Legislature(2011 - 2012)SENATE FINANCE 532

02/24/2012 09:00 AM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 27 FLAME RETARDANTS AND TOXIC CHEMICALS TELECONFERENCED
Moved CSSB 27(HSS) Out of Committee
+= SB 136 INCOME TAX CREDIT FOR EMPLOYING A VETERAN TELECONFERENCED
Moved CSSB 136(FIN) Out of Committee
+= SB 68 COMMERCIAL FISHING & AGRICULTURE BANK TELECONFERENCED
Moved SB 68 Out of Committee
+= SB 144 STATE IMMUNIZATION PROGRAM TELECONFERENCED
Scheduled But Not Heard
+ Bills Previously Heard/Scheduled TELECONFERENCED
                 SENATE FINANCE COMMITTEE                                                                                       
                     February 24, 2012                                                                                          
                         9:04 a.m.                                                                                              
                                                                                                                                
                                                                                                                                
9:04:54 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Stedman called the Senate Finance Committee                                                                            
meeting to order at 9:04 a.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Bert Stedman, Co-Chair                                                                                                  
Senator Lesil McGuire, Vice-Chair                                                                                               
Senator Johnny Ellis                                                                                                            
Senator Dennis Egan                                                                                                             
Senator Donny Olson                                                                                                             
Senator Joe Thomas                                                                                                              
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Senator Bill  Wielechowski; Darwin Peterson,  Staff, Senator                                                                    
Bert Stedman;  Rynnieva Moss,  Staff, Senator  John Coghill;                                                                    
Jordan  Shilling,  Intern,  Senator  John  Coghill;  Senator                                                                    
Cathy Giessel.                                                                                                                  
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
CSSB 27(HSS)                                                                                                                    
          FLAME RETARDANTS AND TOXIC CHEMICALS                                                                                  
                                                                                                                                
          CSSB 27(HSS) was REPORTED out  of committee with a                                                                    
          "do  pass"  recommendation  and with  a  new  zero                                                                    
          fiscal  note from  the  Department  of Health  and                                                                    
          Social Services,  a new zero fiscal  note from the                                                                    
          Department  of Public  Safety,  and  a new  fiscal                                                                    
          impact note  from the Department  of Environmental                                                                    
          Conservation.                                                                                                         
                                                                                                                                
SB 68     COMMERCIAL FISHING & AGRICULTURE BANK                                                                                 
                                                                                                                                
          SB 68  was REPORTED  out of  committee with  a "do                                                                    
          pass" recommendation and with  a new fiscal impact                                                                    
          note  from the  Department of  Commerce, Community                                                                    
          and Economic Development.                                                                                             
                                                                                                                                
SB 136    INCOME TAX CREDIT FOR EMPLOYING A VETERAN                                                                             
                                                                                                                                
          CSSB 136(FIN) was REPORTED out of committee with                                                                      
          a "do pass" recommendation and with a previously                                                                      
          published indeterminate fiscal note: FN1 (DOR).                                                                       
                                                                                                                                
SB 144    STATE IMMUNIZATION PROGRAM                                                                                            
                                                                                                                                
          SB 144 was SCHEDULED but not HEARD.                                                                                   
                                                                                                                                
Co-Chair Stedman  noted that  SB 144  had been  removed from                                                                    
the  agenda  because  the  fiscal  note  had  been  received                                                                    
several  minutes  prior to  the  meeting  and had  not  been                                                                    
reviewed yet;  the bill would  be rescheduled the  after the                                                                    
documents had  been examined.  Co-Chair Stedman  stated that                                                                    
this was  the second hearing on  SB 27. He observed  that it                                                                    
had been  a while  since the committee  had first  heard the                                                                    
bill and requested a review.                                                                                                    
                                                                                                                                
CS FOR SENATE BILL NO. 27(HSS)                                                                                                
                                                                                                                                
     "An  Act  relating  to  flame  retardants  and  to  the                                                                    
     manufacture,   sale,  and   distribution  of   products                                                                    
     containing flame  retardants; relating to  a multistate                                                                    
     chemicals   clearinghouse;   and   providing   for   an                                                                    
     effective date."                                                                                                           
                                                                                                                                
