Legislature(2011 - 2012)SENATE FINANCE 532

04/15/2012 09:00 AM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Recessed to a Call of the Chair --
+ HB 359 SEX CRIMES; TESTIMONY BY VIDEO CONFERENCE TELECONFERENCED
Moved CSHB 359(FIN) am Out of Committee
+ HB 361 DISPOSALS OF STATE RESOURCES/ROYALTIES TELECONFERENCED
Moved SCS CSHB 361(FIN) Out of Committee
+ HB 264 MUNI PROPERTY TAX DEFERRAL: SUBDIVISIONS TELECONFERENCED
Moved SCS CSHB 264(FIN) Out of Committee
+ HB 89 EXTRACTION OF BEDLOAD MATERIAL TELECONFERENCED
Moved CSHB 89(RES) Out of Committee
+ HB 125 ALCOHOLIC BEVERAGE CONTROL BOARD TELECONFERENCED
Moved SCS CSHB 125(FIN) Out of Committee
Bills Previously Heard/Scheduled
+= HB 121 LOAN FUNDS:CHARTERS/MARICULTURE/MICROLOAN TELECONFERENCED
Moved SCS CSHB 121(FIN) Out of Committee
+= HB 279 EXTENDING CERTAIN BOARDS & COMMISSIONS TELECONFERENCED
Moved SCS CSHB 279(FIN) Out of Committee
                 SENATE FINANCE COMMITTEE                                                                                       
                      April 15, 2012                                                                                            
                         9:09 a.m.                                                                                              
                                                                                                                                
9:09:24 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair  Stedman   called  the  Senate   Finance  Committee                                                                    
meeting to order at 9:09 a.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Lyman Hoffman, Co-Chair                                                                                                 
Senator Bert Stedman, Co-Chair                                                                                                  
Senator Johnny Ellis                                                                                                            
Senator Dennis Egan                                                                                                             
Senator Donny Olson                                                                                                             
Senator Joe Thomas                                                                                                              
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Darwin  Peterson,   Staff,  Senator  Bert   Stedman;  Curtis                                                                    
Thayer,   Deputy  Commissioner,   Department  of   Commerce,                                                                    
Community  and  Economic  Development;  Juli  Lucky,  Staff,                                                                    
Representative Mike  Hawker; Annie Carpeneti,  Department of                                                                    
Law; Senator  Dennis Egan;  Ed Fogels,  Deputy Commissioner,                                                                    
Department of  Natural Resources; Christopher  Clark, Staff,                                                                    
Representative Cathy Munoz; Randy  Hoffbeck, Chief of Staff,                                                                    
North  Slope  Borough;   Representative  Paul  Seaton;  Matt                                                                    
Felix,  Alaska   Addiction  Professional   Association;  Jan                                                                    
Wrentmore;  Bob Coghill,  Self; Elaine  Vroman, Meeting  the                                                                    
Challenge, Anchorage.                                                                                                           
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Ellen  Ganley, Public  Member,  ABC  Board, Fairbanks;  Kate                                                                    
Burkhart, Executive  Director, Advisory Board  on Alcoholism                                                                    
and  Drug Abuse;  Chrystal Schoenrock,  Self, Nikiski;  Jeff                                                                    
Jessee, Chief Executive Officer,  Alaska Mental Health Trust                                                                    
Authority,  Anchorage; Johanna  Bales, Deputy  Director, Tax                                                                    
Division, Department of Revenue.                                                                                                
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
CSHB 89(RES)                                                                                                                    
          EXTRACTION OF BEDLOAD MATERIAL                                                                                        
                                                                                                                                
          CSHB 89(RES) was REPORTED out  of committee with a                                                                    
          "do   pass"   recommendation   and  with   a   new                                                                    
          indeterminate fiscal  note from the  Department of                                                                    
          Transportation  and  Public   Facilities  and  new                                                                    
          indeterminate  fiscal  note   from  Department  of                                                                    
          Natural Resources.                                                                                                    
                                                                                                                                
CSHB 121(RLS)                                                                                                                   
         LOAN FUNDS:CHARTERS/MARICULTURE/MICROLOAN                                                                              
                                                                                                                                
          SCS CSHB  121(FIN) was  REPORTED out  of committee                                                                    
          with a "do pass"  recommendation and with four new                                                                    
          fiscal   impact  notes   by  the   Senate  Finance                                                                    
          Committee   for   the  Department   of   Commerce,                                                                    
          Community and Economic Development.                                                                                   
                                                                                                                                
