Legislature(2003 - 2004)
05/16/2003 02:37 PM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
May 16, 2003
2:37 PM
TAPES
SFC-03 # 101, Side A
CALL TO ORDER
Co-Chair Lyda Green convened the meeting at approximately 2:37 PM.
PRESENT
Senator Lyda Green, Co-Chair
Senator Con Bunde, Vice Chair
Senator Robin Taylor
Senator Ben Stevens
Senator Donny Olson
Also Attending: SENATOR GARY STEVENS; GREG O'CLARY, Commissioner,
Department of Labor and Workforce Development; BARBARA BITNEY,
Staff to Representative Bill Stoltze; TOM WRIGHT, Staff to
Representative John Harris; LANDA BAILY, Legislative Liaison and
Special Assistant, Office of the Commissioner, Department of
Revenue; DAN SPENCER, Director, Division of Administrative
Services, Department of Administration
Attending via Teleconference: From Offnet Sites: RIVER BEAN; LARRY
BEVILBISS; MARK REMPEL, Organic Farmer; From Mat-Su: ERIC YOULD,
Executive Director, ARECA; From Anchorage: CRAIG TILLERY, Assistant
Attorney General, Environmental Section, Civil Division
(Anchorage), Department of Law; MARK DAVIS, Director, Division of
Banking, Securities & Corporations, Department of Community and
Economic Development
SUMMARY INFORMATION
HB 155-PUBLIC CONSTRUCTION PROJECT REQUIREMENTS
The Committee heard from the Department of Labor and Workforce
Development and reported the bill from Committee.
HB 104-PAYMENT OF FISHERY BUSINESS TAX
The Committee heard from the sponsor and reported the bill from
Committee.
HB 226-ORGANIC FOOD
The Committee heard from the sponsor, took public testimony, and
reported the bill from Committee.
HCR 21-ALASKA ENERGY POLICY TASK FORCE
The Committee heard testimony from the sponsor, took public
testimony, considered and adopted one amendment, and reported the
bill from Committee.
HB 248-SALARY OF CHIEF PROCUREMENT OFFICER
The Committee heard from the Department of Administration and held
the bill in Committee.
SB 211-REGULATIONS: NOTICE AND DISTRIBUTION
The Committee took testimony from the Department of Law and the
Department of Community and Economic Development. The bill was held
in Committee.
CS FOR HOUSE BILL NO. 155(FIN)
"An Act relating to the submission of payroll information by
contractors and subcontractors performing work on a public
construction contract; requiring a notice of work by employers
on public construction contracts; providing for the
withholding of final payment for public construction
contracts; and providing for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
Senator Taylor moved to report the bill from Committee and objected
to the motion for purpose of discussion.
GREG O'CLARY, Commissioner, Department of Labor and Workforce
Development informed that this is revenue-generating legislation,
as it would require a prevailing wage rate-filing fee to be paid to
the State by the construction industry when they are involved in a
public construction project. He explained that the revenue
generated from this fee would replace Department demands on the
general fund, which, he asserted, would enhance the Department's
efforts to support the Administration's goal of reducing the
State's budget to lessen the need for Constitutional Budget Reserve
(CBR) fund draws. He referred the Committee to the accompanying
Department fiscal note that reflects a positive $2.5 million in
revenue. He noted the Department's request to add an accounting
clerk position to handle these filings, and he furthered that the
legislation would permit the industry to file wage information on a
bi-weekly basis rather than the weekly basis as currently required.
Additionally, he noted, an online payroll filing system would be
implemented to lessen filing requirement demands on the industry.
Co-Chair Green stated that originally there was opposition to this
legislation.
Mr. O'Clary clarified that the current version of the bill has no
opposition.
Senator Taylor removed his objection to the motion.
There being no further objection, CS HB 155(FIN) was REPORTED from
Committee with previous fiscal note #2 from the Department of Labor
and Workforce Development.
CS FOR HOUSE BILL NO. 104(FSH)
"An Act relating to payment of the fisheries business tax and
to security for collection of the fisheries business tax."
This was the first hearing for this bill in the Senate Finance
Committee.
Senator Taylor moved to report the bill from Committee with
"personal" recommendations and accompanying fiscal note, then he
objected to the motion in order to hear testimony from the bill's
sponsor.
