Legislature(2015 - 2016)

04/08/2016 03:42 PM Senate FIN

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                 SENATE FINANCE COMMITTEE                                                                                       
                       April 8, 2016                                                                                            
                         3:42 p.m.                                                                                              
3:42:13 PM                                                                                                                    
CALL TO ORDER                                                                                                                 
Co-Chair MacKinnon called the Senate Finance Committee                                                                          
meeting to order at 3:42 p.m.                                                                                                   
MEMBERS PRESENT                                                                                                               
Senator Anna MacKinnon, Co-Chair                                                                                                
Senator Pete Kelly, Co-Chair                                                                                                    
Senator Peter Micciche, Vice-Chair                                                                                              
Senator Click Bishop                                                                                                            
Senator Mike Dunleavy                                                                                                           
Senator Lyman Hoffman                                                                                                           
MEMBERS ABSENT                                                                                                                
Senator Donny Olson                                                                                                             
ALSO PRESENT                                                                                                                  
Mike Smith, Staff, Senator Click Bishop; Tim Grussendorf,                                                                       
Staff, Senator Lyman Hoffman.                                                                                                   
PRESENT VIA TELECONFERENCE                                                                                                    
Ben Ellis, Director, Alaska State Parks, Anchorage.                                                                             
SB 101    STATE PARKS FEES & SALES OF MERCHANDISE                                                                               
          SB 101 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
SB 196    POWER COST EQ FUND: RESERVE ACCT; DIVIDEND                                                                            
          SB 196 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
SENATE BILL NO. 101                                                                                                           
     "An Act relating to fees for use of state park system                                                                      
     facilities; and relating to the sale of merchandise by                                                                     
     the Department of Natural Resources."                                                                                      
3:43:59 PM                                                                                                                    
Senator Bishop MOVED to ADOPT Amendment 1, 29-GS1040\H.1,                                                                       
Bullard, 3/24/16 (copy on file):                                                                                                
     Page 1, line 1, following "to":                                                                                            
          Insert  "merchandise sold  and' Page  1, following                                                                    
          line  3, insert  a new  bill section  to read:  "i                                                                    
          Section  1.  AS  37.05.146(b)(56)  is  amended  to                                                                    
          read: (56) fees and  other char2es received by the                                                                    
          Department of Natural  Resources under AS 4121.026                                                                    
          [FOR THE USE OF STATE PARK SYSTEM FACILITIES];"                                                                       
     Page 1, line 4:                                                                                                            
          Delete "Section 1"                                                                                                    
          Insert "Sec. 2"                                                                                                       
     Renumber the following bill section accordingly.                                                                           
     Page 2, lines 3 -10:                                                                                                       
          Delete all material and insert:                                                                                       
          "(10) [SALE OF MERCHANDISE FOR INFORMATIONAL OR                                                                       
          EDUCATIONAL  PURPOSES RELATED  TO  PUBLIC USE  and                                                                    
          UNDERSTANDING  OF  PARKS, INCLUDING  MAPS,  PLANS,                                                                    
          AND OTHER GRAPHIC MATERIALS;                                                                                          
          (11)]  use  of  a   developed  facility  that  has                                                                    
          developed    parking   [(12)]    presentation   or                                                                    
          attendance  at  programs  related  to  natural  or                                                                    
          cultural history, outdoor  skills or education, or                                                                    
          other   topics   concerned    with   public   use,                                                                    
          enjoyment, or understanding of parks."                                                                                
     Page 2, following line 10:                                                                                                 
          Insert new bill sections to read:                                                                                     
     "h Sec. 3. AS 37.10.050(a) is amended to read:                                                                             
          (a) A  state agency may  not charge a fee  for the                                                                    
          provision of state services unless  the fee (1) is                                                                    
          set or  otherwise authorized  by statute;  and (2)                                                                    
          where  a regulation  is necessary,  is  set by  or                                                                    
          provided  for  in  a  regulation  that  meets  the                                                                    
          standards  of AS  44.62.020 and  44.62.030. Unless                                                                    
          specifically exempted  by statute, a  state agency                                                                    
          authorized to  collect or receive  fees, licenses,                                                                    
          taxes,  or  other  money belonging  to  the  state                                                                    
          shall  account for  and remit  the receipts,  less                                                                    
          fees  to  which  the   collector  is  entitled  by                                                                    
          statute  or  regulation,   to  the  Department  of                                                                    
          Revenue   at   least    once   each   month,   The                                                                    
          commissioner  of  administration shall  separately                                                                    
          account under AS  37.05.142 for receipts deposited                                                                    
          under this subsection. A fee  or other charge that                                                                    
          is set by regulation  may not exceed the estimated                                                                    
          actual costs of the  state agency in administering                                                                    
