Legislature(2001 - 2002)

02/26/2001 09:05 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                              MINUTES                                                                                         
                     SENATE FINANCE COMMITTEE                                                                                 
                         February 26, 2001                                                                                    
                              9:05 AM                                                                                         
                                                                                                                                
                                                                                                                                
TAPES                                                                                                                       
                                                                                                                                
SFC-01 # 24,  Side A                                                                                                            
SFC 01 # 24,  Side B                                                                                                            
SFC 01 # 25,  Side A                                                                                                            
                                                                                                                              
CALL TO ORDER                                                                                                               
                                                                                                                                
Co-Chair Pete  Kelly convened the meeting at approximately  9:05 AM.                                                            
                                                                                                                                
PRESENT                                                                                                                     
                                                                                                                                
Senator Dave Donley, Co-Chair                                                                                                   
Senator Pete Kelly, Co-Chair                                                                                                    
Senator Jerry Ward, Vice Chair                                                                                                  
Senator Loren Leman                                                                                                             
Senator Lyda Green                                                                                                              
Senator Gary Wilken                                                                                                             
Senator Alan Austerman                                                                                                          
Senator Lyman Hoffman                                                                                                           
Senator Donald Olson                                                                                                            
                                                                                                                                
Also Attending:                                                                                                               
                                                                                                                                
SENATOR ROBIN TAYLOR; KRISTOPHER  KNAUSS, Staff, Senator Kelly; MATT                                                            
ROBUS,   Deputy  Director,   Division  of   Wildlife  Conservation,                                                             
Department  of  Fish  &  Game;  DAVID STEWARD,   Personnel  Manager,                                                            
Division of Personnel,  Department of Administration; CAROL CARROLL,                                                            
Director,  Division  of  Support  Services,  Department  of  Natural                                                            
Resources and Military and Veterans Affairs.                                                                                    
                                                                                                                              
Attending via Teleconference:                                                                                                 
                                                                                                                                
MICHAEL  E. SCHRADER, Attorney,  AterWynne,  LLP, Portland,  Oregon;                                                            
BRIAN BJORKQUIST,  Assistant Attorney General, Governmental  Affairs                                                            
Section, Department of Law.                                                                                                     
                                                                                                                                
SUMMARY INFORMATION                                                                                                         
                                                                                                                                
SB  72-TAKE A CHILD HUNTING SEASON                                                                                              
                                                                                                                                
The Committee heard from  the sponsor and the Department of Fish and                                                            
Game.  CS SB 72 (FIN) was reported out of Committee.                                                                            
                                                                                                                                
SB  64-HIGH SCHOOL DIPLOMA FOR CERTAIN WWII VETS                                                                                
                                                                                                                                
The  Committee  heard  from the  sponsor  and  CS  SB 64  (FIN)  was                                                            
reported out of Committee.                                                                                                      
                                                                                                                                
SB  65-STUDY OF PAY EQUITY FOR STATE EMPLOYEES                                                                                  
                                                                                                                                
The  Committee heard  from  the sponsor  and  the bill  was held  in                                                            
Committee.                                                                                                                      
                                                                                                                                
SB  84-PUBLIC UTILITY JOINT ACTION AGENCIES                                                                                     
                                                                                                                                
The  Committee  heard  from the  sponsor  and  CS  SB 84  (FIN)  was                                                            
reported out of Committee.                                                                                                      
                                                                                                                                
                                                                                                                                
     CS FOR SENATE BILL NO. 72(RES)                                                                                             
     "An Act relating to 'take-a-child-hunting' seasons for big                                                                 
     game."                                                                                                                     
                                                                                                                                
                                                                                                                                
KRISTOPHER  KNAUSS, Staff,  Senator Kelly,  stated that SB  72 would                                                            
allow  the Board  of  Game to  establish  big game  hunting  seasons                                                            
before the  school year starts  in the fall  and before the  regular                                                            
hunting season begins for  Alaskans.  Currently, many children begin                                                            
their school year before  the start of hunting season and are unable                                                            
to  share   the  experience   with  their   families.    Under   the                                                            
legislation,  families  would have  the  opportunity  to enjoy  time                                                            
together and learn important aspects of the hunting culture.                                                                    
                                                                                                                                
Mr. Knauss  stated SB 72  would require the  Board of Game  to limit                                                            
use of the "extended  season" to children accompanied  by a resident                                                            
parent, stepparent,  or legal  resident guardian.   The Board  would                                                            
have the authority in determining game units for implementation.                                                                
                                                                                                                                
