Legislature(1999 - 2000)

04/19/2000 12:00 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                          MINUTES                                                                                             
                 SENATE FINANCE COMMITTEE                                                                                     
                      April 19, 2000                                                                                          
                          9:53 PM                                                                                             
                                                                                                                                
TAPES                                                                                                                       
                                                                                                                                
SFC-00 # 100, Side A and Side B                                                                                                 
                                                                                                                                
CALL TO ORDER                                                                                                               
                                                                                                                                
Co-Chair   John   Torgerson    convened   the   meeting   at                                                                    
approximately 9:53 PM                                                                                                           
                                                                                                                                
PRESENT  Co-Chair  John  Torgerson, Co-Chair  Sean  Parnell,                                                                
Senator Al  Adams, Senator Dave Donley,  Senator Lyda Green,                                                                    
Senator Randy Phillips, Senator Gary Wilken                                                                                     
                                                                                                                                
Also  Attending: REPRESENTATIVE  BILL  HUDSON; JOE  GELDHOF,                                                                  
Juneau  Attorney;  ROBERT  REGIUS, Cruise  Control;  MELINDA                                                                    
HOFSTAD,  staff  to  Representative  Hudson;  JOHN  BARNETT,                                                                    
Board of  Storage Tank Assistance; JOHNATHON  LACK, staff to                                                                    
Representative Andrew Halcro;  JOHN SEER, National Education                                                                    
Association (NEA)-Alaska;                                                                                                       
                                                                                                                                
Attending  via Teleconference:  From Homer:  JOE MCCULLOUGH;                                                                  
ALAN  PARKS,  Commercial  Fisher;  NOELLE  MCCULLOUGH;  MAKO                                                                    
HAGGERTY,  Chair,   Katchemak  Bay  State   Parks  Citizen's                                                                    
Advisory Board;  CRAIG FOREST,  USCG Auxiliary  and lifelong                                                                    
Alaskan;  From Fairbanks:  MARIE SCHOLLE,  Chair, Governor's                                                                    
Advisory   Council  on   Safety,  Representative,   American                                                                    
Society of  Safety Engineers; From Anchorage:  MIKE FOLKERT,                                                                    
Chair,  Alaska   Boating  Safety  Advisory   Council;  CATHY                                                                    
GILLESPIE,  Anchorage  School  Board;  GUY  BELL,  Director,                                                                    
Division   of  Retirement   and   Benefits,  Department   of                                                                    
Administration                                                                                                                  
                                                                                                                                
SUMMARY INFORMATION                                                                                                         
                                                                                                                                
SB 308-MARINE PASSENGER VESSELS                                                                                                 
                                                                                                                                
The Committee  heard testimony  from an  attorney contracted                                                                    
by the legislature  to advise on this  matter. The Committee                                                                    
also  heard  testimony  from a  non-profit  organization.  A                                                                    
committee  substitute  was  adopted,  four  amendments  were                                                                    
considered  and  three were  adopted.  The  bill moved  from                                                                    
Committee.                                                                                                                      
                                                                                                                               
HB 108-USE, REGULATION, AND OPERATION OF BOATS                                                                                  
                                                                                                                                
The Committee  heard testimony from the  sponsor and members                                                                    
of the public. An amendment  was considered and adopted. The                                                                    
bill moved from Committee.                                                                                                      
                                                                                                                                
HB 432-BOARD OF STORAGE TANK ASSISTANCE                                                                                         
                                                                                                                                
The  Committee   heard  from  the  Board   of  Storage  Tank                                                                    
Assistance. The bill was held in Committee.                                                                                     
                                                                                                                                
HB 277-RETIREMENT BENEFITS FOR REHIRED TEACHERS                                                                                 
                                                                                                                                
The  Committee   heard  testimony  from  the   sponsor,  the                                                                    
Division  of Retirement  and Benefits,  representatives from                                                                    
the teaching profession and the  Anchorage School Board. The                                                                    
bill was held in Committee.                                                                                                     
                                                                                                                                
     SENATE BILL NO. 308                                                                                                        
     "An Act relating to certain passenger vessels                                                                              
     operating in the marine waters of the state."                                                                              
                                                                                                                                
                                                                                                                                
This  was the  first hearing  for  this bill  in the  Senate                                                                    
Finance Committee.                                                                                                              
                                                                                                                                
Co-Chair Parnell moved  to adopt CS SB 308,  1-LS1617\D as a                                                                    
workdraft.  There   was  no  objection  and   the  committee                                                                    
substitute was ADOPTED.                                                                                                         
                                                                                                                                
JOE GELDHOF,  Juneau Attorney,  retained by  the legislature                                                                    
to advise on constitutional issues  relating to a tax on the                                                                    
cruise ship industry, explained the committee substitute.                                                                       
                                                                                                                                
Mr. Geldhof told  the Committee a proposed  tax is contained                                                                    
in Section 1  of the committee substitute. He  said this tax                                                                    
is  simple and  strait  forward on  passengers  who come  to                                                                    
Alaska in commercial cruise ships.                                                                                              
                                                                                                                                