SENATOR GARY STEVENS, the bill's sponsor, informed the Committee
that the Governor's Fisheries Task Force was formed to address the
"in crisis" fishing industry. He continued that this bill was
crafted by the Fisheries Task Force to assist the fishing industry
by allowing small processors to defer payment of the Fisheries
Business Tax to April first and make monthly payments rather than
st
one lump sum payment on or before March 31 of the year following
the tax year.
Senator Bunde mentioned that, as reflected in the fiscal note, the
monthly payment process would require an increase in accounting
personnel; however, he noted that the receipt of these payments
would "counterbalance" the fiscal note as it would allow the State
to access funds earlier than the current process.
Senator G. Stevens agreed the funds would be available for the
State to invest. He reminded the Committee that this legislation
would affect approximately one dozen small processors, and
therefore, he asserted, the program would be "fairly easy" to
administer.
Senator B. Stevens voiced support for this legislation as it would
assist small processors "with their cash management" by removing
"the burden of putting up a big bond at the beginning of the
season." He noted that this program "is only available to those
that are current on all tax obligations;" however, he stated that
it would continue the requirement of a bond or property as
collateral while allowing the processor to make monthly payments.
Co-Chair Green asked whether the Department of Revenue could absorb
the $14,000 fiscal note.
Senator G. Stevens responded that the Department has determined
this to be the cost of the program.
Senator Taylor withdrew his objection to the motion.
There being no further objection, CS HB 104(FSH) was REPORTED from
Committee with previous fiscal note #2 from the Department of
Revenue.
HOUSE BILL NO. 226
"An Act relating to the sale, offer for sale, representation,
and labeling of food or other agricultural products as
organic, and to the state organic certification program; and
providing for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
BARBARA BITNEY, Staff to Representative Bill Stoltze, the bill's
sponsor, informed the Committee that this legislation is presented
to "simply adopt the federal standard of organic" and allow the
State to implement a certification program to enable the State's
agricultural districts to certify Alaskan produce. She informed
that, absent an Alaska certified organic program, Alaskan growers
must pay to have their crops certified as organic, at tremendous
expense, by the states of Oregon or Washington. She noted that
program receipts would support the $37,000 fiscal note.
Senator Taylor voiced "strong support" for the legislation.
RIVER BEAN testified via teleconference from an offnet site and
urged the Committee to support this legislation, as it would allow
his company's produce to be labeled and certified within the State.
LARRY BEVILBISS testified via teleconference from an offnet site in
support of the bill. He commented that the industry and the
Department have worked diligently to keep the expense of the
organic certification program to a minimum, and he apologized for
there being a fiscal note.
MARK REMPEL, Organic Farmer, testified via teleconference from an
offnet site, in support of the bill as it encourages the "organic
niche market" to continue to expand.
Senator Taylor moved to report the bill from Committee with
individual recommendations and accompanying fiscal note.
Senator Bunde asked whether avenues, such as a corporate income
tax, might allow the State to recoup the cost of implementing this
program.
Mr. Bevilbiss responded that while agricultural businesses do not
pay a corporate business tax to the State, they are required to
have an Alaska business license and must purchase the Alaskan Grown
organic certification label.
Ms. Bitney affirmed that businesses would be charged a
certification fee as well as a fee for use of the Alaskan Grown
certification label.
Senator Taylor voiced that these fees and the growth of the organic
agriculture industry would benefit the State.
There being no objection, HB 226 was REPORTED from Committee with
previous fiscal note #2 from the Department of Natural Resources.
CS FOR HOUSE CONCURRENT RESOLUTION NO. 21(FIN)
Relating to establishing the Alaska Energy Policy Task Force.
This was the first hearing for this bill in the Senate Finance
Committee.
TOM WRIGHT, Staff to Representative John Harris, the bill's
sponsor, informed the Committee that this bill would establish a
nine-member energy policy task force to develop long-term energy
plans for the State. He continued that the nine member task force
would be comprised of one member from the Alaska Energy Authority
Board of Directors, the Commissioner of the Department of Revenue,
two persons chosen by the Governor, two persons chosen by the
Speaker of the House of Representatives, and three persons chosen
by the Senate President, one of whom would be appointed from a list
provided to the Senate President by the House and Senate Minority.
Additionally, he noted that task force members would select the
task force's chairperson.
Mr. Wright explained that the task force would be charged with
developing two long-term energy plans: one specifically for the
Railbelt area of the State and the other being a statewide energy
plan. Reports for these plans, he continued, must be submitted to
the Legislature by December 31, 2003 and March 31, 2004,
respectfully.