CSHB 125(L&C)(efd am)                                                                                                           
          ALCOHOLIC BEVERAGE CONTROL BOARD                                                                                      
                                                                                                                                
          SCS CSHB  125(FIN) was  REPORTED out  of committee                                                                    
          with  a  "do  pass"   recommendation  and  with  a                                                                    
          previously published zero  fiscal note: FN4(DCCED)                                                                    
          and  a previously  published  fiscal impact  note:                                                                    
          FN5(DCCED).                                                                                                           
                                                                                                                                
CSHB 264(CRA)                                                                                                                   
         MUNI PROPERTY TAX DEFERRAL: SUBDIVISIONS                                                                               
                                                                                                                                
          SCS CSHB  264(FIN) was  REPORTED out  of committee                                                                    
          with  a  "do  pass"   recommendation  and  with  a                                                                    
          previously    published    zero    fiscal    note:                                                                    
          FN2(DCCED),  and a  new zero  fiscal  note by  the                                                                    
          Senate  Finance Committee  for  the Department  of                                                                    
          Revenue.                                                                                                              
                                                                                                                                
CSHB 279(FIN)                                                                                                                   
          EXTENDING CERTAIN BOARDS & COMMISSIONS                                                                                
                                                                                                                                
          SCS CSHB 279 was REPORTED  out of committee with a                                                                    
          "do  pass"  recommendation   and  with  previously                                                                    
          published   fiscal   impact   notes:   FN4(DCCED),                                                                    
          FN5(DCCED), FN6(DCCED),  FN7(DCCED), FN8(DNR), and                                                                    
          FN9(DPS).                                                                                                             
                                                                                                                                
CSHB 359(FIN)am                                                                                                                 
         SEX CRIMES; TESTIMONY BY VIDEO CONFERENCE                                                                              
                                                                                                                                
          CSHB  359(FIN)am  was  REPORTED out  of  committee                                                                    
          with   a  "do   pass"   recommendation  and   with                                                                    
          previously  published indeterminate  fiscal notes:                                                                    
          FN8(COURT)    and   FN14(DOC),    and   previously                                                                    
          published zero fiscal  notes: FN9(DOA), FN10(DOA),                                                                    
          FN11(DOL), FN12(DPS), FN13(DPS).                                                                                      
                                                                                                                                
CSHB 361(FIN)am                                                                                                                 
          DISPOSALS OF STATE RESOURCES/ROYALTIES                                                                                
                                                                                                                                
          SCS CSHB  361(FIN) was  REPORTED out  of committee                                                                    
          with  a "do  pass" recommendation  and with  a new                                                                    
          zero fiscal  note from  the Department  of Natural                                                                    
          Resources,  and previously  published zero  fiscal                                                                    
          notes: FN1(DFG) and FN2(DOT).                                                                                         
                                                                                                                                
CS FOR HOUSE BILL NO. 121(RLS)                                                                                                
                                                                                                                                
     "An Act  establishing the commercial  charter fisheries                                                                    
     revolving  loan fund,  the  mariculture revolving  loan                                                                    
     fund, and the Alaska  microloan revolving loan fund and                                                                    
     relating  to those  funds and  loans from  those funds;                                                                    
     and providing for an effective date."                                                                                      
                                                                                                                                
9:10:52 AM                                                                                                                    
                                                                                                                                
Senator  Thomas  MOVED  to   ADOPT  the  proposed  committee                                                                    
substitute  for   CSHB  121(RLS),  Work   Draft  27-GH1728\S                                                                    
(Bullard, 4/14/12).                                                                                                             
                                                                                                                                
Co-Chair Stedman OBJECTED for the purpose of discussion.                                                                        
                                                                                                                                