9:06:03 AM                                                                                                                    
                                                                                                                                
SENATOR  BILL WIELECHOWSKI,  read from  a sponsor  statement                                                                    
(copy  on file)  and introduced  SB 27.  He stated  that the                                                                    
bill  would  ban  the  use  polybrominated  fire  retardants                                                                    
(PBDEs)  from being  manufactured, distributed,  or sold  in                                                                    
the state  of Alaska; the  negative health effects  of these                                                                    
chemicals  had been  well documented,  and  their impact  on                                                                    
children was disproportionately high.                                                                                           
                                                                                                                                
     Alaskans   are   particularly  vulnerable   for   three                                                                    
     reasons: We  spend a  lot of  time indoors  with little                                                                    
     ventilation, increasing  our exposure to  and ingestion                                                                    
     of  the  microscopic  particles   of  toxins  found  in                                                                    
     household  dust that  are released  from our  furniture                                                                    
     and  electronics; we  eat  subsistence  foods that  may                                                                    
     concentrate  toxins; and  through  a  process known  as                                                                    
     global distillation,  toxins such as PBDEs  are carried                                                                    
     in the  atmosphere for great  distances from  points of                                                                    
     manufacture and concentrate in cold climates.                                                                              
                                                                                                                                
He addressed  several concerns that  were raised  during the                                                                    
last hearing  on the  bill by  stating that  the legislation                                                                    
would not impact  fire safety and would  not exempt products                                                                    
from meeting  existing fire safety standards;  there was not                                                                    
a trade-off where the legislature  would be forced to decide                                                                    
between the "lesser  of two evils". He noted  that there had                                                                    
been concerns  that the bill  increased costs  to consumers,                                                                    
but  indicated that  this was  not true.  He explained  that                                                                    
similar  bans  had  been  adopted  in  the  European  Union,                                                                    
Illinois,  and Washington  and  that  affordability had  not                                                                    
been an issue  in those states. He  directed the committee's                                                                    
attention to a letter  from an Illinois Representative named                                                                    
Elaine Nekritz (copy  on file); it stated  that the Illinois                                                                    
Environmental    Protection   Agency    had   conducted    a                                                                    
comprehensive  study  to determine  if  there  were cost  or                                                                    
affordability  issues associated  with  the  state's ban  on                                                                    
PBDEs,   but   had   determined  that   there   were   none.                                                                    
Affordability issues did not exist  because there were large                                                                    
markets  that  had already  exempted  and  banned PBDEs.  He                                                                    
stated  that there  were many  companies that  did not  sell                                                                    
PBDEs and gave an example  that the prior summer Walmart had                                                                    
adopted  enhanced  testing on  products  to  insure that  no                                                                    
PBDEs were sold  in their stores. He shared that  he had not                                                                    
heard  anything from  his  constituents regarding  increased                                                                    
prices  in   consumer  grids  and  anticipated   that  other                                                                    
retailers  would  conform  easily  to  the  legislation.  He                                                                    
offered that the "simple truth"  was that PBDEs were largely                                                                    
being  manufactured abroad;  the  legislation would  protect                                                                    
American  jobs  and  the health  of  children  from  foreign                                                                    
companies  that  sold  products  with  toxic  chemicals.  He                                                                    
concluded  that the  bill had  widespread statewide  support                                                                    
from health officials and concerned citizens.                                                                                   
                                                                                                                                
Co-Chair Stedman discussed  a new zero fiscal  note from the                                                                    
Department of Health and Social  Services, a new zero fiscal                                                                    
note from the Department of  Public Safety, and a new fiscal                                                                    
impact   note   from   the   Department   of   Environmental                                                                    
Conservation for $139,000  in general funds for  a new full-                                                                    
time environmental program specialist.                                                                                          
                                                                                                                                
9:10:33 AM                                                                                                                    
                                                                                                                                
Senator Ellis MOVED to report  CSSB 27(HSS) out of committee                                                                    
with individual recommendations  and the accompanying fiscal                                                                    
notes. There being NO OBJECTION, it was so ordered.                                                                             
                                                                                                                                