Mr. Geldhof noted there are  some legal concerns, such as an                                                                    
equal protection  issue related to an  exemption for vessels                                                                    
that  have less  than 50  berths. However,  in his  opinion,                                                                    
there is  no problem with  equal protection. He  stated this                                                                    
is  because the  legislature has  discretion to  set certain                                                                    
standards  and  that  this exemption  is  well  within  that                                                                   
constitutional authority.                                                                                                       
                                                                                                                                
Mr. Geldhof explained the liability  for payment of this tax                                                                    
falls  on  the  vessels   that  are  engaged  in  commercial                                                                    
activities  within   Alaskan  waters.  In  that   sense,  he                                                                    
surmised this is a self-executing  tax the operators collect                                                                    
on behalf or  from the passengers and pay  to the Department                                                                    
of Revenue.                                                                                                                     
                                                                                                                                
Mr. Geldhof  pointed out that  this legislation  avoids some                                                                    
of the  difficulties under the  "nearly archaic  and perhaps                                                                    
almost dead"  tonnage clause in  the US  Constitution, since                                                                    
the tax  is not  related to  the length or  the weight  of a                                                                    
vessel.  He explained  that under  the clause,  any revenues                                                                    
generated  under  a  tonnage  tax   must  be  used  to  fund                                                                    
services, such  as fireboats, that  are directly  related to                                                                    
the marine trade.                                                                                                               
                                                                                                                                
Mr.  Geldhof described  how revenues  generated  by the  tax                                                                    
proposed in  this bill would  be deposited into  the general                                                                    
fund  and  would  pre-empt municipalities  and  other  local                                                                    
governments from engaging in other  passenger head taxes. In                                                                    
this sense, he  said, the state tax  is rationalized because                                                                    
the  industry is  not  subject to  multiple  tax schemes  at                                                                    
different rates.                                                                                                                
                                                                                                                                
Mr.  Geldhof  continued that  this  bill  provides that  the                                                                    
Department  of Revenue  directs a  portion of  the collected                                                                    
taxes  to the  affected communities  where the  cruise ships                                                                    
visited.                                                                                                                        
                                                                                                                                
Co-Chair  Torgerson   clarified  that   of  the   total  tax                                                                    
collected for each passenger, $5  is given to the first five                                                                    
ports of call.                                                                                                                  
                                                                                                                                
Mr. Geldhof  affirmed and  emphasized that  this legislation                                                                    
also places a prohibition on local levies.                                                                                      
                                                                                                                                
Co-Chair Torgerson wanted to know  if the municipalities are                                                                    
also blocked from imposing a wharfing or docking fee.                                                                           
                                                                                                                                
Mr. Geldhof  answered the bill would  not restrict municipal                                                                    
fees for  those activities relating to  providing a service,                                                                    
such as delivering water.                                                                                                       
                                                                                                                                
Co-Chair Torgerson asked if  this legislation would prohibit                                                                   
a municipality from charging a disembarking tax.                                                                                
                                                                                                                                
Mr. Geldhof responded that there  are a variety of different                                                                    
ways to describe  this type of charge, such  as fees, taxes,                                                                    
embarkation,  disembarkation,  etc. but  that  "a  tax is  a                                                                    
tax." He stated that this  legislation creates the state tax                                                                    
and prohibits municipalities from  imposing a similar charge                                                                    
although  a portion  of the  revenues would  be shared  with                                                                    
those municipalities.                                                                                                           
                                                                                                                                
Mr.  Geldhof next  addressed the  definitions prescribed  in                                                                    
the bill.   He said the intent is to  enact this legislation                                                                    
directed at  the large cruise  ships that travel  in Alaska.                                                                    
He  noted that  the language  specifically exempts  dayboats                                                                    
and the small vessels that have 50 berths or less.                                                                              
                                                                                                                                
Mr. Geldhof shared  that an argument could be  made that the                                                                    
vessel  size stipulations  violate the  US Commerce  clause,                                                                    
but  countered that  no violation  is committed  so long  as                                                                    
favor is  not granted to  local commerce. He  commented that                                                                    
legislatures repeatedly  get into  trouble when they  try to                                                                    
favor local commerce over businesses from other states.                                                                         
                                                                                                                                
Co-Chair  Torgerson   said  the   remainder  of   the  bill,                                                                    
beginning  on page  three, addresses  environmental concerns                                                                    
and provide record keeping requirements and emissions.                                                                          
                                                                                                                                
Mr.   Geldhof  affirmed   but  stated   that   he  was   not                                                                    
knowledgeable on this portion of the bill.                                                                                      
                                                                                                                                
Senator  Phillips  asked how  much  revenue  this tax  would                                                                    
generate.                                                                                                                       
                                                                                                                                
Mr. Geldhof  responded that although  a fiscal note  had not                                                                    
yet  been  prepared,  he  knew  that  approximately  600,000                                                                    
passengers passed through Juneau,  which is the largest port                                                                    
of call in the state.                                                                                                           
                                                                                                                                
Senator Phillips  asked if $30  million was  the approximate                                                                    
amount that this tax would collect.                                                                                             
                                                                                                                                
Mr.  Geldhof replied  that amount  is  a useful  approximate                                                                    
figure.                                                                                                                         
                                                                                                                                
Co-Chair Torgerson clarified that  the legislation imposes a                                                                    
$50  fee per  passenger per  voyage. He  continued that  the                                                                    
first five  ports the  vessel visits  would receive  $5 each                                                                   
from the $50.                                                                                                                   
                                                                                                                                