DARWIN PETERSON, STAFF, SENATOR  BERT STEDMAN, explained the                                                                    
changes  in   the  committee  substitute.  He   stated  that                                                                    
Sections 1 to 11 were  new sections that would establish the                                                                    
Community Quota  Entity revolving  loan fund, and  was based                                                                    
on language  from SB 204. He  stated that the intent  of the                                                                    
program was  to assist small coastal  communities throughout                                                                    
Southeast Alaska and  the Gulf of Alaska  to form non-profit                                                                    
community  entities that  may be  eligible  for up  to a  $1                                                                    
million loan from the State  to purchase up to 50,000 pounds                                                                    
of fishing quota  that would be held in  trust for community                                                                    
residents. Currently there were  45 coastal communities that                                                                    
could qualify,  because they meet the  requirements of being                                                                    
off the road system with a  population of 1500 or less and a                                                                    
history  of  fishing.  After   consulting  with  the  Alaska                                                                    
Bankers Associations,  side-bars were placed on  the program                                                                    
to satisfy  some of their concerns.  On page 3, line  14 the                                                                    
interest deferment was reduced from  10 years to 2 years. On                                                                    
page  3,  line  15  the language  expressly  prohibited  the                                                                    
Community Quota  Entity from refinancing their  loan through                                                                    
the  State.  The language  was  also  adjusted to  make  the                                                                    
Community Quota  Entity a pilot  program, that  would sunset                                                                    
in  five years.  The fiscal  note appropriated  $10 million,                                                                    
which was  enough for  ten communities.  In five  years, the                                                                    
legislature could  revisit the  program. If the  program had                                                                    
proven  to be  successful, the  legislature could  decide if                                                                    
the  program should  continue.  In  addition, the  committee                                                                    
substitute placed  an interest  rate floor on  loans offered                                                                    
through the  Commercial Fishing Loan  Fund. The  floor would                                                                    
be  the  prime  rate  plus one  percentage  point,  plus  an                                                                    
additional percentage point determined  by the Department to                                                                    
represent risk.  This would  promote interest  rates offered                                                                    
through  the State's  loan program  that  were more  closely                                                                    
based on market  forces and would discourage  the State from                                                                    
offering  artificially  low   subsidized  rates  that  would                                                                    
compete with the private sector.                                                                                                
                                                                                                                                
Mr. Peterson  stated that Section  12 set up  the Commercial                                                                    
Charter Fisheries  Revolving Loan  Fund. He stated  that the                                                                    
committee substitute  removed the sub-sections  referring to                                                                    
vessels, so loans  could only be used  for purchase permits.                                                                    
Loans  for   fishing  vessels  could  be   accessed  through                                                                    
conventional lenders. He stated that  page 7, lines 13 to 15                                                                    
limited the  loan amount for  a charter halibut permit  to a                                                                    
value  determined by  the Department,  based  on a  12-month                                                                    
rolling average  set quarterly, not  to exceed  $100,000. He                                                                    
explained that the average price  for halibut permits ranged                                                                    
from $29,000 to $61,000.                                                                                                        
                                                                                                                                
Co-Chair  Stedman  REMOVED  his OBJECTION.  There  being  NO                                                                    
FURTHER OBJECTION, Work Draft 27-GH1728\S was ADOPTED.                                                                          
                                                                                                                                
9:15:32 AM                                                                                                                    
                                                                                                                                
Co-Chair  Stedman  explained  that there  was  current  work                                                                    
regarding  HB  121,  and  wondered if  Mr.  Curtis  had  any                                                                    
remarks for the committee.                                                                                                      
                                                                                                                                
CURTIS THAYER, DEPUTY  COMMISSIONER, DEPARTMENT OF COMMERCE,                                                                    
COMMUNITY AND ECONOMIC  DEVELOPMENT, explained the different                                                                    
fishing  revolving loan  funds. He  remarked that  with this                                                                    
particular loan, there  was delayed payment for  up to seven                                                                    
years.                                                                                                                          
                                                                                                                                
Co-Chair Stedman discussed the  fiscal notes in the members'                                                                    
packets.                                                                                                                        
                                                                                                                                
Co-Chair Hoffman  MOVED to report  SCS CSHB 121(FIN)  out of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes. There  being NO OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
SCS CSHB 121(FIN)  was REPORTED out of committee  with a "do                                                                    
pass" recommendation  and with four new  fiscal impact notes                                                                    
from  the Senate  Finance Committee  for  the Department  of                                                                    
Commerce, Community and Economic Development.                                                                                   
                                                                                                                                
CS FOR HOUSE BILL NO. 279(FIN)                                                                                                
                                                                                                                                
     "An Act  extending the termination  dates of  the Board                                                                    
     of Nursing,  the Board of  Dental Examiners,  the Board                                                                    
     of Barbers  and Hairdressers,  the Big  Game Commercial                                                                    
     Services Board,  the Alcoholic Beverage  Control Board,                                                                    
     and the  Alaska Seismic Hazards Safety  Commission; and                                                                    
     providing for an effective date."                                                                                          
                                                                                                                                