Mr.  Knauss  referenced   the  blank  committee  substitute   before                                                            
Committee  members,  work draft,  22-LS0084\P,  Utermohle,  2/19/01.                                                            
[Copy on File].                                                                                                                 
                                                                                                                                
Co-Chair  Kelly moved  to adopt  that work  draft.   There being  no                                                            
objection,  the work  draft was ADOPTED  as the  version before  the                                                            
Committee.                                                                                                                      
                                                                                                                                
Senator Austerman  asked how the person  older than 17, but  not yet                                                            
21 years old would be classified.                                                                                               
                                                                                                                                
Co-Chair  Kelly noted  that his  staff had spoken  with Legislative                                                             
Legal who  stated, "judgment  calls  could be made"  on those  ages.                                                            
The intent  of the bill was  not to allow an  18 year old to  take a                                                            
17-year-old hunting.   However, a 21 year old could  take a 17-year-                                                            
old hunting.  There would be a separation provided in the bill.                                                                 
                                                                                                                                
MATT  ROBUS, Deputy  Director,  Division of  Wildlife Conservation,                                                             
Department of Fish & Game,  acknowledged that the Board of Game does                                                            
have  the authority  to establish  this  type of  hunt; however,  it                                                            
would develop  a new class of "hunter".   He pointed out  that given                                                            
that, it would be best  to address it through legislation.  The bill                                                            
language provides  the Board of Game discretion on  establishing the                                                            
hunts.                                                                                                                          
                                                                                                                                
Mr. Robus  stated that  such hunts  would not  be appropriate  where                                                            
there is already a hunting  season prior to school.  The legislation                                                            
should pertain  primarily to moose  hunts, which generally  start in                                                            
early September.                                                                                                                
                                                                                                                                
The  Department  requests   that  the  Board  of  Game  provide  the                                                            
following regulations:                                                                                                          
                                                                                                                                
     ·    Separate youth seasons from the main regular hunts;                                                                   
     ·    Administer the hunts through a registration hunt, in                                                                  
          order that participation could be tracked in the hunt so                                                              
          that the harvest would be known; and                                                                                  
     ·    Request that the registration hunt be established as a                                                                
          two-person hunt with a bag limit of one animal.                                                                       
                                                                                                                                
Mr. Robus  voiced his concern  with early  season moose hunting  and                                                            
how  successful children  would  be in  doing  that type  hunt.   He                                                            
commented  that caribou  and black  bear hunting  would probably  be                                                            
more successful for the child.                                                                                                  
                                                                                                                                
Senator Austerman asked the legal age for a license requirement.                                                                
                                                                                                                                
Mr. Robus  replied that there  is no legal  minimum age requirement                                                             
and that anyone under 16 years of age would not need a license.                                                                 
                                                                                                                                
Senator Austerman inquired  what was being classified as "big game".                                                            
                                                                                                                                
Mr. Robus  replied that big  game would be  black bear, brown  bear,                                                            
mountain goat, sheep, caribou, deer and moose.                                                                                  
                                                                                                                                
Senator Olson  questioned why musk  oxen had been excluded  from the                                                            
bill.                                                                                                                           
                                                                                                                                
Co-Chair Kelly replied  that was a recommendation of the Department.                                                            
                                                                                                                                
Senator Olson  noted that in his part  of the State, musk  oxen were                                                            
the only big game animals available to hunt.                                                                                    
                                                                                                                                
Co-Chair  Kelly  explained  that musk  oxen  are  strictly  "permit"                                                            
hunting.  He  added that harvest is  tightly managed because  of the                                                            
number of existing animals.                                                                                                     
                                                                                                                                
Senator Olson indicated  that in Nunivak, there are big game guides.                                                            
                                                                                                                                
Mr.  Robus  responded  that  in  Game  Management  Unit  #18,  which                                                            
includes Nunivak, a registration  permit is necessary for a cow musk                                                            
ox, with the month-long  season beginning September 1.  That hunt is                                                            
available  by registration  and not  by lottery.   He stressed  that                                                            
statewide, the musk oxen tend to be in short supply.                                                                            
                                                                                                                                
Co-Chair Kelly interjected  that in highly managed herds, the option                                                            
of youth hunts  would not be eligible.   The way, in which  the bill                                                            
is structured,  the Board would be  given the discretionary  choice.                                                            
                                                                                                                                