Amendment #1: This amendment allows the Commissioner of the
Department of Revenue to select a designee to represent the
Commissioner on the task force.
Senator B. Stevens moved for the adoption of Amendment #1. He
explained that the numerous obligations of the Commissioner of the
Department of Revenue might prevent regular attendance at task
force meetings; therefore, he continued, this amendment would allow
the Commissioner to appoint a representative "if and when"
necessary.
LANDA BAILY, Legislative Liaison and Special Assistant, Office of
the Commissioner, Department of Revenue affirmed that, while the
Commissioner wishes to serve on this board, his current obligations
to the Board of Trustees of the Alaska Permanent Fund, the Alaska
Pension Investment Board, the Alaska Energy Authority, and numerous
other boards and commissions might prohibit regular attendance. She
assured that the Department supports this amendment.
ERIC YOULD, Executive Director, ARECA, testified via teleconference
from Mat-Su that ARECA, the trade association for the electric
utility industry in the State and whose membership generates
approximately 90 percent of the electricity in the State, supports
the merit of this legislation. He commented that the potential for
large electric energy field projects exist; however, he noted, that
the development of these projects exceeds the abilities of the
various individual electric entities. He asserted that the
development of these projects would benefit the overall
infrastructure of the State and stimulate the economy. He stated
that this resolution is strongly supported, as it would provide a
means to further these potential projects.
Co-Chair Green asked for examples of these projects.
Mr. Yould responded that a strong power intertie project from
Fairbanks to Kenai or a transmission line from Nenana to the Donlin
Creek Gold Mine and continuing to Bethel and the Illiamna area are
being discussed. He listed another potential project as a
transmission line from Delta to Tok to Glenallen to Palmer, which
might eventually integrate with transmission lines from Valdez. He
expressed that, were the natural gas pipeline to come to fruition
and terminate in Valdez, the process of liquefying the natural gas
for export purposes would generate sufficient waste heat to
generate power that would otherwise be stranded. He continued that
other projects could include a Southeast intertie system.
Additionally, he noted that the task force could address
alternative energy projects as well.
Co-Chair Green asked whether these alternative energy projects are
ongoing or in the experimental stage of development.
Mr. Yould responded that these alternate energy projects are both
ongoing and experimental. He informed that these projects might
include such things as the wind projects that are currently being
researched in the Fairbanks area or tapping the tremendous
hydropower potential in the State. He noted that small projects
could involve fuel cell research as well as a large coal-fired
generation plant project being considered in the Healy area.
Co-Chair Green asked whether the coal-fired generation plant is
separate from the current Healy clean-coal plant project.
Mr. Yould responded yes. He noted that the power utilities
anticipate a resolution to the Healy clean-coal project that would
enable it to come online and feed into the power system in the
near-term. He continued that the coal-fired generation plant is a
separate project, and because it is in a conceptual stage, it might
be ten years before it becomes a reality.
Co-Chair Green ordered the bill SET ASIDE.
[Note: HCR 21 is readdressed later in the meeting.]
HOUSE BILL NO. 248
"An Act relating to the annual salary of the chief procurement
officer; and providing for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
DAN SPENCER, Director, Division of Administrative Services,
Department of Administration, informed the Committee that this
legislation would change the salary range for the Department's
Chief Procurement Officer (CPO) from its current statutory Range 23
to a Range 24. He stated that the CPO has assumed duties formerly
conducted by the Director of the Division General Services, as, he
continued, the Director's position has been reclassified to a
Deputy Director. He noted that the Deputy Director, along with the
Department's leasing manager and contracting officer, would report
to the CPO. These changes, he continued, would generate "a slight
cost saving" for the Division.
Co-Chair Green ordered the bill HELD in Committee.