          the  activity  or  providing  the  service  unless                                                                    
          otherwise provided by the  statute under which the                                                                    
          regulation  is adopted;  however, this  limitation                                                                    
          does not apply  to sale or lease of  property by a                                                                    
          state agency,  fees charged  by a  resource agency                                                                    
          for a designated regulatory  service as defined in                                                                    
          AS 37.10.058,  fees adopted  by the  Department of                                                                    
          Natural   Resources  under   AS  41.21.026(f)   AS                                                                    
          44.37.025, and  [OR] 44.3  7.027, or  fees, rents,                                                                    
          tolls, and other charges  established or levied by                                                                    
          the  Department   of  Transportation   and  Public                                                                    
          Facilities for the use of  the Knik Arm bridge and                                                                    
          appurtenant facilities.                                                                                               
     Sec. 4. AS 41.21.026 is amended by adding a new                                                                            
     subsection to read:                                                                                                        
          (0 In  addition to  the activities,  services, and                                                                    
          products for  which the  department may  charge or                                                                    
          collect  a  fee under  (a)  of  this section,  the                                                                    
          department  may  sell informational,  educational,                                                                    
          or promotional  merchandise. The  department shall                                                                    
          price  merchandise sold  under this  section in  a                                                                    
          manner that  ensures a reasonable  monetary return                                                                    
          to  the  state.  To the  extent  practicable,  the                                                                    
          department  shall sell  only merchandise  produced                                                                    
          or manufactured in the United States)'                                                                                
Co-Chair MacKinnon OBJECTED for DISCUSSION.                                                                                     
Senator  Bishop  explained  the amendment.  He  shared  that                                                                    
there was discussion about inserting  language that had been                                                                    
removed in  the Senate  Resources Committee,  which lessened                                                                    
the  Department of  Natural  Resources  (DNR) dependence  on                                                                    
unrestricted general  fund (UGF) dollars. He  shared that in                                                                    
2015, DOR  collected 3.5 million in  UGF funds. Furthermore,                                                                    
DOR  brought  in  $3.36  million  in  program  receipts.  He                                                                    
remarked  that there  was an  intention for  DNR to  sell to                                                                    
retailers.   He  stressed   that   Alaska   was  a   tourism                                                                    
destination,  and   Alaska  tourism  was   promoted  through                                                                    
funding  from the  tourism marketing  industry. He  stressed                                                                    
that promoting  Alaska as a destination  while closing state                                                                    
parks was  detrimental to the tourism  industry. He remarked                                                                    
that the amendment would only  allow DNR to sell merchandise                                                                    
in  park   offices,  ferry   terminals,  and   wholesale  to                                                                    
retailers. The  amendment did  not authorize  DNR to  open a                                                                    
retail  store, rather  only the  ability  to offer  products                                                                    
wholesale to retailers. It was  not the intent for the state                                                                    
to compete  against any private  industry, but  rather allow                                                                    
DNR  the  opportunity  to recoup  some  of  its  operational                                                                    
3:46:53 PM                                                                                                                    
MIKE  SMITH,  STAFF,  SENATOR  CLICK  BISHOP,  detailed  the                                                                    
amendment.  He  shared  that  the  original  bill  contained                                                                    
prohibitions. The  original bill stated that  DNR could only                                                                    
merchandise  the product  inside  the  park boundaries.  The                                                                    
current  bill did  not contain  that restriction.  He shared                                                                    
that there was an examination  of the opportunity for DNR to                                                                    
raise additional  revenues by selling of  merchandise, there                                                                    
were other  restrictions. He shared that  the state agencies                                                                    
had  a  general  restriction against  selling  products  for                                                                    
profit. Generally, the state agencies  were supposed to sell                                                                    
the  merchandise  to individuals  for  cost  and had  little                                                                    
ability to generate operating revenue.  The bill would allow                                                                    
DNR  to charge  a reasonable  amount of  monetary gain,  but                                                                    
would only  allow the sale  within the confines of  the park                                                                    
services  offices, ferry  terminals,  and  for wholesale  to                                                                    
retail  entities. He  remarked that  the conforming  changes                                                                    
were  drafted to  conform to  existing  statutes. He  stated                                                                    
that the primary change allowed  for DNR to sell merchandise                                                                    
for profit.                                                                                                                     
Co-Chair MacKinnon queried comments on the amendment.                                                                           
3:48:57 PM                                                                                                                    
BEN  ELLIS, DIRECTOR,  ALASKA  STATE  PARKS, ANCHORAGE  (via                                                                    
teleconference), testified in support of the amendment.                                                                         
Vice-Chair   Micciche  wondered   if   there   would  be   a                                                                    
consideration of an amendment to the amendment.                                                                                 
3:49:37 PM                                                                                                                    
AT EASE                                                                                                                         
3:51:44 PM                                                                                                                    