9:19:02 AM                                                                                                                    
                                                                                                                                
Co-Chair  Stedman  discussed the  six  fiscal  notes in  the                                                                    
members' packets.                                                                                                               
                                                                                                                                
JULI    LUCKY,    STAFF,   REPRESENTATIVE    MIKE    HAWKER,                                                                    
expressed that the bill sponsor  addressed their concerns at                                                                    
a  previous  meeting.  She  stated  that  the  bill  sponsor                                                                    
preferred  to  keep  the board  extensions  clean  from  the                                                                    
policy calls, but did not  comment what specific policy call                                                                    
the committee would be making.                                                                                                  
                                                                                                                                
Co-Chair  Hoffman  MOVED  to  report SCS  CSHB  279  out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes. There  being NO OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
SCS CSHB 279 was REPORTED out  of committee with a "do pass"                                                                    
recommendation and  with previously published  fiscal impact                                                                    
notes:   FN4(DCCED),  FN5(DCCED),   FN6(DCCED),  FN7(DCCED),                                                                    
FN8(DNR), and FN9(DPS).                                                                                                         
                                                                                                                                
CS FOR HOUSE BILL NO. 359(FIN) am                                                                                             
                                                                                                                                
     "An  Act   relating  to  conspiracy  to   commit  human                                                                    
     trafficking in  the first degree or  sex trafficking in                                                                    
     the   first   degree;   relating  to   the   crime   of                                                                    
     distribution of indecent material  to minors, the crime                                                                    
     of  online   enticement  of  a  minor,   the  crime  of                                                                    
     prostitution,  and   the  crime  of   sex  trafficking;                                                                    
     relating   to   forfeiture    of   property   used   in                                                                    
     prostitution offenses;  relating to testimony  by video                                                                    
     conference; adding Rule 38.3,  Alaska Rules of Criminal                                                                    
     Procedure; and providing for an effective date."                                                                           
                                                                                                                                
9:21:21 AM                                                                                                                    
                                                                                                                                
ANNIE  CARPENETI, DEPARTMENT  OF LAW,  stated that  the bill                                                                    
addressed  sex   trafficking.  More   than  half   the  bill                                                                    
addressed a change  in the title of a  crime from "promoting                                                                    
prostitution  in  the  first,   second,  third,  and  fourth                                                                    
degrees" to "sex trafficking" in  those degrees. The reasons                                                                    
for  the  change  in  title   were:  1)  Communication.  Law                                                                    
enforcement,  almost uniformly,  describes  this conduct  as                                                                    
sex trafficking, rather  than "promoting prostitution." This                                                                    
communication  has led  to some  misunderstandings over  the                                                                    
last  several  years.  2)  It   is  considered  to  be  more                                                                    
respectful  to  victims of  these  crimes  to be  considered                                                                    
victims  of  sex trafficking,  rather  than  people who  are                                                                    
being promoted  as prostitutes.  The pages  of the  bill are                                                                    
conforming,  throughout the  statutes, to  the name  change.                                                                    
The  bill also  adds two  crimes to  the state's  conspiracy                                                                    
law: 1)  Human trafficking in  the first degree, which  is a                                                                    
class-A felony; and 2) Sex  trafficking in the first degree,                                                                    
which is either a class-A  felony, if you are trafficking an                                                                    
adult; or an  unclassified felony, if you  are trafficking a                                                                    
child. The bill  raised the penalty for being a  patron of a                                                                    
prostitute  who is  under 18  years of  age, from  a class-B                                                                    
misdemeanor to a  class-C felony, if the patron  is over 18-                                                                    
years-old  and  is  at  least three  years  older  than  the                                                                    
victim. The  bill also addressed  the crime  of distribution                                                                    
of  indecent  material to  minors.  The  bill tightened  the                                                                    
elements of the  crime to require the  State, in prosecuting                                                                    
the  person  for this  offence,  to  prove that  the  person                                                                    
intentionally distributed the material  or possessed it with                                                                    
intent to distribute.  The bill did not make  any changes in                                                                    
the elements of the offenses,  with one exception: the House                                                                    
Finance Committee changed  the age of the  victim from under                                                                    
18  years of  age to  less than  20 years  of age,  for that                                                                    
crime to be considered  an unclassified felony. The rational                                                                    
for that  change was that  18 to 19  year old people  may be                                                                    
considered adults  in some ways,  but were  still vulnerable                                                                    
to victimization by older people.                                                                                               
                                                                                                                                