SENATE BILL NO. 211
"An Act relating to the publishing and furnishing of certain
public notices regarding regulations or rules of certain state
agencies; relating to distribution of the Alaska
Administrative Code, Alaska Administrative Register, and
supplements to the code or register; and providing for an
effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
CRAIG TILLERY, Assistant Attorney General, Environmental Section,
Civil Division (Anchorage), Department of Law, testified via
teleconference from Anchorage and informed the Committee that the
intent of this legislation is to improve the public notice process
pertaining to State regulatory change notices and to reduce costs
to the State through the elimination of unnecessary action, the use
of the Internet where appropriate, and the allowance "for briefer,
more easily understood notices" by changing Sections 23 and 24 of
the Alaska Administrative Procedures Act. He explained that the
briefer notices, while containing pertinent information such as
what regulation is being changed and how to obtain more information
regarding the change is anticipated to reduce the advertising
content by approximately 75 percent. He asserted that these changes
would make the advertisement more noticeable and more easily
understood, and that directing people to a phone number or Internet
site would enable people to acquire more detailed information than
is currently required by statute. He stressed that this legislation
would not prohibit a State agency from advertising a more detailed
notice were a situation to require it.
Mr. Tillery mentioned that this concept has been considered for
numerous years and that approximately six years prior, similar
legislation had been introduced. He informed that the continuing
growth and availability of the Internet has allowed this
legislation to become appropriate.
Mr. Tillery continued that, "while limited in scope, but a
significant departure from what is currently in statute" is
language that would allow some agencies to not advertise certain
notices in newspapers as, he shared that upon review, certain
notices have been determined to be of disinterest to the general
public but are rather of a technical nature and of more interest to
individuals who have easy access to the Internet and typically
receive their notices in that manner or through trade associations
or mailing lists. He noted that the identified regulations are
identified in Sections 1, 2, 10, 11, 12,13,16,19,20,26, and 27.
Mr. Tillery noted that, thirdly, the bill would allow agencies to
advertise notices in one newspaper rather than three as currently
required or via the Internet or through mailings. Lastly, he
stated, the legislation would eliminate the requirement for the
State to provide copies and updates of the Alaska Administrative
Code to all municipalities or local governments. He stated that
many local governments have indicated that these copies are not
necessary and that access to the information via the Internet would
be adequate.
Co-Chair Green surmised the purpose of the legislation is to
streamline the State's noticing system to align with today's
communication environment.
Mr. Tillery agreed.
MARK DAVIS, Director, Division of Banking, Securities &
Corporations, Department of Community and Economic Development,
testified via teleconference from Anchorage and stated that this
bill would allow proposed changes in regulations for banking,
corporations, and securities to be noticed in a simplified format
in a newspaper and/or by electronic means. He continued that this
would allow cost savings in addition to an improved method of
notice to interested parties, as; he opined those individuals are
Internet users and are familiar with electronic communication. He
stated that proxy programs issued through the Division would be
addressed by language allowing the Division to use whatever method
it deems necessary or reasonable.
Senator Taylor commented that fiscal note #2 from the Office of
Management and Budget indicates that the Department of Community
and Economic Development would save approximately $258,000 by the
implementation of this legislation as the result of newspaper
advertising savings. He voiced appreciation for the efforts put
forth on this legislation and noted the lack of opposition to the
legislation from the newspaper industry.
Co-chair Green mentioned that a similar bill is advancing in the
House of Representatives. She commented that newspapers are using
the Internet to advance their product, and she opined that perhaps
the newspaper industry is coming "to the realization that the
Internet is the thing of today."
Senator Olson voiced concern that Internet access is limited in
rural Alaska and therefore, he inquired how the changes in
newspaper notices would affect the dissemination of information in
those areas.
Mr. Davis responded that typically those areas do not currently
receive these newspaper notices unless a change specifically
affects the area. He noted that the three newspapers that would be
affected by this legislation would be those serving Anchorage,
Fairbanks and Juneau, or occasionally the Alaska Journal of
Commerce. He reiterated that this legislation would not prevent
notices if deemed necessary in those areas, and that, while
Internet access might not be available in all communities; he noted
that not all communities receive a newspaper.
Senator Olson argued that newspapers are available in all
communities as they are received via the mail. However, he stated
that Internet access is only available at schools or clinics, which
are not places that someone would ordinarily go to read
regulations.
Co-Chair Green ordered the bill HELD in Committee.
CS FOR HOUSE CONCURRENT RESOLUTION NO. 21(FIN)
Relating to establishing the Alaska Energy Policy Task Force.
This bill was again before the Committee.
Senator Taylor moved to report the bill from Committee with
individual recommendations and attached fiscal note.
There being no objections, SCS CS HCR 21 (FIN) was REPORTED from
Committee with previous fiscal note #1 from the Legislative Affairs
Agency.
ADJOURNMENT
Co-Chair Lyda Green adjourned the meeting at 03:19 PM
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