                                    
programs and OSHA.                                                                                                              
                                                                                                                                
Senator  Green  pointed out  that  the  legislation was  not                                                                    
necessarily  intended   to  be  used  to   improve  workers'                                                                    
compensation but rather for funding OSHA.                                                                                       
                                                                                                                                
Senator  Leman  commented  that the  money  would  still  be                                                                    
available for appropriation.                                                                                                    
                                                                                                                                
Co-Chair Torgerson  agreed that  the Legislature  would have                                                                    
the  authority  to decide  on  how  those funds  were  being                                                                    
spent.  He  reiterated that those funds would  be subject to                                                                    
appropriation.                                                                                                                  
                                                                                                                                
Co-Chair  Torgerson  noted that  HB  378  would be  HELD  in                                                                    
Committee for further consideration.                                                                                            
ADJOURNED                                                                                                                   
                                                                                                                                
Senator Torgerson adjourned the meeting at 3:50 AM.                                                                             

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