Mr. Geldhof affirmed.                                                                                                           
                                                                                                                                
Co-Chair Torgerson  asked if some vessels  visited less than                                                                    
five ports would the tax remain $50.                                                                                            
                                                                                                                                
Mr.  Geldhof  said   the  tax  would  be   the  same  amount                                                                    
regardless  of  the  number  of stops  a  vessel  makes.  He                                                                    
explained this bill  puts an excise tax on  the commodity of                                                                    
Alaska. He stressed  that the cruise ship  is responsible to                                                                    
pay the  $50 tax  even if  the vessel  begins its  voyage in                                                                    
Canada, travels  directly to Glacier Bay  without making any                                                                    
ports of call. However, he  noted that no municipality would                                                                    
receive  a $5  portion of  that fee.  He explained  that the                                                                    
state is still "selling the water."                                                                                             
                                                                                                                                
Amendment #1: This amendment makes  the following changes to                                                                    
the committee substitute.                                                                                                       
                                                                                                                                
     Page 1, line 4                                                                                                             
     Insert new bill sections to read:                                                                                          
     Sec. 1. AS 43.20 is amended to read:                                                                                       
          Sec. 43.20.021. Internal Revenue Code adopted by                                                                      
     reference. (a) Sections  26 U.S.C. 1 - 1399  and 6001 -                                                                    
     7872 (Internal  Revenue Code)  as amended,  are adopted                                                                    
     by reference  as part of  this chapter.  These portions                                                                    
     of  the  Internal  Revenue Code  have  full  force  and                                                                    
     effect  under  this  chapter   unless  excepted  to  or                                                                    
     modified   by  other   provisions   of  this   chapter.                                                                    
     (However,  nothing  in  this chapter  or  in  AS  43.19                                                                    
     {multistate  tax  compact}  may   be  construed  as  an                                                                    
     exception to or modification of 26 U.S.C. 883.)                                                                            
          Sec. 43.20.074. All business income of a taxpayer                                                                     
     engaged  in  the  cruise  ship  industry  derived  from                                                                    
     gambling  operations  and   activities  as  allowed  by                                                                    
     federal law  in the State  Of Alaska shall be  taxed at                                                                    
     the rate  of 2% of  the gross revenues of  the gambling                                                                    
     operations and activities conducted in Alaska.                                                                             
                                                                                                                                
     Renumber following sections accordingly.                                                                                   
                                                                                                                                
Senator Adams moved for adoption.                                                                                               
                                                                                                                                
Co-Chair Torgerson objected.                                                                                                    
                                                                                                                                
Senator  Adams explained  this amendment  allows the  cruise                                                                   
ship industry  an opportunity  to provide  an "entertainment                                                                    
donation"  by imposing  a tax  on the  proceeds of  gambling                                                                    
operations conducted on  board ships. He spoke  to the well-                                                                    
defined restrictions  on gambling  in Alaska except  for the                                                                    
unknown  amount   of  gambling  done  aboard   cruise  ships                                                                    
traveling in state waters. He  told the Committee how the US                                                                    
Congress allowed  gambling in Alaska  waters at  the request                                                                    
of  the cruise  ship industry.  He was  concerned about  the                                                                    
federal government's  interjection on this matter  saying it                                                                    
raises  issues   about  state  sovereignty   since  congress                                                                    
authorized an activity  that the state does  not endorse. He                                                                    
thought it important that the  state extract a small portion                                                                    
of  the  wealth generated  by  gambling  within the  state's                                                                    
waters that otherwise goes to foreign-owned corporations.                                                                       
                                                                                                                                
Senator Adams  continued that funds collected  could be used                                                                    
for future cleanup  of oil spills or  other pollution damage                                                                    
or perhaps to fund ports  and harbor facilities. He reminded                                                                    
the  Committee that  this issue  was considered  in 1998  at                                                                    
which time it was estimated  this tax would generate between                                                                    
$3 to  $8.5 million. However,  he pointed out that  with the                                                                    
increase  in   cruise  ship  activity  the   minimum  amount                                                                    
collected would be $8.5 million.                                                                                                
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Phillips, Senator Leman, Senator Adams,                                                                       
                                                                                                                                
OPPOSED: Senator  Wilken, Senator  P. Kelly,  Senator Green,                                                                    
Co-Chair Parnell and Co-Chair Torgerson                                                                                         
                                                                                                                                
ABSENT: Senator Donley                                                                                                          
                                                                                                                                
The motion FAILED (3-5-1)                                                                                                       
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
Amendment  #2:  This  amendment changes  the  title  of  the                                                                    
committee  substitute  and  adds   a  new  bill  section  as                                                                    
follows.                                                                                                                        
                                                                                                                                
     Page 1, line 1                                                                                                             
     Delete:                                                                                                                    
     "An Act relating to certain passenger vessels                                                                              
     operating in the marine waters of the state."                                                                              
                                                                                                                                
     Insert:                                                                                                                   
     "An Act  relating to certain  vessels operating  in the                                                                    
     marine waters of the state."                                                                                               
                                                                                                                                
