Legislature(2009 - 2010)SENATE FINANCE 532

04/12/2010 09:00 AM Senate FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved CSSB 174(FIN) Out of Committee
Heard & Held
Heard & Held
Heard & Held
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
                 SENATE FINANCE COMMITTEE                                                                                       
                      April 12, 2010                                                                                            
                         9:13 a.m.                                                                                              
9:13:12 AM                                                                                                                    
CALL TO ORDER                                                                                                                 
Co-Chair  Stedman   called  the  Senate   Finance  Committee                                                                    
meeting to order at 9:13 a.m.                                                                                                   
MEMBERS PRESENT                                                                                                               
Senator Lyman Hoffman, Co-Chair                                                                                                 
Senator Bert Stedman, Co-Chair                                                                                                  
Senator Charlie Huggins, Vice-Chair                                                                                             
Senator Johnny Ellis                                                                                                            
Senator Dennis Egan                                                                                                             
Senator Donny Olson                                                                                                             
Senator Joe Thomas                                                                                                              
MEMBERS ABSENT                                                                                                                
ALSO PRESENT                                                                                                                  
Representative  Bryce Edgmon,  Sponsor; Representative  Beth                                                                    
Kerttula,  Sponsor;  Mindy Lobaugh,  Juneau;  Representative                                                                    
Wes  Keller, Sponsor;  Greg Winegar,  Director, Division  of                                                                    
Investments, Department of  Commerce, Community and Economic                                                                    
Development;  Pete   Ecklund,  Staff,   Representative  Bill                                                                    
PRESENT VIA TELECONFERENCE                                                                                                    
Monty  Gates,   Penn  Airways;  Danny   Seybert,  President,                                                                    
Peninsula Airways; Mark Palmer,  Ocean Beauty Seafoods; Mary                                                                    
McDowell,   Vice  President,   Pacific  Seafood   Processors                                                                    
SB 174    PROF STUDENT EXCHANGE LOAN FORGIVENESS                                                                                
          CSSB 174 (FIN) was  REPORTED out of Committee with                                                                    
          no recommendation  and with  a new fiscal  note by                                                                    
          Department of Education  and Early Development and                                                                    
          a new fiscal note by the University.                                                                                  
HB 20     FISHERIES LOANS: ENERGY EFFICIENCY/AMOUNT                                                                             
          HB 20 was heard and  HELD in Committee for further                                                                    
HB 344    SALMON  PRODUCT DEVELOP. TAX CREDIT                                                                                   
          HB  344  was  heard  and  HELD  in  Committee  for                                                                    
          further consideration.                                                                                                
HB 52     POST-TRIAL JUROR COUNSELING                                                                                           
          HB 52 was heard and  HELD in Committee for further                                                                    
HB 354    AK CAPSTONE AVIONICS REVOLVING LOAN FUND                                                                              
          HB  354  was  heard  and  HELD  in  Committee  for                                                                    
          further consideration.                                                                                                
9:13:30 AM                                                                                                                    
SENATE BILL NO. 174                                                                                                           
     "An Act relating to professional student exchange                                                                          
     program   availability   and    conditions   for   loan                                                                    
9:14:20 AM                                                                                                                    
Co-Chair Hoffman  MOVE to ADOPT  the CS for SB  174, labeled                                                                    
26-LS0764\D, as the working document.                                                                                           
Co-Chair Stedman  OBJECTED. He  said that Section  11, which                                                                    
referenced  loan repayments  under  the Washington,  Alaska,                                                                    
Montana,  Idaho (WAMI)  Program, had  been deleted  from the                                                                    
Co-Chair  Stedman WITHDREW  his  OBJECTION.  There being  NO                                                                    
OBJECTION, it was so ordered.                                                                                                   
Co-Chair Stedman  noted two  new fiscal  notes. One  is from                                                                    
the Department  of Education and  Early Development  for the                                                                    
Alaska   Commission  on   Post-Secondary  Education,   which                                                                    
reflects the cost of  funding the AlaskAdvantage Scholarship                                                                    
Program  and  the new  students  in  the Western  Interstate                                                                    
Commission  for   Higher  Education  Program   (WICHE),  for                                                                    
$11,700,000 in general funds. There  is also one fiscal note                                                                    