Co-Chair Stedman discussed the  fiscal notes in the members'                                                                    
packets.                                                                                                                        
                                                                                                                                
Co-Chair  Hoffman MOVED  to report  CSHB  359(FIN)am out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes. There  being NO OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
CSHB 359(FIN)am  was REPORTED  out of  committee with  a "do                                                                    
pass"   recommendation   and   with   previously   published                                                                    
indeterminate  fiscal notes:  FN8(COURT) and  FN14(DOC), and                                                                    
previously   published   zero    fiscal   notes:   FN9(DOA),                                                                    
FN10(DOA), FN11(DOL), FN12(DPS), FN13(DPS).                                                                                     
                                                                                                                                
CS FOR HOUSE BILL NO. 361(FIN) am                                                                                             
                                                                                                                                
     "An  Act relating  to the  Alaska  Land Act,  including                                                                    
     certain  leases, sales,  and other  disposals of  state                                                                    
     land  and materials;  relating to  production royalties                                                                    
    from miners; and providing for an effective date."                                                                          
                                                                                                                                
9:26:02 AM                                                                                                                    
                                                                                                                                
Co-Chair  Hoffman  MOVED  to ADOPT  the  proposed  committee                                                                    
substitute  for  CSHB  361(FIN)am,  Work  Draft  27-GH2717\E                                                                    
(Bailey, 4/15/12).                                                                                                              
                                                                                                                                
Co-Chair Stedman OBJECTED for the purpose of discussion.                                                                        
                                                                                                                                
Senator  Egan explained  the changes  in  the new  committee                                                                    
substitute. The bill  had an added phrase in  the title that                                                                    
adds Section  26: conveying  a partial of  land. The  end of                                                                    
Section  7,  page  4,  line  1 matched  a  change  that  the                                                                    
Resource  Committee made  to the  Senate version,  requiring                                                                    
public notice  of renewal decisions  for state  land leases.                                                                    
The last  change was  on page  17, which  added a  parcel of                                                                    
land to the City and Borough  of Juneau. He remarked that he                                                                    
had  worked  for  over two  years  regarding  land  transfer                                                                    
issues.                                                                                                                         
                                                                                                                                
Co-Chair  Stedman  REMOVED  his OBJECTION.  There  being  NO                                                                    
FURTHER OBJECTION, Work Draft 27-GH2717\E was ADOPTED.                                                                          
                                                                                                                                
ED  FOGELS,  DEPUTY   COMMISSIONER,  DEPARTMENT  OF  NATURAL                                                                    
RESOURCES,  stated  that  the  bill  was  a  result  of  the                                                                    
legislature  and governor's  request for  the Department  of                                                                    
Natural Resources  (DNR) to examine the  permitting systems,                                                                    
to reduce the  backlog, and to reduce the time  and cost for                                                                    
applicants.  A bottom-up  review  of the  statutes had  been                                                                    
conducted over the  year prior, and this bill  was the first                                                                    
batch in improving the permitting  process. He felt that the                                                                    
changes  would  enable  DNR  to  process  applications  more                                                                    
quickly, and  reduce time  and cost  for the  applicant. The                                                                    
bill would  improve the land  leasing process by  giving DNR                                                                    
more  flexibility in  issuing negotiated  leases instead  of                                                                    
competitive   leases.  The   bill  would   allow  DNR   more                                                                    
flexibility in  renewing leases.  He stressed that  the bill                                                                    
was only for  land leases, not oil and gas  leases. The bill                                                                    
would  make the  material sale  process more  efficient, and                                                                    
allow the State to sell  materials at below market value for                                                                    
public purposes. The bill would  allow DNR to use sealed-bid                                                                    
and  public outcry  auctions for  increased efficiency.  The                                                                    
bill  would  modernize  the public  notice  requirements  by                                                                    
emphasizing online  public noticing.  The bill  would reduce                                                                    
paperwork by  allowing a  miner to  choose either  fiscal or                                                                    
calendar years  to match their  tax filings. The  bill would                                                                    
allow  DNR to  renew off-shore  mining leases  for up  to 20                                                                    
years.                                                                                                                          
                                                                                                                                
Co-Chair Stedman discussed the  fiscal notes in members' the                                                                    
packets.                                                                                                                        
                                                                                                                                