3:51:50 PM                                                                                                                    
Vice-Chair Micciche  MOVED to  ADOPT conceptual  amendment 1                                                                    
to Amendment 1:                                                                                                                 
     Page 3, line 1, following "United States":                                                                                 
          Insert  "procurement and  branding services,  such                                                                    
          as  printing screen-printing,  must occur  through                                                                    
          an    Alaska-owned   business    or   correctional                                                                    
          institution whenever competitively possible."                                                                         
Senator Dunleavy OBJECTED for DISCUSSION.                                                                                       
Co-Chair MacKinnon  wondered if there should  be an adoption                                                                    
of  the conceptual  amendment,  and  then Legislative  Legal                                                                    
would determine its legality within the legislation.                                                                            
Senator  Dunleavy WITHDREW  the  OBJECTION.  There being  NO                                                                    
OBJECTION,  it   was  so  ordered.  The   amendment  to  the                                                                    
conceptual amendment to Amendment 1 was adopted.                                                                                
Co-Chair MacKinnon  WITHDREW the  OBJECTION. There  being NO                                                                    
OBJECTION, Amendment 1, as amended, was adopted.                                                                                
SB  101  was  HEARD  and   HELD  in  committee  for  further                                                                    
SENATE BILL NO. 196                                                                                                           
     "An Act relating to the use of certain unexpended                                                                          
     earnings from the power cost equalization endowment                                                                        
3:53:30 PM                                                                                                                    
Vice-Chair Micciche MOVED to  ADOPT the committee substitute                                                                    
for SB 196, Work Draft 29-LS1383\F (Nauman, 4/8/16).                                                                            
Co-Chair MacKinnon OBJECTED for DISCUSSION.                                                                                     
TIM  GRUSSENDORF, STAFF,  SENATOR  LYMAN HOFFMAN,  explained                                                                    
the committee  substitute. He looked  at Section 1,  line 8,                                                                    
added the word,  "and." He furthered that  the second change                                                                    
added  the  language, "the  earnings  of  the fund  for  the                                                                    
previous year." That language was  added so the commissioner                                                                    
would  calculate on  the earnings,  rather than  the monthly                                                                    
average of  the previous three  fiscal years. He  noted that                                                                    
the Legislative  Finance Division (LFD) and  the Legislative                                                                    
Legal  had different  language preferences.  He shared  that                                                                    
LFD  preferred the  phrase, "closed  fiscal  year", so  they                                                                    
could know the  exact amount. He looked at  Section 2, which                                                                    
changed  "seven" to  "five", which  was  the maximum  amount                                                                    
that could  be used for  purpose of power  cost equalization                                                                    
(PCE). He  stated that the  change lined up with  the change                                                                    
to  the investment  target of  4  percent average  over a  5                                                                    
percent per  year period. He  stated that LFD  preferred the                                                                    
phrase "up  to five" rather  than "five." He  encouraged the                                                                    
committee   to    evaluate   that   difference    in   their                                                                    
consideration of  the bill. He  stated that Section 3  was a                                                                    
new  section, which  stated that  if the  5 percent  was not                                                                    
enough  to pay  for the  PCE  program, the  amount would  be                                                                    
prorated. He  remarked that the  last section  addressed how                                                                    
the earnings  were split for  the previous fiscal  year, and                                                                    
whether there  was anything above  the cost of  the program.                                                                    
He shared that  there was previously a dividend  going to GF                                                                    
of 60  percent. He stated  that the dividend was  changed to                                                                    
50 percent.  The 50 percent  would be assigned  to community                                                                    
revenue  sharing. He  shared that  there was  an issue  with                                                                    
sending money  from the PCE fund  to GF was changing  DGF to                                                                    
UGF. The  CS changed DGF  to DGF, because it  was designated                                                                    
for community revenue sharing. He  stressed that the savings                                                                    
of  GF would  be the  money that  the legislature  could use                                                                    
from the program.                                                                                                               
Co-Chair MacKinnon  WITHDREW the  OBJECTION. There  being NO                                                                    
OBJECTION, the proposed committee substitute was adopted.                                                                       
Co-Chair MacKinnon noted that the public hearing had                                                                            
already occurred. She shared that she would like LFD to                                                                         
analyze the new language in the CS.                                                                                             
SB 196 was HEARD and HELD in committee for further                                                                              
3:58:07 PM                                                                                                                    
AT EASE                                                                                                                         
3:58:14 PM                                                                                                                    
Co-Chair MacKinnon discussed the schedule.                                                                                      
3:58:29 PM                                                                                                                    
AT EASE                                                                                                                         
3:59:28 PM                                                                                                                    
Co-Chair MacKinnon stated that there would be no continuing                                                                     
pursuit of SB 208.                                                                                                              
4:00:12 PM                                                                                                                    
The meeting was adjourned at 4:00 p.m.                                                                                          

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