9:10:45 AM                                                                                                                    
                                                                                                                                
CSSB 27(HSS) was REPORTED out  of committee with a "do pass"                                                                    
recommendation  and with  a new  zero fiscal  note from  the                                                                    
Department of Health and Social  Services, a new zero fiscal                                                                    
note from the Department of  Public Safety, and a new fiscal                                                                    
impact   note   from   the   Department   of   Environmental                                                                    
Conservation.                                                                                                                   
                                                                                                                                
SENATE BILL NO. 136                                                                                                           
                                                                                                                                
     "An Act providing a tax  credit for employing an Alaska                                                                    
     veteran that may  be taken against a  liability for the                                                                    
     tax  on  corporation  income;   and  providing  for  an                                                                    
     effective date."                                                                                                           
                                                                                                                                
9:11:14 AM                                                                                                                    
                                                                                                                                
Senator  Ellis   MOVED  to  ADOPT  the   proposed  committee                                                                    
substitute  for SB  136,  Work  Draft 27-LS0983\R  (Bullock,                                                                    
2/16/12) as a working document.                                                                                                 
                                                                                                                                
9:11:19 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman Objected for the purpose of discussion.                                                                        
                                                                                                                                
DARWIN  PETERSON,  STAFF,  SENATOR BERT  STEDMAN,  explained                                                                    
that  the new  CS  version R  incorporated  four changes  as                                                                    
follows:                                                                                                                        
        · Subsection B on page 1, line 9 was rewritten so                                                                       
          that in order for the tax credit to apply, the                                                                        
          veteran must have been unemployed for at least                                                                        
          four weeks.                                                                                                           
                                                                                                                                
        · Page 1, line 13 now required the tax credit to be                                                                     
          applicable for up to ten years for disabled                                                                           
          veterans.                                                                                                             
                                                                                                                                
        · On page 2, line 7 the amount of the tax credit                                                                        
          was increased to $3,000 for a disabled veteran;                                                                       
          the amount remained $2,000 for other veterans.                                                                        
                                                                                                                                
        · On page 2, line 9 a $1,000 tax credit was added                                                                       
          for seasonal employment; under this section, a                                                                        
          veteran must be employed for at least 600 hours                                                                       
          for five consecutive months in order to qualify.                                                                      
                                                                                                                                
9:12:47 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman  WITHDREW his OBJECTION. Seeing  NO FURTHER                                                                    
OBJECTION, Work Draft 27-LS0983\R was ADOPTED.                                                                                  
                                                                                                                                
Senator Wielechowski  introduced SB 136 and  stated that the                                                                    
changes in the new CS  made the legislation better. The bill                                                                    
was designed  assist veterans with the  unemployment problem                                                                    
that they were currently  experiencing. He stated that there                                                                    
had  been  concerns  raised  during  a  veterans  summit  in                                                                    
Fairbanks  and at  a  town hall  meeting  in Anchorage  that                                                                    
veterans had a higher  than average unemployment rate state-                                                                    
wide, as well as on the national level.                                                                                         
                                                                                                                                
Senator  Wielechowski explained  that the  first Section  of                                                                    
the  bill specified  that you  could take  a tax  credit for                                                                    
employing a  veteran; the credit  could be taken  within ten                                                                    
years of service for disabled  veterans and within two years                                                                    
for   non-disabled  veterans.   The  rationale   behind  the                                                                    
timeframe was that  it was harder for veterans  to find jobs                                                                    
during the first months and years after exiting service.                                                                        
                                                                                                                                
Senator Wielechowski  stated that  sub-Section C on  page 2,                                                                    
lines 5 through 8 detailed that  in order to qualify for the                                                                    
tax credit,  employment had to  cover 12  consecutive months                                                                    
and 1,560 work  hours; the credit was $3,000  for a disabled                                                                    
veteran and $2,000 for a non-disabled veteran.                                                                                  
                                                                                                                                
Senator Wielechowski pointed out  that sub-Section 2 on page                                                                    
2, lines 9 through 13 was  added in response to a suggestion                                                                    
from Senator  Thomas and that  it incorporated a  $1,000 tax                                                                    
credit for employing a veteran in a seasonal position.                                                                          
                                                                                                                                