Senator  Olson interjected  that  he wanted  to guarantee  that  his                                                            
constituents were being represented.                                                                                            
                                                                                                                                
Co-Chair Kelly  indicated that he  would speak with the director  of                                                            
the Board of Wildlife Conservation regarding that concern.                                                                      
                                                                                                                                
Mr. Robus  explained to Senator  Green that  if there were  an adult                                                            
and  child   hunting  together   before  the   season  opened,   the                                                            
legislation  would allow the  adult to be  hunting before any  other                                                            
adult, which  would allow  the adult privileges  of taking  a second                                                            
animal.  He knew  that would be controversial for  those that do not                                                            
have children  and warned that it  could promote the youth  hunt for                                                            
the wrong reasons.                                                                                                              
                                                                                                                                
Senator  Green indicated  that  she did  not notice  those  concerns                                                            
addressed in the bill.                                                                                                          
                                                                                                                                
Co-Chair  Kelly stated  that the  Department  should indicate  those                                                            
concerns to  the Board.  He added  that he would also send  a letter                                                            
to the Board.                                                                                                                   
                                                                                                                                
Senator Hoffman  understood that whoever shoots the  animal would be                                                            
responsible  to tag it.  He asked  if only the child would  have the                                                            
authority to shoot.                                                                                                             
                                                                                                                                
Mr. Robus acknowledged  that whomever  shoots must tag it;  however,                                                            
either party can  shoot.   The Department advises  that animal would                                                            
then become  the animal allowance  for both of the parties  for that                                                            
season.                                                                                                                         
                                                                                                                                
Co-Chair  Kelly  commented  that the  point  of  who shoots  is  not                                                            
critical to  whom the tag is attributed.   If the family  decides to                                                            
take  advantage of  the early  season shot,  then the  tag would  be                                                            
used.                                                                                                                           
                                                                                                                                
Senator  Ward commented  that  he would  like to  encourage  parents                                                            
taking their children hunting.   He thought that some families might                                                            
need more than one animal  each year.  He added that the kill should                                                            
not take away from the parents permit.                                                                                          
                                                                                                                                
Co-Chair  Kelly interjected  that it would  not take away from  that                                                            
situation.   The family could  make the decision  and then  be given                                                            
the option.                                                                                                                     
                                                                                                                                
Senator  Leman moved  to report CS  SB 72(FIN)  from Committee  with                                                            
individual  recommendations and the  accompanying zero fiscal  note.                                                            
There being no  objection, CS SB 72 (FIN) MOVED from  Committee with                                                            
a  "do  pass"  recommendation   and  with  a  zero  fiscal  note  by                                                            
Department of Fish & Game.                                                                                                      
                                                                                                                                
                                                                                                                                
     SENATE BILL NO. 65                                                                                                         
     "An Act requiring a study to determine if gender is a                                                                      
     determinant in state employee compensation."                                                                               
                                                                                                                                
                                                                                                                                
Co-Chair Donley stated  that SB 65 would require the State of Alaska                                                            
to conduct  a study to determine if  gender is a determent  in State                                                            
employee compensation.   The State has never performed  a pay equity                                                            
study.  The bill  would provide a mechanism to bring  the State into                                                            
compliance  with federal law  and put an end  to any wage-based  sex                                                            
discrimination in State employment.                                                                                             
                                                                                                                                
Co-Chair Donley continued  that state employees should be paid based                                                            
on the value  of the work  they perform, not  based on whether  they                                                            
are men  or women.   He stated that  passage of  SB 65 is the  right                                                            
thing  to do.   Failure to  address  the situation  will expose  the                                                            
State to  expensive, time-consuming  and divisive  litigation.   The                                                            
approach established in  the bill would first identify if there were                                                            
instances  in which the State  is illegally  paying women less  than                                                            
men.   If  the  study finds  such  instances,  then the  State  will                                                            
develop phased strategies  to eliminate such sex discrimination.  SB
65 promotes  fairness in the workplace  and recognizes the  valuable                                                            
work  that  is  being  performed  by the  men  and  women  in  State                                                            
government.                                                                                                                     
                                                                                                                                
SENATOR  ROBIN TAYLOR  indicated  that a  major question  was  being                                                            
raised  and that  the pay  equity question  is one  that has  always                                                            
haunted  the State of  Alaska.   He acknowledged  that a study  does                                                            
need to be done.   In the last 15 to 20 years, the  State has seen a                                                            
lot  of change  and  tremendous transition.    He pointed  out  that                                                            
anyone could  go to most construction  jobs and see women  operating                                                            
heavy equipment.   Senator Taylor  noted that he supported  Co-Chair                                                            
Donley's effort.                                                                                                                
                                                                                                                                