Co-Chair Hoffman  MOVED to report  SCS CSHB 361(FIN)  out of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes. There  being NO OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
SCS CSHB 361(FIN)  was REPORTED out of committee  with a "do                                                                    
pass" recommendation  and with a  new zero fiscal  note from                                                                    
the   Department  of   Natural  Resources,   and  previously                                                                    
published zero fiscal notes: FN1(DFG) and FN2(DOT).                                                                             
                                                                                                                                
                                                                                                                                
CS FOR HOUSE BILL NO. 264(CRA)                                                                                                
                                                                                                                                
     "An  Act  allowing  a deferral  of  municipal  property                                                                    
     taxes on  the increase  in the  value of  real property                                                                    
     attributable  to  subdivision  of  that  property;  and                                                                    
     providing for an effective date."                                                                                          
                                                                                                                                
9:31:14 AM                                                                                                                    
                                                                                                                                
Co-Chair  Hoffman  MOVED  to ADOPT  the  proposed  committee                                                                    
substitute  for   CSHB  264(CRA),  Work   Draft  27-LS1090\X                                                                    
(Bullard, 4/14/12).                                                                                                             
                                                                                                                                
Mr. Peterson  stated that Sections  1 to 3 of  the committee                                                                    
substitute  would  exclude  the   value  of  the  lease-hold                                                                    
interest on  the properties for  the purpose  of determining                                                                    
the  full  and  true  value  by the  state,  only  if  local                                                                    
government chooses to exempt that property from taxation.                                                                       
                                                                                                                                
Co-Chair  Stedman  REMOVED  his OBJECTION.  There  being  NO                                                                    
FURTHER OBJECTION, Work Draft 27-LS1090\X was ADOPTED.                                                                          
                                                                                                                                
9:32:19 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:33:22 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
CHRISTOPHER  CLARK,   STAFF,  REPRESENTATIVE   CATHY  MUNOZ,                                                                    
looked at  Sections 1  and 4, and  stated that  the property                                                                    
deferral   was   an   option  allowed   to   municipalities.                                                                    
Municipalities could defer any  tax increase associated with                                                                    
subdivided  property. The  intent was  to encourage  housing                                                                    
development.  You could  defer the  tax increase  for up  to                                                                    
five years, and the deferral would  end as soon as a lot was                                                                    
sold or a  new home or commercial building was  built on the                                                                    
lot.  He  stated  that  Sections  5 and  6  related  to  the                                                                    
municipal tax cap.                                                                                                              
                                                                                                                                
9:35:15 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman discussed the  fiscal notes in the members'                                                                    
packets.                                                                                                                        
                                                                                                                                
JOHANNA BALES, DEPUTY DIRECTOR,  TAX DIVISION, DEPARTMENT OF                                                                    
REVENUE  (via teleconference),  testified  the  DOR and  the                                                                    
governor were  against Sections 5  and 6 of the  bill. Those                                                                    
Sections  removed   the  municipal  tax  cap   on  petroleum                                                                    
property   and   other    property   within   municipality's                                                                    
jurisdiction.                                                                                                                   
                                                                                                                                
RANDY HOFFBECK,  CHIEF OF STAFF, NORTH  SLOPE BOROUGH, spoke                                                                    
to Sections 5 and 6 of the  bill. He stated that the tax cap                                                                    
did not  limit the total amount  of money in tax  that could                                                                    
be  collected  by a  municipality,  but  parse it  into  two                                                                    
sections:  operation and  debt. The  provision would  remove                                                                    
the  225  percent cap,  and  allow  the municipalities  more                                                                    
flexibility to  use the money  in the most  efficient manner                                                                    
possible. Currently,  in order to  collect a portion  of the                                                                    
debt, the North  Slope Borough had to cycle  money through a                                                                    
bond market by selling general obligation debt.                                                                                 
                                                                                                                                
Senator  Olson pointed  out that  he had  a letter  from the                                                                    
mayor of Juneau that expressed support of the legislation.                                                                      
                                                                                                                                
Senator  Olson MOVED  to  report SCS  CSHB  264(FIN) out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes. There  being NO OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
SCS CSHB 264(FIN)  was REPORTED out of committee  with a "do                                                                    
pass" recommendation  and with  a previously  published zero                                                                    
fiscal note: FN2(DCCED),  and a new zero fiscal  note by the                                                                    
Senate Finance Committee for the Department of Revenue.                                                                         
                                                                                                                                