9:15:26 AM                                                                                                                    
                                                                                                                                
Senator  Olson  referenced  the  tax  credit  increase  from                                                                    
$2,000 to $3,000  for disabled veterans and  queried how the                                                                    
amount   of  $2,000   was   initially  determined.   Senator                                                                    
Wielechowski  responded that  the amount  of the  credit had                                                                    
been determined by looking at  what the other states and the                                                                    
federal government had  set their credits at.  He noted that                                                                    
he believed the  federal government had set  their credit at                                                                    
$2,400.  He observed  that it  had  been Co-Chair  Stedman's                                                                    
idea  to  increase  the  credit  in SB  136  to  $3,000  for                                                                    
disabled veterans and stated that he agreed with the idea.                                                                      
                                                                                                                                
Senator Olson asked  how the tax credit compared  to that of                                                                    
other states.  Senator Wielechowski stated  that Legislative                                                                    
Research Services had conducted  an analysis about the other                                                                    
state  and  federal  tax  credits  that  were  available  to                                                                    
veterans (copy on  file). He gave examples  of other state's                                                                    
veteran tax credits as follows:                                                                                                 
                                                                                                                                
              · Vermont had a $2,000 tax incentive, but it                                                                      
                only applied to veterans who had returned                                                                       
                from deployment in Afghanistan or Iraq with                                                                     
                the last two years.                                                                                             
                                                                                                                                
              · California's veteran tax credit required                                                                        
                that a veteran had left service in the last                                                                     
                48 months.                                                                                                      
                                                                                                                                
              · Illinois had a tax credit that was not to                                                                       
                exceed $1,200 annually.                                                                                         
                                                                                                                                
              · West-Virginia had a tax credit available to                                                                     
                an employer of the first $5,000 in wages.                                                                       
                                                                                                                                
Senator Thomas  thanked the bill  sponsor for  the inclusion                                                                    
of seasonal employment in the legislation.                                                                                      
                                                                                                                                
Co-Chair   Stedman   discussed    a   previously   published                                                                    
indeterminate fiscal note: FN1 (DOR).                                                                                           
                                                                                                                                
9:17:50 AM                                                                                                                    
                                                                                                                                
Senator  Ellis   MOVED  to  report  CSSB   136(FIN)  out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal  note. There being NO  OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
9:18:23 AM                                                                                                                    
                                                                                                                                
CSSB  136(FIN) was  REPORTED  out of  committee  with a  "do                                                                    
pass"  recommendation   and  with  a   previously  published                                                                    
indeterminate fiscal note: FN1 (DOR).                                                                                           
                                                                                                                                
Co-Chair Stedman asked that the  record reflect that Senator                                                                    
McGuire  had joined  the committee  and  that Senator  Cathy                                                                    
Giessel had been present throughout the meeting.                                                                                
                                                                                                                                
SENATE BILL NO. 68                                                                                                            
                                                                                                                                
     "An  Act relating  to the  examinations, board,  loans,                                                                    
     records,   and  lobbying   contracts   of  the   Alaska                                                                    
     Commercial Fishing and  Agriculture Bank; and providing                                                                    
     for an effective date."                                                                                                    
                                                                                                                                
9:19:12 AM                                                                                                                    
                                                                                                                                
RYNNIEVA  MOSS, STAFF,  SENATOR  JOHN  COGHILL, stated  that                                                                    
Senator Coghill sent his apologies  for his absence and that                                                                    
the Senator was attending  meetings for the Select Committee                                                                    
on Legislative Ethics, of which he was a member.                                                                                
                                                                                                                                
JORDAN  SHILLING, INTERN,  SENATOR JOHN  COGHILL, introduced                                                                    
SB  68  and stated  that  when  the Commercial  Fishing  and                                                                    
Agriculture Bank  (CFAB) was established  in 1980,  they had                                                                    
received seed money from the state;  the money was a loan to                                                                    
be paid back to the general  fund with interest. As a result                                                                    
of  the loan,  certain restrictions  such as  specific board                                                                    
member requirements, limits on  loans, limits on eligibility                                                                    
for loans,  and the ability  to lobby were placed  on banks.                                                                    
Although  CFAB  had  repaid the  seed  money,  the  statutes                                                                    
restricting  their  operations  remained in  effect;  SB  68                                                                    
lifted those  restrictions and would  allow CFAB  to compete                                                                    
in the  loan market  in the same  capacity as  other private                                                                    
lending institutions.                                                                                                           
                                                                                                                                