DAVID STEWART, Personnel  Manager, Division of Personnel, Department                                                            
of Administration, understood  that the Department of Administration                                                            
would be required to create  a study to determine if gender plays an                                                            
inappropriate  role in determining State of Alaska  personnel wages.                                                            
He pointed out  that the current system follows the  laws adopted by                                                            
the Legislature, which  requires a regular integrated salary program                                                            
based  on the nature  of the  work being  done.   It requires  equal                                                            
treatment of employees  and applicants and requires  recruitment and                                                            
advancement of employees  based on their relative ability, knowledge                                                            
and skill.   Furthermore,  Alaska Statute  (AS) 18-80-220,  makes it                                                            
unlawful to discriminate  against sex when the reasonable demands of                                                            
the position  don't require that on  the basis of sex.  The  State's                                                            
current pay  systems have been tested  in Court and have  been found                                                            
to be fair.                                                                                                                     
                                                                                                                                
Mr. Stewart  added  that the  Department  would work  with the  bill                                                            
sponsors to help define  the problem and the issues inherent within.                                                            
The current system  contains supervisory and management  reviews and                                                            
Union appeal processes.   Decisions affecting pay are not unilateral                                                            
and  based on  universally  applied  criteria.   He  added that  the                                                            
external  review  processes  was  designed  to  produce appropriate                                                             
warning signals.   Mr. Steward  advised that  rarely does the  State                                                            
receive pay disputes.   The current system does not illegally assign                                                            
pay raises  based  on gender.   He noted  that  the Department  does                                                            
support checking the efforts and practices.                                                                                     
                                                                                                                                
Senator  Green asked if  there was  anyway to  allow "lag" time  for                                                            
corrective action to take place.                                                                                                
                                                                                                                                
Co-Chair Donley  believed that could  happen with a simple  majority                                                            
vote.  He recommended  consulting  with the legislative drafters  to                                                            
see if that was correct.                                                                                                        
                                                                                                                                
Co-Chair  Kelly  asked  if there  had  been discrimination   claimed                                                            
against men.  He recommended that  the criteria of the study  should                                                            
be broadened in order to look at sex discrimination both ways.                                                                  
                                                                                                                                
Co-Chair  Donley  responded that  the  legislation  would be  gender                                                            
based  and  not limited.    Language  referenced  in  the  sectional                                                            
analysis was used only  as an example and that there would be a full                                                            
analysis of both gender classes.                                                                                                
                                                                                                                                
Co-Chair Kelly pointed  out that the proposed legislation was not an                                                            
equal pay  for equal work-study,  but rather  pay equity.   He asked                                                            
Senator Donley to explain the difference.                                                                                       
                                                                                                                                
Co-Chair Donley discussed  that given two truck drivers, a man and a                                                            
woman, if either  of them is paid  differently with the same  duties                                                            
and experience,  then  an equal  pay problem  exists.   However,  if                                                            
there is a class  called assistant truck drivers and  a class called                                                            
truck driver assistant,  and one is dominated by women and the other                                                            
is dominated  by men,  and one class  is paid  differently from  the                                                            
other, then there exists a pay equity situation.                                                                                
                                                                                                                                
Senator Leman  asked what the legislation  was attempting  to solve.                                                            
He did not think that the  legislation really addressed the concerns                                                            
voiced by Senator  Donley.  He suggested  that looking at  the class                                                            
could determine the difference in the pay scheme.                                                                               
                                                                                                                                
Co-Chair  Donley  pointed  out  that Alaska  has  the  advantage  of                                                            
looking  at  the  results  from  other  states   that  have  already                                                            
undertaken the study.   He stressed that there is legitimate concern                                                            
and perception  that  there is  discrimination  happening in  Alaska                                                            
against women.   It is a fact that women in the State  are paid less                                                            
than men  overall.  He  reiterated that there  could be a  potential                                                            
problem  and the  only  way to  alleviate the  concern  would be  to                                                            
undertake such a study.                                                                                                         
                                                                                                                                
                                                                                                                                
SFC 01 # 24, Side B 09:56 AM                                                                                                    
                                                                                                                                
                                                                                                                                
Co-Chair  Donley  interjected  that  there  is  no  conclusion  that                                                            
discrimination exists, however, there exists a possibility.                                                                     
                                                                                                                                