from the University reflecting the  general fund cost of the                                                                    
program for FY 11 at $7,732,000.                                                                                                
9:15:33 AM                                                                                                                    
Senator   Thomas   shared   a    concern   shared   by   the                                                                    
administration  about  the  idea of  structuring  curriculum                                                                    
changes. He  wished to have  more merit-based  components in                                                                    
the bill.                                                                                                                       
AT-EASE             9:16:41 AM                                                                                                
RECONVENED          9:19:16 AM                                                                                                
Co-Chair  Hoffman MOVED  to  REPORT CSSB  174  (FIN) out  of                                                                    
Committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes. There  being NO OBJECTION, it was                                                                    
so ordered.                                                                                                                     
CSSB 174 (FIN) CSSB 174  (FIN) was REPORTED out of Committee                                                                    
with no  recommendation and  with a new  fiscal note  by the                                                                    
Department  of Education  and Early  Development  and a  new                                                                    
fiscal note by the University.                                                                                                  
CS FOR HOUSE BILL NO. 20(FIN)                                                                                                 
     "An Act relating to commercial fishing loans for                                                                           
     energy efficiency upgrades and increasing the maximum                                                                      
     amount for certain loans under the Commercial Fishing                                                                      
     Loan Act; and providing for an effective date."                                                                            
Co-Chair Hoffman  MOVED to ADOPT the  SCS for CS for  HB 20,                                                                    
labeled 26-LS0124\T,  Kane, 4/8/10, as the  working document                                                                    
before the committee.                                                                                                           
Co-Chair Stedman OBJECTED. He  related that Version T limits                                                                    
the loans to engines and generators only.                                                                                       
Co-Chair Stedman  WITHDREW his OBJECTION. He  noted that the                                                                    
SCS  amends   the  title  and  will   require  a  concurrent                                                                    
9:21:00 AM                                                                                                                    
REPRESENTATIVE  BRYCE EDGMON,  SPONSOR, explained  the bill.                                                                    
He said  the bill  puts the  Engine Efficiency  Loan Program                                                                    
created  in  2008 into  statute  and  broadens the  pool  of                                                                    
eligible fishers who can participate.  He explained that the                                                                    
bill pertains to Sections A  and B of the Commercial Fishing                                                                    
Loan Act. It  allows for low interest rate  loans for vessel                                                                    
upgrades. He  added that  the bill  relies on  proceeds from                                                                    
the fund  itself and requires  no general fund  dollars. The                                                                    
Division  of  Investments  says   it  is  possible  that  an                                                                    
additional  position  would be  required,  but  it would  be                                                                    
funded  by program  receipts or  by  the commercial  fishery                                                                    
revolving fund.                                                                                                                 
Co-Chair Stedman noted that it  was the first hearing on the                                                                    
bill. He  highlighted one fiscal  note from   the Department                                                                    
of Commerce, Community, and Economic Development.                                                                               
Co-Chair  Stedman pointed  out that  page 2,  line 4,  would                                                                    
need  a  correction.  He  wanted   to  be  sure  the  entire                                                                    
generator would be included where  it states "for propulsion                                                                    
engine or  generator engine". Representative Edgmon  said he                                                                    
would support that correction.                                                                                                  
9:24:19 AM                                                                                                                    
Senator Olson  asked about  the eligibility  of out-of-state                                                                    
permit    holders.   Representative    Edgmon   noted    two                                                                    
requirements;   Alaska   residency   for  two   years,   and                                                                    
demonstration of  participation in a commercial  fishery for                                                                    
two out of the last five years.                                                                                                 
HB  20  was   heard  and  HELD  in   Committee  for  further                                                                    
9:26:03 AM                                                                                                                    
HOUSE BILL NO. 52                                                                                                             
     "An Act authorizing psychological counseling for                                                                           
     jurors serving in criminal trials who are traumatized                                                                      
     by graphic evidence or testimony."                                                                                         
REPRESENTATIVE  BETH KERTTULA,  SPONSOR, explained  that the                                                                    