CS FOR HOUSE BILL NO. 89(RES)                                                                                                 
                                                                                                                                
     "An Act relating to the disposal of certain bed load                                                                       
     material in conjunction with a flood mitigation plan."                                                                     
                                                                                                                                
9:43:35 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  PAUL SEATON,  stated  that  HB 89  addressed                                                                    
flooding,  and numerous  emergency  declarations that  occur                                                                    
almost  annually.  Much  of the  flooding  occurred  because                                                                    
gravel  builds  up  in  riverbeds,  and  then  the  flooding                                                                    
damaged  commercial  or  private property.  The  bill  would                                                                    
allow DNR to  consider the mitigation of  those disasters as                                                                    
part of  the fair  market value. Currently,  DNR had  to get                                                                    
the  fair market  value  of  the sand  and  gravel that  was                                                                    
removed under-navigable  rivers. The problem was  that there                                                                    
was  an  up-front  fee  of  up  to  $5  a  yard,  which  was                                                                    
uneconomical for removal.  The bill would allow  DNR to take                                                                    
a net profit  of a minimum of 12.5 percent  of the extracted                                                                    
value,  instead of  a gross  value at  extraction. It  would                                                                    
allow  operators to  remove the  gravel and  save the  State                                                                    
money at the same time.                                                                                                         
                                                                                                                                
Co-Chair Stedman discussed the fiscal note in the packet.                                                                       
                                                                                                                                
Co-Chair  Hoffman  MOVED  to  report  CSHB  89(RES)  out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes. There  being NO OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
Co-Chair Stedman discussed the fiscal note in the packet.                                                                       
                                                                                                                                
CSHB 89(RES) was REPORTED out  of committee with a "do pass"                                                                    
recommendation  and with  a  new  indeterminate fiscal  note                                                                    
from the Department of  Transportation and Public Facilities                                                                    
and  new  indeterminate  fiscal   note  from  Department  of                                                                    
Natural Resources.                                                                                                              
                                                                                                                                
CS FOR HOUSE BILL NO. 125(L&C)(efd am)                                                                                        
                                                                                                                                
     "An Act moving the  Alcoholic Beverage Control Board to                                                                    
     the  Department of  Commerce,  Community, and  Economic                                                                    
     Development and relating to  duties of that department;                                                                    
     relating  to  the  exercise  of  peace  officer  powers                                                                    
     granted by  the Alcoholic  Beverage Control  Board; and                                                                    
     providing for an effective date."                                                                                          
                                                                                                                                
9:46:46 AM                                                                                                                    
                                                                                                                                
JULI LUCKY,  STAFF, REPRESENTATIVE MIKE HAWKER,  stated that                                                                    
the legislation  would move  the Alcoholic  Beverage Control                                                                    
Board (ABC)  from DOT/PF to  DCCED. She stated that  the ABC                                                                    
Board took on  the character of an umbrella  agency. The ABC                                                                    
Board felt  that they were treated  more toward enforcement,                                                                    
rather   than  a   collaborative   relationship  to   ensure                                                                    
compliance with  a licensure.  The goal  was to  balance the                                                                    
rigorous enforcement  of the  statutes with  a collaborative                                                                    
effort to  achieve licensure compliance, and  there would be                                                                    
no change to the enforcement process.                                                                                           
                                                                                                                                
Co-Chair  Hoffman  MOVED  to ADOPT  Amendment  for  HB  125,                                                                    
B.A.1.                                                                                                                          
                                                                                                                                
Co-Chair Stedman OBJECTED for the purpose of discussion.                                                                        
                                                                                                                                
Ms. Lucky  explained that  there was  an amendment  from the                                                                    
House of  Representatives, regarding whether or  not the ABC                                                                    
Board or its  employees could ask private  club's members to                                                                    
provide a key card. The  amendment that was adopted was that                                                                    
the ABC  Board could  not require a  private club  member to                                                                    
hold  an  access device.  The  way  that the  amendment  was                                                                    
written seemed to  prohibit keys to get into a  door, so the                                                                    
proposed  amendment was  more of  a  technical amendment  to                                                                    
ensure the previously adopted amendment  work the way it was                                                                    
intended.                                                                                                                       
                                                                                                                                
Co-Chair  Stedman  REMOVED  his OBJECTION.  There  being  NO                                                                    
FURTHER OBJECTION, Amendment B.A.1 was ADOPTED.                                                                                 
                                                                                                                                