     Page 1, line 4                                                                                                             
     Insert a new bill section to read:                                                                                         
     Section 1. AS 46.03 is  amended by adding a new section                                                                    
     to read:                                                                                                                   
          Sec. 46.03.072. Exception for certain United                                                                          
     States  Navy vessels  from state  marine water  quality                                                                    
     standards applicable to  the discharge of hydrocarbons.                                                                    
     (a) Until  September 1, 2010 the  state's water quality                                                                    
     standards,  adopted as  regulations under  authority of                                                                    
     AS  46.03.020(10) to  effectuate the  purposes of  this                                                                    
     chapter and  under authority of other  sections of this                                                                    
     chapter,  establishing  limits  on  the  total  aqueous                                                                    
     hydrocarbons    and    total   aromatic    hydrocarbons                                                                    
     permissible in  the marine water  column that  are more                                                                    
     stringent  than the  requirements  of comparable  water                                                                    
     quality standards set out in  federal law or adopted in                                                                    
     federal  regulation do  not apply  to a  vessel of  the                                                                    
     United States  Navy operating in  the marine  waters of                                                                    
     the state  if the  vessel uses a  seawater compensation                                                                    
     system.                                                                                                                    
          (b) Notwithstanding the exemption provided by (a)                                                                     
     of this  section, a  vessel of  the United  States Navy                                                                    
     operating in the  marine waters of the  state that uses                                                                    
     a seawater  compensation system  may not  discharge oil                                                                    
     into state waters in violation  of 33 U.S.C. 1321 (sec.                                                                    
     311, Federal  Water Pollution Control Act,  as amended)                                                                    
     and  regulations   adopted  under  authority   of  that                                                                    
     section.                                                                                                                   
                                                                                                                                
Senator Leman moved for adoption.                                                                                               
                                                                                                                                
Co-Chair Torgerson objected for an explanation.                                                                                 
                                                                                                                                
Senator   Leman  explained   that   current  Department   of                                                                    
Environmental   Conservation    regulations   require   that                                                                    
discharged sea  water used by  marine vessels  for stability                                                                    
contain  less than  15 parts  per  billion hydrocarbons.  He                                                                    
stated that  this standard  is significantly  more stringent                                                                    
than federal law,  which dictate that no vessel  may leave a                                                                    
visible sheen.  He said  that in recent  years, the  US Navy                                                                    
has  curtailed operations  in Alaska  because of  the strict                                                                    
regulations. He  listed the three  classes of  Navel vessels                                                                    
equipped with seawater compensating  systems and saying that                                                                    
this amendment is an opportunity  to invite the Navy back to                                                                   
the state.                                                                                                                      
                                                                                                                                
In  response   to  the   department's  concerns   with  this                                                                    
amendment, Senator Leman said he  found part of the argument                                                                    
compelling.                                                                                                                     
                                                                                                                                
Senator Leman  moved to  amend the  amendment to  change the                                                                    
sunset date of the exemption  from "2010" to "2005". He said                                                                    
this  would   provide  ample  opportunity  to   conduct  the                                                                    
necessary  scientific  studies  to determine  if  a  further                                                                    
extension would be necessary.                                                                                                   
                                                                                                                                
Without objection the amendment was AMENDED.                                                                                    
                                                                                                                                
There  was  no  objection  and  the  amended  amendment  was                                                                    
ADOPTED.                                                                                                                        
                                                                                                                                
Amendment #3:  This amendment adds  a new subsection  to the                                                                    
committee substitute as follows.                                                                                                
                                                                                                                                
     Page 2, line 6                                                                                                             
     Insert:                                                                                                                    
               (a) The proceeds from the tax on travel on                                                                       
     commercial   passenger   vessels  providing   overnight                                                                    
     accommodations  in the  state's marine  water shall  be                                                                    
     deposited in a special  commercial vessel passenger tax                                                                    
     account  in  the  general  fund.  The  legislature  may                                                                    
     appropriate money  from this  account for  the purposes                                                                    
     described in  (b) of this  section and  for state-owned                                                                    
     port and harbor facilities.                                                                                                
               (b)                                                                                                              
                                                                                                                                
Senator Phillips  moved for adoption  and stated  this issue                                                                    
is  commonly  called "a  white  picket  fence approach."  He                                                                    
explained  it  isn't  exactly  a  dedicated  fund  but  does                                                                    
indicate  to  future  legislatures  that the  money  may  be                                                                    
appropriated  for  the  purposes of  state-owned  ports  and                                                                    
harbor  facilities. He  expressed  that because  the tax  is                                                                    
derived from  vessels, it  is appropriate  to use  the funds                                                                    
for facilities the vessels use.                                                                                                 
                                                                                                                                
Co-Chair  Parnell asked  if this  amendment applies  only to                                                                    
the portion of the head tax  retained by the state and if it                                                                    
in any way circumvents the local government's portion.                                                                          
                                                                                                                                
Senator  Phillips  surmised  that the  amendment  would  not                                                                   
utilize the  local portion  of the tax  because of  the word                                                                    
"may" in the language.                                                                                                          
                                                                                                                                
The amendment was ADOPTED without objection.                                                                                    
                                                                                                                                
Amendment #4: This amendment adds  an effective date of July                                                                    
1, 2000 to the legislation.                                                                                                     
                                                                                                                                