bill  was  proposed  as  a   result  of  a  very  courageous                                                                    
constituent  and  her  involvement  as a  juror  in  a  very                                                                    
traumatic court case.  Representative Kerttula explained the                                                                    
process of  trying to  find counseling  for jurors  who have                                                                    
experienced trauma. She concluded  that legislation would be                                                                    
the best course of action.  She reported that she has worked                                                                    
with the courts  to come up with a plan  for counseling if a                                                                    
judge  feels   the  trial   was  a   particularly  gruesome,                                                                    
difficult case.                                                                                                                 
Senator  Olson  asked if  other  states  have this  type  of                                                                    
legislation. Representative  Kerttula shared that  Texas has                                                                    
legislation pending,  but has not  implemented it  yet. King                                                                    
County also has a juror counseling program.                                                                                     
Co-Chair Stedman noted a fiscal  note for $15,000 in general                                                                    
9:28:39 AM                                                                                                                    
MINDY LOBAUGH, JUNEAU, read a prepared statement:                                                                               
     Mr. Chairman  and members of  the committee,  thank you                                                                    
     for this  opportunity and all  you do for the  State of                                                                    
     This  bill represents  a bridge,  a bridge  that I  and                                                                    
     many other  jurors did not  have at  the end of  a very                                                                    
     traumatic trial.  You arrive  at the  courthouse, given                                                                    
     detailed instruction  of what is  expected of you  as a                                                                    
     juror and  how the process  of a trial works.  What the                                                                    
     court system  does not do  is transition the  juror out                                                                    
     of  the  trial.  It  is  not  uncommon  to  have  major                                                                    
     criminal trials run for many days.                                                                                         
     I served  as a juror  on the Rachelle Waterman  trial 4                                                                    
     years ago and  it lasted approximately 10  days. For me                                                                    
     I  arrived open  and ready  to do  my civic  duty as  a                                                                    
     Juror.   And  for   10  days   prosecutors  went   into                                                                    
     excruciating  detail  to  help the  jurors  relive  the                                                                    
     events of an unsuspecting  Mother getting abducted from                                                                    
     her home, tortured and finally murdered.                                                                                   
     It  was then  our duty  as jurors  to determine  if the                                                                    
     defendant,  her daughter  was  guilty of  masterminding                                                                    
     this tragedy against her own  mother, a woman who was a                                                                    
     pillar  of her  community. By  the end  of the  trial I                                                                    
     left  there  as  a   victim  feeling  closed,  mentally                                                                    
     battered  and   very  traumatized  by  the   burden  of                                                                    
     knowledge I now carried.                                                                                                   
     I am  here to  tell you  the media  does not  even come                                                                    
     close to  covering the depth  of this trial.  As jurors                                                                    
     we had access to piles  of emails detailing out various                                                                    
     ways these men planned to  kill the mother, in addition                                                                    
     to  physical evidence,  photographs and  of course  the                                                                    
     hours of testimony.                                                                                                        
     For  quite some  time during  and following  that trial                                                                    
     eating for me  was a near impossibility  because of the                                                                    
     constant  nausea I  felt. To  my friends  and family  I                                                                    
     became a  stranger….and each night  I prayed  myself to                                                                    
     One  of my  fellow  jury mates  was  pregnant with  her                                                                    
     second  child.  She  had   shared  her  excitement  and                                                                    
     ultrasound pictures  with us  early on.  By the  end of                                                                    
     the trial she lost her baby  and had to be excused from                                                                    
     the trial.                                                                                                                 
     When  this trial  finally ended,  with a  hung jury,  I                                                                    
     turned to  the presiding  judge and  ask if  the courts                                                                    
     offer  some  kind  of counseling  or  process  to  help                                                                    
     jurors deal with all  this traumatizing information and                                                                    
     help to  transition us  back to  our lives?  The answer                                                                    
     was NO.                                                                                                                    
     For me  it was like having  a door slammed in  my face.                                                                    