Senator Leman  suggested there  could be other  ways to address  the                                                            
concern.      He   proposed   "actively   recruiting"   into   those                                                            
classifications.   Additionally,  wages paid  should be marketplace                                                             
wages.  Implementing both  of those would accomplish more than going                                                            
through the recommendations proposed in the bill.                                                                               
                                                                                                                                
Co-Chair Kelly  perceived that the career path within  State workers                                                            
appears  to be clear  and that women  do not seem  to be impeded  on                                                            
that path.  He stated that  different job classifications have to do                                                            
with  the marketplace.    He encouraged  Mr.  Stewart  to work  with                                                            
Senator Donley  in order to guarantee that the study  was crafted to                                                            
answer all the questions and concerns.                                                                                          
                                                                                                                                
Co-Chair  Kelly stated  that  the bill  would be  HELD in  Committee                                                            
until Senator  Donley and  the Department  could determine  what was                                                            
needed done.                                                                                                                    
                                                                                                                                
Senator Austerman  asked if the study would be contracted  out or if                                                            
it would be an independent study.                                                                                               
                                                                                                                                
Mr. Stewart replied that the study would be contracted out.                                                                     
                                                                                                                                
Co-Chair  Donley  acknowledged  that was  the  intent  and in  other                                                            
states where it had been contracted out, it was successful.                                                                     
                                                                                                                                
Senator  Green  questioned  why  the  Department  of  Labor  or  the                                                            
Department of Community  & Economic Development were not being used.                                                            
                                                                                                                                
Co-Chair Donley explained  that he was trying to integrate the State                                                            
of  Alaska's employment  system  and  compare  it with  other  state                                                            
surveys.  He added that  job classifications in our State system are                                                            
different from the surveys performed in other states.                                                                           
                                                                                                                                
Senator  Ward reminded  members that  the University  of Alaska  had                                                            
undertaken  a study like  this.  He recommended  checking with  them                                                            
regarding the  company who was contracted with.  That  study exposed                                                            
that the engineers  were predominately males and that  other classes                                                            
were   predominately   female.     He   believed  that   there   was                                                            
justification for doing the survey.                                                                                             
                                                                                                                                
Co-Chair  Kelly  inquired   if  it  had  been  an  equal  pay  study                                                            
undertaken by the University.                                                                                                   
                                                                                                                                
Senator Ward  remembered that the  study addressed classifications.                                                             
The females  were being  paid less because  of their classification                                                             
and that the study had been done five years ago.                                                                                
                                                                                                                                
Co-Chair Kelly  claimed that women tend to be the  lower paid member                                                            
of most  family units because  they make  the lifestyle choices  for                                                            
the betterment of the family.   He did not know how that information                                                            
would be quantified in a study.                                                                                                 
                                                                                                                                
Co-Chair Donley cautioned  that the Committee must be careful not to                                                            
override a  truly objective study.   There needs to be an  objective                                                            
frame of reference and  analysis.  Until that occurs, the perception                                                            
will continue.                                                                                                                  
                                                                                                                                
SB 65 was HELD in Committee.                                                                                                    
                                                                                                                                
                                                                                                                                
     CS FOR SENATE BILL NO. 84(JUD)                                                                                             
     "An   Act  exempting   certain  joint   action  agencies   from                                                            
     regulation  by the  state or  municipalities;  relating to  the                                                            
     relationship  between  certain joint  action  agencies and  the                                                            
     public utilities that  form the joint action agencies; relating                                                            
     to  powers and  immunities of  certain joint  action  agencies;                                                            
     requiring  filing of  certain joint  action agency agreements;                                                             
     relating  to  the financial  affairs  of certain  joint  action                                                            
     agencies;  declaring   certain  joint  action  agencies  to  be                                                            
     political  subdivisions   for  certain  purposes;  relating  to                                                            
     liability  and  indemnification  of  officers,  employees,  and                                                            
     agents of  certain joint action agencies; and  defining 'agency                                                            
     agreement'  and 'parties to the agency agreement'  as used with                                                            
     reference to certain joint action agencies."                                                                               
                                                                                                                                