Co-Chair Parnell moved for adoption.                                                                                            
                                                                                                                                
Co-Chair Torgerson explained  this amendment establishes the                                                                    
effective date of the bill.                                                                                                     
                                                                                                                                
There was no objection and the amendment was ADOPTED.                                                                           
                                                                                                                                
ROBERT  REGIUS, Attorney,  spoke  in favor  of  the bill  on                                                                    
behalf of  the non-profit  organization, Cruise  Control. He                                                                    
told of  his 15  years practicing environmental  and natural                                                                    
resources law. He  stated that he is pleased  with Section 1                                                                    
and that  the state  is "stepping  up to  the plate"  to get                                                                    
fair  market value  for  Alaskans of  the  "experience of  a                                                                    
lifetime"  that is  sold  to the  hundreds  of thousands  of                                                                    
visitors.                                                                                                                       
                                                                                                                                
Mr.  Regius  next  addressed  Section  2  of  the  committee                                                                    
substitute emphasizing  it is intended  to ensure  that non-                                                                    
Alaskans  take  as  good  of  care of  the  state  as  local                                                                    
citizens  do. He  spoke of  the other  industries, including                                                                    
mining, oil  development, municipal water supply,  etc, that                                                                    
must provide information about the  wastes produced by their                                                                    
operations. He stressed  that this section of  the bill does                                                                    
not impose performance standards.                                                                                               
                                                                                                                                
Co-Chair Parnell offered a motion  to report from Committee,                                                                    
CS SB 308, 1-LS1617\D as amended.                                                                                               
                                                                                                                                
Senator Adams objected.  He stated that he did  not know the                                                                    
impact this legislation  would have on tourism,  and that no                                                                    
fiscal  note was  presented  to show  the  revenues the  tax                                                                    
would generate.                                                                                                                 
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Green, Senator Phillips, Senator Leman,                                                                       
Senator Wilken, Co-Chair Parnell and Co-Chair Torgerson                                                                         
                                                                                                                                
OPPOSED: Senator Adams, Senator P. Kelly and Senator Donley                                                                    
                                                                                                                                
The motion PASSED (6-3)                                                                                                         
                                                                                                                                
The bill MOVED from Committee.                                                                                                  
                                                                                                                                
Senator Phillips  asked if a  fiscal note would  be prepared                                                                    
for this bill.                                                                                                                  
                                                                                                                                
Co-Chair  Torgerson   answered  a   fiscal  note   would  be                                                                    
available before the Senate body hears the bill.                                                                                
                                                                                                                                
AT EASE 10:21 PM / 10:22 PM                                                                                                     
                                                                                                                                
     SENATE COMMITTEE SUBSTITUTE FOR COMMITTEE SUBSTITUTE                                                                       
     FOR HOUSE BILL NO. 108(RES)                                                                                                
     "An Act relating to the use, operation, and regulation                                                                     
     of boats; establishing a uniform state waterway                                                                            
     marking system; and providing for an effective date."                                                                      
                                                                                                                                
                                                                                                                                
This  was the  first hearing  for  this bill  in the  Senate                                                                    
Finance Committee.                                                                                                              
                                                                                                                                
REPRESENTATIVE BILL  HUDSON, sponsor of the  bill, testified                                                                    
that  this  bill  establishes a  comprehensive  recreational                                                                    
boating safety program. He stressed  that Alaska is the only                                                                    
state that does not have such  a program. He stated the bill                                                                    
transfers  vessel  registration  from  the  US  Coast  Guard                                                                    
(USCG) to  the Division  of Motor  Vehicles (DMV)  and would                                                                    
allow  people to  register  their boat  at  any DMV  office,                                                                    
through the  Internet, by mail  or through the  dealer where                                                                    
they purchase the vessel.                                                                                                       
                                                                                                                                
Representative   Hudson   continued  that   the   regulatory                                                                    
authority  for boat  safety equipment  required by  federal,                                                                    
and  in some  cases,  state statutes,  would be  transferred                                                                    
from  the USCG  to the  State Of  Alaska. He  said the  bill                                                                    
specifies the required safety equipment  for boats by class,                                                                    
including fire extinguishers  for powered boats, ventilation                                                                    
for  those boats  with enclosed  engines,  lights for  night                                                                    
cruising,  a sound  producing  device,  and most  important,                                                                    
life preservers  for each person  aboard. He added  that the                                                                    
bill stipulates that  life preservers must be  worn by every                                                                    
child age 13 and under on an open boat.                                                                                         
                                                                                                                                
Representative  Hudson stated  that this  bill combines  the                                                                   
lifesaving forces  of the USCG  with new life  saving forces                                                                    
of  the state.  He added  that  the bill  would expand  boat                                                                    
safety  education  into  the   schools,  on  the  docks  and                                                                    
continue the work  of the Coast Guard  auxiliary. He assured                                                                    
that  the work  of the  USCG would  not diminish,  but would                                                                    
allow a safety program to be implemented.                                                                                       
                                                                                                                                
Representative  Hudson  stressed  that no  new  state  funds                                                                    
would be  required for this legislation  noting that federal                                                                    
funds and registration  fees collected by the  DMV would pay                                                                    
the program.                                                                                                                    
                                                                                                                                