     There  would be  no help  in transitioning  back to  my                                                                    
     life before this trial, no  bridge. Rather I would have                                                                    
     to  move  forward  with   this  dark  knowledge  deeply                                                                    
     entrenched  in  my mind  and  the  minds of  my  fellow                                                                    
     jurors. And  I will never  forget the feeling  and look                                                                    
     of disappointment and confusion  in my fellow jurors as                                                                    
     we  wondered  how we  would  come  to terms  with  this                                                                    
     trial. It  was at  this point I  felt the  court system                                                                    
     had failed me as a juror doing my civic duty.                                                                              
     Mr. Chairman, members of the  committee, please help me                                                                    
     to build  this bridge  by supporting  HB 52  Post Trial                                                                    
     Jury Counseling.   I  may not  have found  closure with                                                                    
     respects to  this trial, but  maybe you can  help build                                                                    
     that bridge  for future Jurors  doing their  civic duty                                                                    
     by passing HB 52.                                                                                                          
Representative  Kerttula commented  on personal  experiences                                                                    
as a  lawyer and  cases of  traumatized jurors.  She related                                                                    
the importance of the bill.                                                                                                     
HB  52  was   heard  and  HELD  in   Committee  for  further                                                                    
9:33:13 AM                                                                                                                    
HOUSE BILL NO. 354                                                                                                            
     "An Act relating to eligibility for loans from the                                                                         
     Alaska capstone avionics revolving loan fund."                                                                             
REPRESENTATIVE WES  KELLER, SPONSOR,  explained that  HB 354                                                                    
upgrades  the  Capstone  Avionic  Loan  Program  to  include                                                                    
aircraft operators  in Alaska that lease  their aircraft. He                                                                    
spoke highly  of the Capstone  Program. He related  that the                                                                    
two pilot programs  had had great success  in decreasing the                                                                    
number  of accidents  by  40 percent.  The  FAA covered  the                                                                    
majority of  the cost of  the program. The state's  part was                                                                    
to get aircraft in the air with the equipment in place.                                                                         
9:35:53 AM                                                                                                                    
Senator Thomas  understood that the  bill would  help leased                                                                    
planes  in  commercial   operations.  Representative  Keller                                                                    
agreed. He explained  that the cost to  private pilots would                                                                    
be  extreme, so  this  legislation  would affect  commercial                                                                    
Senator Olson asked  how many of the  loans were delinquent.                                                                    
Representative Keller didn't know.                                                                                              
Senator Olson  recognized that  the thrust  of the  bill was                                                                    
for  leased  aircraft.  He  wondered  what  happens  to  the                                                                    
Capstone equipment  if the aircraft was  leased from outside                                                                    
the state and was  returned to another state. Representative                                                                    
Keller replied  that it  would stay  with the  airplane, but                                                                    
the  debt  would remain  with  the  company that  owned  it.                                                                    
Senator Olson  summarized that that the  avionics would stay                                                                    
with  the  plane  when it  left  the  state.  Representative                                                                    
Keller offered to find out.                                                                                                     
9:38:27 AM                                                                                                                    
Co-Chair  Stedman  noted  one  zero  fiscal  note  from  the                                                                    
Department    of   Commerce,    Community,   and    Economic                                                                    
GREG WINEGAR, DIRECTOR,  DIVISION OF INVESTMENTS, DEPARTMENT                                                                    
OF COMMERCE,  COMMUNITY AND ECONOMIC  DEVELOPMENT, addressed                                                                    
Senator Olson's  question and reported that  the delinquency                                                                    
rate on the loan program is zero.                                                                                               
Co-Chair Stedman  asked how  many loans  have been  made and                                                                    
when  the  program  began. Mr.  Winegar  reported  that  the                                                                    
program began  in 2008 and a  total of nine loans  have been                                                                    
made  totaling  about  $613,000. There  are  currently  five                                                                    
loans on the books.                                                                                                             
Co-Chair Stedman  asked if the  program was  successful. Mr.                                                                    
Winegar  thought  it  was. Co-Chair  Stedman  asked  if  the                                                                    
department supported the bill. Mr. Winegar said it did.                                                                         