                                                                                                                                
                                              st                                                                                
SENATOR  ROBIN  TAYLOR  advised  that  the 21    Legislature  passed                                                            
legislation   creating  the  Power   Cost  Equalization   (PCE)  and                                                            
authorizing  the  sale  of  the Four  Dam  Pool  Projects  to  local                                                            
utilities  and communities.    The PCE  Endowment was  funded by  an                                                            
appropriation from the  Constitutional Budget Reserve (CBR) and from                                                            
proceeds  from the sale  of the  Four Dam Pool  projects.   Governor                                                            
Knowles signed  the bills into law  in May 2000.  The Four  Dam Pool                                                            
Utilities  and the State  have been diligently  working to  complete                                                            
the complex  transaction  by  December 31,  2001.   At closing,  the                                                            
proceeds from  the sale would be deposited  into the PCE  Endowment.                                                            
                                                                                                                                
The Four  Dam Pool communities  and utilities  have created  a Joint                                                            
Action Agency  (JAA), which will become the owners  of the projects.                                                            
During  the legal  review  of the  new  organization,  a variety  of                                                            
technical  issues  were raised  concerning  the tax  and  regulatory                                                            
status of the JAA.                                                                                                              
                                                                                                                                
Senator Taylor  noted that  SB 84 would resolve  the issues  so that                                                            
the sale  of the project  could be completed  as envisioned  and the                                                            
endowment would be fully funded.                                                                                                
                                                                                                                                
The bill addresses the following four issues:                                                                                   
                                                                                                                                
     ·    Federal tax status of the Joint Action Agency;                                                                        
     ·    State tax status of the Joint Action Agency;                                                                          
     ·    Potential   liability  of  member  utilities   for  claims                                                            
          against the JAA; and                                                                                                  
     ·    Exemption from Regulatory Commission of Alaska (RCA).                                                                 
                                                                                                                                
Co-Chair Kelly asked if  the cooperative, currently regulated by the                                                            
RCA would be exempt.                                                                                                            
                                                                                                                                
Senator  Taylor responded  that none  of their  current regulations                                                             
would change.   The owner  of their utility,  the JAA, would  not be                                                            
subjected to that regulation.                                                                                                   
                                                                                                                                
Senator Green  referenced Page 3 of the sponsor statement  and asked                                                            
who would manage the tax.                                                                                                       
                                                                                                                                
Senator Taylor replied  that would be levied by the State.  The main                                                            
reason  for exempting  JAA  would  be to  guarantee  that  it is  an                                                            
instrumentality  of  government and  can issue  bonds.  Part of  the                                                            
problem is  that the municipalities  do not  want to sign up  if the                                                            
communities  were to become liable  if there were problems  with the                                                            
dam.   He recommended  that should be a liability  policy carried by                                                            
the JAA, not by  the State.  The entity itself has  to have a quasi-                                                            
government  look to it.   The State's purpose  in the sale  was that                                                            
the communities  could own the utilities  and operate them  and then                                                            
provide for  an income stream  back to the  State.  At some  date in                                                            
the future,  JAA will  disappear  when the member  communities  will                                                            
decide  to regionalize  the regulation.    Until the  debt has  been                                                            
paid, the State  of Alaska wants to  make certain that the  power of                                                            
sale agreement stays in place and the State is paid.                                                                            
                                                                                                                                
Senator Green asked who  would be liable in the worst-case scenario.                                                            
                                                                                                                                
Senator  Taylor replied  that JAA  would be responsible.   They  are                                                            
carrying insurance and have reserve funds for that purpose.                                                                     
                                                                                                                                
Senator  Austerman  asked if  the State  was currently  holding  the                                                            
liability.                                                                                                                      
                                                                                                                                
Senator  Taylor   responded  that  currently,  it   is  the  State's                                                            
liability.   The benefit to the State  is to get out from  under the                                                            
liability for  the projects.  Loss of revenue for  the State was the                                                            
catalyst  for  bringing about  a  final solution  to  the  endowment                                                            
created last year.  There  is a reserve and insurance policy to take                                                            
care of the projects.   The debt should be paid out  within eight to                                                            
twelve years  and could then  the power costs  could be reduced  for                                                            
the member utilities.                                                                                                           
                                                                                                                                
Senator Green  asked how the industry standard had  been determined.                                                            
                                                                                                                                
Senator  Taylor explained  that  an  engineering firm  who  provided                                                            
estimates of what  the possible losses could be expected  determined                                                            
number.  He added  that the transaction has not yet  been finalized.                                                            
                                                                                                                                