Representative   Hudson   shared  that   the   approximately                                                                    
$600,000 of  federal marine fuel  taxes Alaskans  pay, leave                                                                    
the  state and  goes to  other  states that  already have  a                                                                    
boating  safety education  program. Under  this legislation,                                                                    
he asserted  this money would  stay in the state  and become                                                                    
the  education fund  that  would be  used  to purchase  life                                                                    
jackets and to provide boater safety education.                                                                                 
                                                                                                                                
Representative Hudson  reiterated that the emphasis  of this                                                                    
bill is  education by Alaskans in  area-appropriate manners.                                                                    
He gave the  Kids Don't Float, loaner  life jackets program,                                                                    
as an example of locally conducted programs.                                                                                    
                                                                                                                                
Representative  Hudson   told  the  Committee   that  Alaska                                                                    
suffers   ten  times   the   national   average  of   marine                                                                    
recreational deaths. In the previous  three years, he stated                                                                    
that  75  adults  and  children died  of  these  causes.  He                                                                    
attested that  most other states  that have  inducted boater                                                                    
safety programs have reduced  boater fatalities by one-half.                                                                    
He believed  that with  a longer  coastline, more  lakes and                                                                    
rivers  than  any  other  state,  Alaskans  should  want  to                                                                    
prepare its  children and citizens  with the  best knowledge                                                                    
and equipment to help save their lives.                                                                                         
                                                                                                                                
By  working  with  the   USCG,  Representative  Hudson  said                                                                    
volunteers  would conduct  courtesy vessel  examinations for                                                                    
new boat owners and also  halt reckless operations that pose                                                                    
a hazard to others.                                                                                                             
                                                                                                                                
Representative  Hudson  addressed  the  vessel  registration                                                                    
surmising that having  a uniform system would  aid in search                                                                    
and rescue  operations. He noted that  abandoned boats could                                                                    
be  traced back  to  its owners  and subsequent  information                                                                    
could be gathered  about the number and  abilities of anyone                                                                   
who had been aboard that vessel.                                                                                                
                                                                                                                                
Representative  Hudson shared  that he  spent many  years in                                                                    
the USCG performing search and rescue operations.                                                                               
                                                                                                                                
Representative Hudson  assured that  the intent of  the bill                                                                    
is not  to police boating  activities but to  rather educate                                                                    
boaters. He stated that 75  percent of the funds returned to                                                                    
the state from the USCG would be used for education.                                                                            
                                                                                                                                
JOE MCCULLOUGH  testified via  teleconference from  Homer in                                                                    
support of  the bill saying there  was no doubt in  his mind                                                                    
that  this bill  would  save lives  and  would facilitate  a                                                                    
smarter user group.                                                                                                             
                                                                                                                                
ALAN PARKS, Commercial  Fisher, testified via teleconference                                                                    
from  Homer about  how the  education he  received from  the                                                                    
Commercial  Fishing  Safety  Act  saved his  life  during  a                                                                    
boating accident.                                                                                                               
                                                                                                                                
NOELLE  MCCULLOUGH testified  via teleconference  from Homer                                                                    
saying that  the children  of the  state would  benefit from                                                                    
the kinds of water safety training this bill would provide.                                                                     
                                                                                                                                
MAKO HAGGERTY,  Chair, Katchemak  Bay State  Parks Citizen's                                                                    
Advisory  Board,  testified  via teleconference  from  Homer                                                                    
that the board passed a resolution supporting this bill.                                                                        
                                                                                                                                
CRAIG FOREST, lifelong  Alaskan testified via teleconference                                                                    
from Homer representing the USCG  Auxiliary and himself told                                                                    
about   his  own   and   his   family's  extensive   boating                                                                    
experiences.  He   said  the   bill  would   accomplish  two                                                                    
important things,  receiving funding for  education programs                                                                    
and instituting safety equipment and practices into law.                                                                        
                                                                                                                                
MARIE  SCHOLLE,   Chair,  Governor's  Advisory   Council  on                                                                    
Safety,   Representative,   American   Society   of   Safety                                                                    
Engineers,  and  32-year   Alaska  resident,  testified  via                                                                    
teleconference from  Fairbanks in  support of the  bill. She                                                                    
emphasized that this bill would  provide the necessary funds                                                                    
to provide boater education to rural sites.                                                                                     
                                                                                                                                
MIKE FOLKERT, Chair, Alaska  Boating Safety Advisory Council                                                                    
testified via teleconference from  Anchorage in favor of the                                                                    
bill  and   about  the   lives  that   would  be   saved  by                                                                    
comprehensive boater safety education.                                                                                          
                                                                                                                               
Co-Chair    Torgerson    listed   others    available    via                                                                    
teleconference to answer questions.                                                                                             
                                                                                                                                
Amendment #1:  This amendment inserts  a new section  in the                                                                    
committee substitute as follows.                                                                                                
                                                                                                                                
     Page 7, following line 25                                                                                                  
     Insert:                                                                                                                    
          Sec. 05.25.052. Uniform state waterway marking                                                                        
     system.   The  department   shall  develop   and  adopt                                                                    
     regulations  establishing  a   uniform  state  waterway                                                                    
     marking   system  for   the  placement   of  regulatory                                                                    
     markers. The  regulations must  be compatible  with the                                                                    
     system of  aids to navigation prescribed  by the United                                                                    
     States Coast Guard.                                                                                                        
                                                                                                                                