Co-Chair Stedman discussed the  fiscal notes in the members'                                                                    
packets.                                                                                                                        
                                                                                                                                
9:50:00 AM                                                                                                                    
                                                                                                                                
MATT  FELIX,  ALASKA   ADDICTION  PROFESSIONAL  ASSOCIATION,                                                                    
testified against  the legislation  and stated that  the ABC                                                                    
Board  was recently  moved  to  the DPS  at  a request  from                                                                    
former  Representative Lisa  Murkowski. He  felt that  there                                                                    
needed to be decent enforcement  of alcohol, and stated that                                                                    
the move would "dumb down" the ABC Board.                                                                                       
                                                                                                                                
9:51:38 AM                                                                                                                    
                                                                                                                                
JAN  WRENTMORE,  OWNER,  RED   ONION  SALOON,  testified  in                                                                    
support of the bill.                                                                                                            
                                                                                                                                
9:52:02 AM                                                                                                                    
                                                                                                                                
BOB  COGHILL, SELF,  testified against  the bill  and shared                                                                    
that the  ABC board would  be more effective  working within                                                                    
DPS.                                                                                                                            
                                                                                                                                
9:53:12 AM                                                                                                                    
                                                                                                                                
ELLEN  GANLEY,  PUBLIC  MEMBER, ABC  BOARD,  FAIRBANKS  (via                                                                    
teleconference), testified against the  bill and stated that                                                                    
the role of the ABC Board was enforcement.                                                                                      
                                                                                                                                
9:53:51 AM                                                                                                                    
                                                                                                                                
KATE  BURKHART,   EXECUTIVE  DIRECTOR,  ADVISORY   BOARD  ON                                                                    
ALCOHOLISM  AND DRUG  ABUSE (via  teleconference), expressed                                                                    
the  board's strong  opposition to  legislation and  related                                                                    
that the bill was bad policy.                                                                                                   
                                                                                                                                
9:54:36 AM                                                                                                                    
                                                                                                                                
CHRYSTAL  SCHOENROCK,  SELF, NIKISKI  (via  teleconference),                                                                    
testified in  support the bill  and felt that the  DCCED was                                                                    
better equipped to deal with licensing issues.                                                                                  
                                                                                                                                
9:55:27 AM                                                                                                                    
                                                                                                                                
JEFF JESSEE,  CHIEF EXECUTIVE OFFICER, ALASKA  MENTAL HEALTH                                                                    
TRUST AUTHORITY,  ANCHORAGE (via  teleconference), expressed                                                                    
strong  opposition to  the  bill. He  related  that the  ABC                                                                    
Board should be housed in the DPS.                                                                                              
                                                                                                                                
9:57:21 AM                                                                                                                    
                                                                                                                                
ELAINE VROMAN,  MEETING THE CHALLENGE,  ANCHORAGE, testified                                                                    
in opposition to the bill.                                                                                                      
                                                                                                                                
Senator Ellis expressed that he  would have preferred a more                                                                    
robust  committee  effort  on  the  bill,  and  more  public                                                                    
hearing of the pros and cons of the bill.                                                                                       
                                                                                                                                
Co-Chair Hoffman  MOVED to report  SCS CSHB 125(FIN)  out of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes. There  being NO OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
SCS CSHB 125(FIN)  was REPORTED out of committee  with a "do                                                                    
pass" recommendation  and with  a previously  published zero                                                                    
fiscal note:  FN4(DCCED) and  a previously  published fiscal                                                                    
impact note: FN5(DCCED).                                                                                                        
                                                                                                                                
9:58:49 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
11:51:11 PM                                                                                                                   
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
                                                                                                                                
The meeting was adjourned at 11:52 PM.                                                                                          
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects
HB 121 Backup Documents 041512.pdf SFIN 4/15/2012 9:00:00 AM
HB 121
HB 121 version S.pdf SFIN 4/15/2012 9:00:00 AM
HB 121
HB 264 version X.pdf SFIN 4/15/2012 9:00:00 AM
HB 264
HB 361 version E.pdf SFIN 4/15/2012 9:00:00 AM
HB 361
HB 279 version E.pdf SFIN 4/15/2012 9:00:00 AM
HB 279
HB 125 Amendment 1 Stedman 041512.pdf SFIN 4/15/2012 9:00:00 AM
HB 125