                                                                                                                                
MICHAEL E. SCHRADER, [Testified  via Teleconference], Attorney, Ater                                                            
Wynne, LLP, Portland,  Oregon, stated that his firm  had worked with                                                            
the Project Management  Committee and the Attorney  General's office                                                            
to prepare the text for SB 84.                                                                                                  
                                                                                                                                
Mr. Schrader  indicated  that Senator  Taylor had  done a great  job                                                            
explaining  the bill.  He  proposed a minor  amendment to the  bill.                                                            
He offered to answer questions of the Committee.                                                                                
                                                                                                                                
Senator Ward asked who did not have the power of eminent domain.                                                              
                                                                                                                                
Mr.  Schrader explained  the  concept of  eminent  domain which  are                                                            
powers driven  by the JAA as a governmental agency.   Currently, all                                                            
the  members of  the cooperative  have  those  powers.   There is  a                                                            
distinction in Alaska law  giving cooperatives and how they exercise                                                            
those powers being  one of procedure.  They can authorize  through a                                                            
Declaration  of   Taking,  a  procedure  for  title  transfers   and                                                            
Compensation for  the Taking.  In respect for the  cooperatives, the                                                            
system is reversed.  All  of the members currently have condemnation                                                            
powers.   With respect  to JAA,  the enabling  legislation that  was                                                            
adopted last  year, grants JAA, the  powers for a public  utility of                                                            
eminent domain  that is exercised by the cooperative.   However, for                                                            
tax purposes, it is the  condemnation powers and the powers with the                                                            
municipality.  [Audio Equipment Problems].                                                                                      
                                                                                                                                
Senator   Taylor  added   that  the   member   utilities  all   have                                                            
condemnation authority  at this time.  He stated that  this would be                                                            
the "fine  tuning" of  the agreement.   JAA is  still limited  to be                                                            
exercised  to the condemnation  authority  within the boundaries  of                                                            
where the individual owners could exercise their authority.                                                                     
                                                                                                                                
Senator  Taylor  understood  that  the State  Attorney  General  had                                                            
proposed minor modifications.                                                                                                   
                                                                                                                                
BRIAN BJORKQUIST,  Assistant Attorney General, Governmental  Affairs                                                            
Section,  Department of Law,  testified via  teleconference  that in                                                            
lieu of the property  tax other cooperatives are removed  from local                                                            
property   taxes.   The   modifications   are   to   clarify   JAA's                                                            
responsibility  for their  own debt.   The language  in the  bill is                                                            
clear that  the State of Alaska is  not subject.  He commented  that                                                            
other amendments  would clarify  the subject  of eminent domain  and                                                            
declaration of taking.   That should be limited to the powers of the                                                            
declaration  of  taking  within  the  boundaries   of  the  project.                                                            
Language  should  be issued  to  that section  regarding  all  those                                                            
powers.   He commented  that there  are three  proposed changes.   A                                                            
change to Page  3, Line 30, and Page 3, Line 31.   The purpose those                                                            
changes would  be to establish  the language  for the boundaries  of                                                            
the  project  and  the  declaration  of  taking.    *[Difficulty  in                                                          
understanding the teleconferenced speaker - inaudible].                                                                         
                                                                                                                                
Senator Taylor  noted that the suggested  amendments would  be a re-                                                            
clarification  of  definitions  regarding  imminent  domain  and  to                                                            
guarantee  that  the State  does not  become  liable  for the  debts                                                            
incurred  by JAA.    He suggested  that  the language  be  addressed                                                            
through a conceptual amendment  written by the legislative drafters.                                                            
                                                                                                                                
Senator  Austerman moved  to adopt  Amendment #1.   [Copy on  File].                                                            
There being no objection, the amendment was ADOPTED.                                                                            
                                                                                                                                
Senator  Leman believed  that the language  on Page  3, Line  12, "a                                                            
body corporate and politic and", was redundant.                                                                                 
                                                                                                                                
Senator Taylor explained  that there had been a number of attorney's                                                            
working  for  the  communities,  the Four  Dam  Pool  group,  Alaska                                                            
Industrial  Development Export  Authority (AIDEA)  and the  Attorney                                                            
General's Office.  Each  of those attorneys has attempted to address                                                            
all loopholes.  He reiterated  that is how the current language came                                                            
to be  and he  believed it  would do no  harm to  the intent  of the                                                            
legislation.                                                                                                                    
                                                                                                                                