This amendment  also makes  conforming changes  elsewhere in                                                                    
the committee substitute as appropriate.                                                                                        
                                                                                                                                
Co-Chair  Parnell  moved  for  adoption  and  explained  the                                                                    
Uniform  State  Waterways  Marking  System is  a  system  of                                                                    
marking  waterways with  navigation aids  and includes  such                                                                    
markers  as the  familiar red  and green  buoys. He  assured                                                                    
that  inclusion  of this  provision  in  the bill  does  not                                                                    
require  Alaska to  implement waterway  markers, but  rather                                                                    
indicates  that  if  the state  deems  navigational  markers                                                                    
necessary on a particular  waterway, the uniform systems can                                                                    
be  utilized.    He  noted  that the  chair  of  the  Senate                                                                    
Resources Committee  is in agreement  to this  amendment and                                                                    
that this provision was inadvertently  removed from the bill                                                                    
by the Senate Resources committee substitute.                                                                                   
                                                                                                                                
There was no objection and the amendment was ADOPTED.                                                                           
                                                                                                                                
Senator  Wilken asked  how the  requirement for  children to                                                                    
wear a  personal floatation device (PFD)  was established at                                                                    
age 13.                                                                                                                         
                                                                                                                                
Representative  Hudson replied  the  age is  set in  current                                                                    
state law.                                                                                                                      
                                                                                                                                
Senator Wilken  commented that  he thought  13 years  is too                                                                    
old to  require PFDs to  be worn. He verified  that changing                                                                    
this would not hamper federal funding.                                                                                          
                                                                                                                                
Senator Wilken asked if the  bill contains a requirement for                                                                   
boat owners to carry insurance.                                                                                                 
                                                                                                                                
Representative Hudson answered there is no such provision.                                                                      
                                                                                                                                
Senator  Wilken  next  asked if  the  Department  of  Public                                                                    
Safety is the only agency  that is authorized to enforce the                                                                    
laws proposed in bill.                                                                                                          
                                                                                                                                
                                                                                                                                
Tape: SFC - 00 #100, Side B    10:40 PM                                                                                         
                                                                                                                                
                                                                                                                                
Representative  Hudson  responded  that  the  Department  of                                                                    
Public  Safety could  grant  enforcement  authority to  park                                                                    
rangers at the Department of Natural Resources.                                                                                 
                                                                                                                                
Senator Wilken referred  to the fiscal note and  said he was                                                                    
surprised that  no impact is  indicated for the  Division of                                                                    
Fish and Wildlife Protection.                                                                                                   
                                                                                                                                
MELINDA  HOFSTAD,  staff  to Representative  Hudson  replied                                                                    
that she had  talked to a representative of  the division to                                                                    
verify that there  would in fact be no  increased costs with                                                                    
this legislation.                                                                                                               
                                                                                                                                
Senator  Wilken  commented that  he  was  raised on  a  lake                                                                    
outside Fairbanks  and had yet  to see a death  occurring in                                                                    
the  area.  While he  thought  this  bill is  necessary  for                                                                    
saltwater areas,  but not appropriate for  those areas where                                                                    
boaters can never  leave sight of shore.  He appreciated and                                                                    
agreed with the sponsor's intent,  but thought it was not in                                                                    
the best  interest of those  in the district  he represents.                                                                    
He  asserted that  the  bill is  "too  much government."  He                                                                    
stated  that he  would not  object to  moving the  bill from                                                                    
Committee, but  he would vote  against its passage  from the                                                                    
Senate.                                                                                                                         
                                                                                                                                
Representative   Hudson  advised   that  one-third   of  all                                                                    
drowning deaths in Alaska occur on freshwater.                                                                                  
                                                                                                                                
Senator Leman asked about the  safety equipment required for                                                                    
open vessels, such as skiffs.                                                                                                   
                                                                                                                                
Representative Hudson replied that if  a boat has a motor, a                                                                    
fire extinguisher is required.  He clarified that the safety                                                                    
equipment requirements  are established and enforced  by the                                                                    
USCG and are  in effect whether this bill passes  or not. He                                                                   
added that the USCG and  state statute also requires a light                                                                    
that can be displayed when operating at night.                                                                                  
                                                                                                                                
Senator Leman  commented that he requires  all passengers in                                                                    
his boat to actually wear a  PFD. He noted the bill requires                                                                    
an  additional  PFD that  can  be  thrown  and asked  for  a                                                                    
definition.                                                                                                                     
                                                                                                                                
Representative Hudson  answered that  a PFD device  that can                                                                    
be  thrown,  either  a  ring  or  a  floatation  cushion  is                                                                    
required in federal law.                                                                                                        
                                                                                                                                
Senator  Leman  shared that  the  reason  he questioned  the                                                                    
requirement  is  because  many  smaller  vessels  have  very                                                                    
limited space to carry items.                                                                                                   
                                                                                                                                
Representative Hudson  responded that the safety  gear could                                                                    
be  accommodated  if  the  boat   is  loaded  correctly.  He                                                                    
attested to the lifesaving benefits of a throwable PFD.                                                                         
                                                                                                                                