9:20:46 AM                                                                                                                    
                                                                                                                                
Co-Chair   Stedman  discussed   a  fiscal   note  from   the                                                                    
Department of  Commerce, Community and  Economic Development                                                                    
reflecting  $5,800  in  travel  costs for  the  Banking  and                                                                    
Securities Division  to conduct  an examination  every three                                                                    
years; the  note also  showed an  increase in  revenue every                                                                    
three years in the amount of $22,000.                                                                                           
                                                                                                                                
Senator  Olson  asked  if  other  lending  institutions  had                                                                    
voiced a  position on the  bill. Ms. Moss replied  that CFAB                                                                    
had been  in correspondence  with all  the major  lenders in                                                                    
the  state and  that there  had been  no objections  raised.                                                                    
Senator  Olson queried  if  CFAB had  been  in contact  with                                                                    
other   lending  institutions   besides   banks.  Ms.   Moss                                                                    
responded in the  affirmative and furthered that  it was her                                                                    
understanding that  other types of lending  institutions had                                                                    
been contacted.                                                                                                                 
                                                                                                                                
9:22:00 AM                                                                                                                    
                                                                                                                                
Senator Ellis  MOVED to report  SB 68 out of  committee with                                                                    
individual  recommendations  and   the  accompanying  fiscal                                                                    
note. There being NO OBJECTION, it was so ordered.                                                                              
                                                                                                                                
9:22:16 AM                                                                                                                    
                                                                                                                                
SB  68  was REPORTED  out  of  committee  with a  "do  pass"                                                                    
recommendation and  with a new  fiscal impact note  from the                                                                    
Department of Commerce, Community and Economic Development.                                                                     
                                                                                                                                
Co-Chair Stedman  discussed the  committee's agenda  for the                                                                    
next  several  weeks.  He  stated   that  they  would  begin                                                                    
reviewing  some of  the major  capital  projects and  agency                                                                    
overviews  the following  week, rather  than the  week after                                                                    
the  annual National  Energy Council  meetings. He  observed                                                                    
that the  schedule would give  them a "clearer  calendar" to                                                                    
deal  with  the oil  legislation.  He  stated that  the  oil                                                                    
legislation would  mostly likely  be ready after  the Energy                                                                    
Council meetings;  if it  was not ready  by this  point, the                                                                    
committee  would  continue  with   the  capital  budget  and                                                                    
integrate the  oil legislation later  on in the  process. He                                                                    
noted  that  the  preliminary  overview  hearings  with  PFC                                                                    
Energy had been  "tentatively" scheduled for the  end of the                                                                    
following  week and  that the  hearings would  not focus  on                                                                    
legislation;  they were  concept  specific presentations  on                                                                    
how Alaska  fit in  globally to  petroleum market  place and                                                                    
how  Alaska's  basin fit  in  with  British Petroleum  (BP),                                                                    
ConocoPhillips,  and   ExxonMobil.  He  observed   that  the                                                                    
integration of  the oil discussion  with the  capital budget                                                                    
would probably require the committee to meet twice a day.                                                                       
                                                                                                                                
ADJOURNMENT                                                                                                                   
9:24:28 AM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 9:24 AM.                                                                                           
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects
Approved LegLog 1027 Response to SB144 Questions ( Sen Stedman).pdf SFIN 2/24/2012 9:00:00 AM
SB 144
SB 68 2011 CFAB Annual Report.pdf SFIN 2/24/2012 9:00:00 AM
SB 68
SB 27 Opposition Burn Association.pdf SFIN 2/24/2012 9:00:00 AM
SB 27
SB 27 Opposition Letters.pdf SFIN 2/24/2012 9:00:00 AM
SB 27
SB 27 Opposition Letters 2.pdf SFIN 2/24/2012 9:00:00 AM
SB 27
SB 68 Amendment 1.pdf SFIN 2/24/2012 9:00:00 AM
SB 68
SB 27 (HSS) Sectional Analysis.pdf SFIN 2/24/2012 9:00:00 AM
SB 27
SB 144 Letter of Support - Covenant House of Alaska.pdf SFIN 2/24/2012 9:00:00 AM
SB 144