Legislature(1993 - 1994)
03/10/1994 01:45 PM L&C
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE LABOR AND COMMERCE COMMITTEE March 10, 1994 1:45 P.M. MEMBERS PRESENT Senator Tim Kelly, Chairman Senator Steve Rieger, Vice Chairman Senator Bert Sharp Senator Georgianna Lincoln Senator Judith Salo MEMBERS ABSENT None COMMITTEE CALENDAR HOUSE BILL NO. 327 "An Act extending the termination date of the Board of Veterinary Examiners; and providing for an effective date." SENATE BILL NO. 227 "An Act relating to terminal rental adjustment clauses for motor vehicles and trailers." SENATE BILL NO. 341 "An Act extending the termination date of the Alaska Tourism Marketing Council; and providing for an effective date." SENATE BILL NO. 213 "An Act extending the Alaska Public Utilities Commission and the regulatory cost charge." SB 340 (DAMAGES & ATTY FEES FOR UNPAID WAGES) WAS SCHEDULED, BUT NOT HEARD THIS DATE. PREVIOUS ACTION SB 327 - No previous action to record. SB 227 - See State Affairs minutes dated 2/16/94. SB 341 - No previous action to record. SB 213 - See Labor & Commerce minutes dated 9/28/93, 2/8/94, and 2/24/94. WITNESS REGISTER Carol Carrol, Legislative Aide c/o Senator Kerttula State Capitol Juneau, Ak. 99801-1182 POSITION STATEMENT: Sponsor of SB 227. Josh Fink, Legislative Aide c/o Senator Kelly State Capitol Juneau, Ak. 99801-1182 POSITION STATEMENT: Commented on SB 213. Bob Lohr, Executive Director Alaska Public Utilities Commission 1016 W 6th Ave., # 400 Anchorage, Ak. 99501 POSITION STATEMENT: Commented on SB 213. Don Schroer Alaska Public Utilities Commission 1016 W. 6th Ave., # 400 Anchorage, Ak. 99501 POSITION STATEMENT: Commented on SB 213. Dave Hutchins, Executive Director Alaska Rural Energy Cooperative Association POSITION STATEMENT: Commented on SB 213. Dennis Geary Alaska Public Employees Association 1689 C Street, # 204 Anchorage, Ak. 99501 POSITION STATEMENT: Commented on SB 213. Jim Rowe Alaska Telephone Association (ATA) 4341 B St., #304 Anchorage, Ak. 99503 POSITION STATEMENT: Commented on SB 213. ACTION NARRATIVE TAPE 94-15, SIDE A Number 001 CHAIRMAN KELLY called the Labor and Commerce Committee meeting to order at 1:45 p.m. and announced HB 327 (EXTEND BOARD OF VETERINARY RY EXAMINERS) to be up for consideration. SENATOR RIEGER moved to pass HB 327 from committee with individual ual recommendations. There were no objections and it was so ordered. SENATOR KELLY announced SB 227 (MOTOR VEHICLE RENTAL TERMS) to be up for consideration. CAROL CARROL, Legislative Aide to Senator Kerttula, testified that SB 227 makes a minor change in law that would clarify that tract clauses in leases, in and of themselves, do not change the nature of a lease. A tract clause is a device used by a lessor and a lessee to come to more favorable lease terms when the lessee will maintain the vehicle in a better condition so that the asset turns out to be worth more at the end of the lease. SENATOR RIEGER moved to pass SB 227 from committee with individual recommendations. There were no objections and it was so ordered. Number 124 SENATOR KELLY announced SB 341 (EXTEND TOURISM MARKETING COUNCIL) to be up for consideration. SENATOR RIEGER moved to pass SB 341 from committee with individual recommendations. There were no objections and it was so ordered. SENATOR KELLY announced SB 213 (APUC EXTENSION AND REGULATORY COST T CHARGE) to be up for consideration. He said his aide, Josh Fink, had been working on a proposed CS. MR. FINK explained that the first section would make the four section heads partially exempt, a proposal from the Alaska Telephone Association. Section two increases the regulatory cost charge from .61% to .8%. That change is because of section 3 which allows electric utilities to subtract the cost of power from their gross revenues before the RCC applies. If that happens, APUC had indicated that RCC rates would rise 35%. The .61% cap would not allow them to grow or meet their budget in future years. He said they are currently not charging the full .61%. Number 200 BOB LOHR, Executive Director, Alaska Public Utilities Commission (APUC), said the current rate is .4% of the jurisdiction's gross revenues. He said if the RCC rates have to rise by 35%, an estimate based on preliminary figures, they would have to raise the cap to .8%. SENATOR KELLY said in response to Eureka who feels they are paying too much of the load of the APUC through their RCC charges, it looks like the bill would reduce theirs and redistribute it to the other utilities to balance out the load. DON SCHROER, APUC, said that everyone's rate would adjust. SENATOR SHARP said he didn't see how they needed an authorization increase, since rates would have to go up more than 50% in order to reach the .61% cap. SENATOR RIEGER