Senator Phillips offered a motion  to report from Committee,                                                                    
SCS CS HB 108 (RES) as amended.                                                                                                 
                                                                                                                                
[NOTE: The  sound system was inadvertently  disconnected and                                                                    
the remainder  of the  meeting was  not recorded.  No action                                                                    
was taken on the bills heard.]                                                                                                  
                                                                                                                                
     COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 432(FIN)                                                                           
     "An Act extending the termination  date of the Board of                                                                    
     Storage  Tank Assistance;  expanding  the authority  of                                                                    
     the board  to issue recommendations  concerning cleanup                                                                    
     decisions;  relating  to  the  eligibility  of  certain                                                                    
     nonprofit entities  for financial assistance  under the                                                                    
     tank cleanup  grant program and the  tank upgrading and                                                                    
     closure program; and providing for an effective date."                                                                     
                                                                                                                                
                                                                                                                                
JOHN BARNETT,  Board of  Storage Tank  Assistance, testified                                                                    
to the bill.                                                                                                                    
                                                                                                                                
Co-Chair Torgerson  asked if  it would  take the  board four                                                                    
more years to complete its business.                                                                                            
                                                                                                                                
Mr. Barnett  asserted there is  always trouble  when working                                                                    
with the Department of  Environmental Conservation. He noted                                                                    
that most cleanups are undertaken in phases, thus extending                                                                    
the time required for completion.                                                                                               
                                                                                                                                
Senator Leman supported an extension of the cleanup date.                                                                       
                                                                                                                                
Co-Chair Torgerson ordered the bill HELD in Committee.                                                                          
                                                                                                                                
     COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 277(FIN)                                                                           
     "An Act relating to payment  of retirement benefits for                                                                    
     certain subsequently reemployed  retired members of the                                                                    
     teachers'  retirement  system;  and  providing  for  an                                                                    
     effective date."                                                                                                           
                                                                                                                                
                                                                                                                                
JOHNATHON LACK, staff to Representative Andrew Halcro,                                                                          
presented the bill.                                                                                                             
                                                                                                                                
Mr. Lack referred to the sponsor statement, which reads as                                                                      
follows.                                                                                                                        
                                                                                                                                
          The pool of qualified teachers in Alaska is                                                                           
     shrinking dramatically.  The situation  is particularly                                                                    
     dire in the area of  special education. To address this                                                                    
     shortage I have sponsored HB 277.                                                                                          
          This legislation would allow teachers who have                                                                        
     retired  to return  to teaching  in the  public schools                                                                    
     without forfeiting  their retirement  benefits. Retired                                                                    
     teachers would  be able to  be re-employed by  a school                                                                    
     district.   They  would   continue  to   receive  their                                                                    
     retirement benefits,  thus reducing the cost  to school                                                                    
     districts,   but   compensating  experienced   teachers                                                                    
     through a combination of pay and benefits.                                                                                 
          Presently, teachers, once retired, may only work                                                                      
     40% of full-time in a  school district without forgoing                                                                    
     their benefits.  HB 277 would provide  school districts                                                                    
     with the opportunity to  rehire experienced teachers at                                                                    
     a lower cost to the public.                                                                                                
                                                                                                                                
JOHN SEER, National Education Association (NEA)-Alaska,                                                                         
testified in support of the bill.                                                                                               
                                                                                                                                
CATHY GILLESPIE, Anchorage School Board, commented on                                                                           
concerns she had with the bill. She requested a delay in                                                                        
implementing such a program.                                                                                                    
                                                                                                                                
Senator Adams stressed the teacher shortage in rural                                                                           
Alaska.                                                                                                                         
                                                                                                                                
GUY BELL, Director, Division of Retirement and Benefits,                                                                        
Department of Administration testified on the following                                                                         
points.                                                                                                                         
                                                                                                                                
     ΠSpeaking from the perspective of the Teacher's                                                                           
        Retirement Fund (TRS).                                                                                                  
     ΠThe division submitted a fiscal note with an                                                                             
        indeterminate fiscal impact, because the cost to the                                                                    
        retirement system will  depend on how  many retirees                                                                    
        are rehired under the provision of HB 277.                                                                              
     ΠApproximately 1,200 of 9,400 active Alaska teachers                                                                      
        have 20 or more years of TRS service.                                                                                   
     ΠIf a significant number of these people retire and                                                                       
        are rehired under  the provisions  of HB  277, there                                                                    
        will be  a  material  cost  to  the TRS  fund.  Cost                                                                    
        increases  to  the  TRS  fund  result  in  increased                                                                    
        employer rates.                                                                                                         
     ΠOn the other hand, if school districts make a                                                                            
        determination of  shortage  for  only a  handful  of                                                                    
        teacher positions and, therefore, only  rehire a few                                                                    
        retirees, the  fiscal  impact  on  the TRS  will  be                                                                    
        immaterial.                                                                                                             
                                                                                                                                
Co-Chair Torgerson ordered the bill HELD in Committee.                                                                          
##                                                                                                                              
ADJOURNED                                                                                                                   
                                                                                                                                
Senator Torgerson adjourned the meeting at 10:58 PM.                                                                            

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