9:40:15 AM                                                                                                                    
MONTY GATES, PENNINSULA  AIRWAYS (via teleconference), spoke                                                                    
in support of HB 354.                                                                                                           
DANNY   SEYBERT,    PRESIDENT,   PENINSULA    AIRWAYS   (via                                                                    
teleconference), spoke  of the need for  the Capstone system                                                                    
for flying  in the Aleutians.  He testified in favor  of the                                                                    
lease option.                                                                                                                   
Senator  Olson   commented  that  Capstone  has   shown  its                                                                    
effectiveness in decreasing the  number of accidents and air                                                                    
carriers are definitely in favor of it.                                                                                         
Representative Keller  noted the FAA has  projected that the                                                                    
death rates  from flying  will decrease  by 33  percent with                                                                    
this system in place.                                                                                                           
HB  354  was  heard  and   HELD  in  Committee  for  further                                                                    
9:43:21 AM                                                                                                                    
CS FOR HOUSE BILL NO. 344(FIN)                                                                                                
     "An Act relating to the salmon product development tax                                                                     
     credit; and providing for an effective date by                                                                             
     amending an effective date in sec. 7, ch. 57, SLA                                                                          
     2003, as amended by sec. 4, ch. 3, SLA 2006, and by                                                                        
     sec. 4, ch. 8, SLA 2008."                                                                                                  
PETE ECKLUND,  STAFF, REPRESENTATIVE BILL  THOMAS, explained                                                                    
the  bill. He  related that  the salmon  product development                                                                    
tax credit is an incentive to  add value to Alaska salmon in                                                                    
Alaska. It  originated with the  salmon industry  task force                                                                    
in 2002  and was one  of the key bills  to come out  of that                                                                    
effort. It  was put into  law in  2003. At the  time, market                                                                    
conditions  were   very  poor  and   there  was  a   lot  of                                                                    
competition   from   farmed   salmon.  The   credit   allows                                                                    
processors  to claim  up  to 50  percent of  the  cost of  a                                                                    
qualified investment  against their fisheries  business tax.                                                                    
The  taxpayer has  four years  to claim  the credit  and can                                                                    
deduct 50 percent of their  annual tax bill until the credit                                                                    
is satisfied.                                                                                                                   
Mr. Ecklund listed the  qualifying equipment: filet machine,                                                                    
pin  bone  machines,  glazing  and  smoking  equipment,  roe                                                                    
equipment,  and ice  making systems.  The equipment  must be                                                                    
new,  predominantly used  for salmon,  and  used for  making                                                                    
value-added products.                                                                                                           
Mr. Ecklund related  the positive outcomes of  the bill. The                                                                    
bill  would extend  the  program to  2015.  He stressed  the                                                                    
immediate  need  to extend  the  program  in order  for  the                                                                    
industry to continue long-range investment planning.                                                                            
9:45:56 AM                                                                                                                    
Senator Huggins  noted the  title of  the bill  said "salmon                                                                    
product".  He asked  if the  bill applies  to all  fish. Mr.                                                                    
Ecklund said it only applies to salmon.                                                                                         
Co-Chair  Stedman  noted  one  zero  fiscal  note  from  the                                                                    
Department of Revenue.                                                                                                          
MARK  PALMER, OCEAN  BEAUTY  SEAFOODS (via  teleconference),                                                                    
spoke in  support of the  bill. He  spoke of the  success of                                                                    
the program and future plans for his company.                                                                                   
9:49:00 AM                                                                                                                    
Co-Chair  Stedman  pointed  out   residual  effects  of  the                                                                    
MARY  MCDOWELL, VICE  PRESIDENT, PACIFIC  SEAFOOD PROCESSORS                                                                    
ASSOCIATION  (via  teleconference),  testified  strongly  in                                                                    
favor  of the  bill.  She  added that  the  tax credit  only                                                                    
covers a portion of the  expense of equipment, not marketing                                                                    
and other costs. It does provide an economic incentive.                                                                         
HB 344 was heard and HELD in Committee for further                                                                              
The meeting was adjourned at 9:51 AM.                                                                                           

Document Name Date/Time Subjects
HB 20 2010 0412 Proposed SCS Version T.pdf SFIN 4/12/2010 9:00:00 AM
HB 20
SB 174 2010 0412 Proposed CS SFIN Version D.pdf SFIN 4/12/2010 9:00:00 AM
SB 174