said it looks like they are saying because they are taking so much out of the base, that .8% of the new base is as much as .61% of the old base. Number 227 DAVE HUTCHINS, Executive Director, Alaska Rural Energy Cooperative Association, agreed with Senator Rieger's analysis. The reason is based on the study done by the legislative auditor showed that at the present time the workloads that electrics bring the APUC is 30% and declining and the financial support through RCC, that the electrics have to pay for the APUC, is 42% and increasing. They think there is a flaw in the present formula and SB 213 is a simple way to correct it. MR. FINK said the 35% figure he gave was based on the definition in section 3 of cost of power. According to the APUC if they went with the broader definition, they would be increasing RCC rates for everyone else 45%. Number 274 Section 4 explains that when the RCC charges are collected for the 4th quarter, the fiscal year has ended so that money does not lapse into the general fund. Instead, it lapses as program receipts into the following year, MR. FINK said. Section 5 - 10 all are a result of a conceptual amendment adopted at the recommendation of the auditor that makes it easier for utility consumers to opt in or opt out of economic regulation. Currently 25% of the utility subscribers have signed a petition to do either one. SENATOR LINCOLN asked if all of the language in section 8 of version K would move over into the J version. SENATOR KELLY noted that was the understanding. MR. FINK said that section 13 is an extension until 1998 of the Board that sunsets this year. Section 14 repeals the sunset on the regulatory cost charge, because that can be looked at at the same time as the sunset for the Board. Section 15 is at the recommendation of the auditor and would stagger the terms of the two commissioners that are about to expire. Number 346 SENATOR KELLY asked if section 11 affected Alyeska? MR. FINK said he thought it would. MR. LOHR said that it would apply to all TAPS carriers, but only for the intrastate portion of their revenues which is less than 5% of their gross revenues from the entire system. SENATOR LINCOLN asked for clarification on 1999 in section 15. MR. FINK explained that the extension of the commission is 4 years and in section 15 the reason they use 1999 is because it's the first time they can do it without affecting current members. MR. LOHR said it appears to be about $500,000 and $600,000 worth of all RCC revenue from all jurisdictional pipeline carriers, including TAPS. SENATOR KELLY said he wanted to make certain they were not opening up a big increase just on Alyeska. MR. ROWE said they would get the same increase attributable to any other utility affected by the exclusion of a portion of electric revenues. DENNIS GEARY, Alaska Public Employees Association, supported SB 213 in that it extends the APUC. They do object to proposed section 1 which excludes certain supervisory unit employees from the classified personnel system. He said the employees in the APUC act in a different capacity than other state agencies that have commission staff and professional staff. He said no one now has the designation of "section head" so it's unclear who it would apply to. In other state agencies, the professional staff carries out the desires of the commissioned staff. In the APUC that doesn't happen. There the staff actually acts as a part of an independent group from the commissioned staff. Removal of the employees from the professional staff from the classified service makes those employees not bound by the laws and regulations of the state of Alaska, but more to the political agenda in the arena at the time. This is not something that would be beneficial to the state, to the employees, or to the consumers. MR. LOHR responded that they want that section in the bill and the four people are not identified in the bill, but their positions are identified on their work cards. He said it,s hard to move people around with current statute. SENATOR KELLY said it wasn't his intention to move the bill today. Number 448 SENATOR LINCOLN noted a statement in a letter from APUC that says the chairman of the APUC informed APEA that APUC did not request that the section heads be excluded from the classified service. MR. LOHR said he thought ATA proposed that the whole APUC be partially exempt. Knowing that wouldn't pass, the second choice was section heads. JIM ROWE, Alaska Telephone Association (ATA), said the language they put into section 13 was to facilitate the APUC with sufficient staff, sufficient expertise, particularly with all the changes coming with telecommunications. SENATOR KELLY announced that they would drop the amendment from the CS and adjourned the meeting at 2:20 p.m.