Co-Chair  Kelly noted  that currently,  utilities  are paying  taxes                                                            
based on their wholesale value.                                                                                                 
                                                                                                                                
Senator  Taylor explained  that those  were fully  owned  utilities,                                                            
owned  by the  municipality itself.   As  a consequence,  they  will                                                            
generate wholesale  and retail to  consumers of the property.   They                                                            
do not charge  a tax on the sale of  their own electricity  to their                                                            
own  citizens.    Coops,  which  are  a  separate  entity  from  the                                                            
community  in which they  live, charge  a retail  tax.  That  tax is                                                            
actually charged by the State of Alaska.                                                                                        
                                                                                                                                
                                                                                                                                
SFC 01 # 25, Side A 10:54 AM                                                                                                    
                                                                                                                                
                                                                                                                                
Senator  Taylor continued,  there  is  only one  cooperative  entity                                                            
listed in the  bill and that group returns funds through  the tax to                                                            
its  service communities.    They would  continue  to receive  those                                                            
payments.                                                                                                                       
                                                                                                                                
Senator Austerman  moved to report  CS SB 84 (FIN) out of  Committee                                                            
with individual  recommendations and the accompanying  fiscal notes.                                                            
                                                                                                                                
There being no  objection, CS SB 84 (FIN) MOVED from  Committee with                                                            
a "do pass" recommendation  and with fiscal notes  #1, #2, and #3 by                                                            
Department of Community & Economic Development.                                                                                 
                                                                                                                                
                                                                                                                                
     CS FOR SENATE BILL NO. 64(HES)                                                                                             
     "An Act relating to the award of a high school diploma to                                                                  
     certain World War II veterans."                                                                                            
                                                                                                                                
                                                                                                                                
CAROL CARROLL,  Director, Division  of Support Services,  Department                                                            
of Natural  Resources and Military  and Veterans Affairs,  explained                                                            
that SB  64 would recognize  that many 17  year olds left school  to                                                            
join the United States  armed forces or the Alaska Territorial Guard                                                            
in order  to fight  in a war that  threatened  the stability  of the                                                            
world.  When they returned  home, many did not return to high school                                                            
and did not receive a high school diploma.                                                                                      
                                                                                                                                
In order  to recognize their  service to  this country, many  states                                                            
have joined  together to  pass legislation  similar to the  proposed                                                            
bill in  an effort named  "Operation Recognition".   She added  that                                                            
there  are  less  than 150  veterans  that  would  fall  within  the                                                            
guidelines  of the bill and  that veterans  or their families  would                                                            
need to apply to the Department of Education for the diploma.                                                                   
                                                                                                                                
Senator Green  moved to  adopt the work  draft, #22-GS1011\J,  Ford,                                                            
2/15/01,  as the version  of the bill before  the Committee.   There                                                            
being no objection, it was ADOPTED.                                                                                             
                                                                                                                                
Senator Austerman asked why the bill was brought forward.                                                                       
                                                                                                                                
Ms.  Carroll  stated  that  it  was  a  nationwide   program  called                                                            
"Operation Recognition".                                                                                                        
                                                                                                                                
Senator Leman  suggested that this  could "open up a can  of worms".                                                            
He proposed it be limited  to those that left high school to work as                                                            
a civilian for the armed forces.                                                                                                
                                                                                                                                
Ms. Carroll replied that  did not come up during discussions or with                                                            
legislation  in the  other states.  Many other  states have  adopted                                                            
similar legislation.                                                                                                            
                                                                                                                                
Senator Leman  reiterated that there  were some Alaskans  who worked                                                            
on various jobs  in a civilian position, supporting  the war effort.                                                            
He added that he did not  want to hold the bill up in Senate Finance                                                            
Committee  but requested that  be considered  before it goes  to the                                                            
Senate Floor.                                                                                                                   
                                                                                                                                
Senator Ward mentioned that he was a member of the Veterans of                                                                  
Foreign Wars (VFW) and that there had been discussions about not                                                                
broadening the language at this time.                                                                                           
                                                                                                                                
Senator Green moved to report CS SB 64(FIN) out of Committee with                                                               
individual recommendations and with the accompanying fiscal note.                                                               
There being no objection, it was so ordered.                                                                                    
                                                                                                                                
CS SB 64 (FIN) MOVED from Committee with a "do pass" recommendation                                                             
and fiscal note #1 by Department of Education & Early Development.                                                              
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
Co-Chair Pete Kelly adjourned the meeting at 11:02 AM                                                                           

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