02/24/2009 01:30 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB1 | |
| SB84 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 1 | TELECONFERENCED | |
| += | SB 84 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
February 24, 2009
2:02 p.m.
MEMBERS PRESENT
Senator Joe Paskvan, Chair
Senator Joe Thomas, Vice Chair
Senator Bettye Davis
Senator Kevin Meyer
Senator Con Bunde
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 1
"An Act increasing the minimum hourly wage, and creating an
annual adjustment to the minimum hourly wage based on the rate
of inflation; and providing for an effective date."
MOVED CSSB 1(L&C) OUT OF COMMITTEE
SENATE BILL NO. 84
"An Act relating to bonding limitations and confidentiality of
records and information of the Alaska Industrial Development and
Export Authority; and providing for an effective date."
HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 1
SHORT TITLE: ALASKA MINIMUM WAGE
SPONSOR(s): SENATOR(s) WIELECHOWSKI, ELLIS, THOMAS, DAVIS,
FRENCH
01/21/09 (S) PREFILE RELEASED 1/9/09
01/21/09 (S) READ THE FIRST TIME - REFERRALS
01/21/09 (S) L&C, FIN
02/05/09 (S) L&C AT 1:30 PM BELTZ 211
02/05/09 (S) Heard & Held
02/05/09 (S) MINUTE(L&C)
02/12/09 (S) L&C AT 1:30 PM BELTZ 211
02/12/09 (S) Heard & Held
02/12/09 (S) MINUTE(L&C)
02/17/09 (S) L&C AT 1:30 PM BELTZ 211
02/17/09 (S) AIDEA: BONDING LIMITS; CONFIDENTIALITY
02/24/09 (S) L&C AT 1:30 PM BELTZ 211
BILL: SB 84
SHORT TITLE: AIDEA: BONDING LIMITS; CONFIDENTIALITY
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
01/26/09 (S) READ THE FIRST TIME - REFERRALS
01/26/09 (S) L&C, FIN
02/17/09 (S) L&C AT 1:30 PM BELTZ 211
02/17/09 (S) Bills Previously Heard/Scheduled
02/24/09 (S) L&C AT 1:30 PM BELTZ 211
WITNESS REGISTER
AL LEVINSON, Restaurant owner
Anchorage, AK
POSITION STATEMENT: Had question about Amendment 1 to SB 1.
VINCE BELTRAMI, President
Alaska AFL-CIO
POSITION STATEMENT: Supported SB 1.
TED LEONARD, Executive Director
Alaska Industrial Development and Export Authority (AIDEA)
POSITION STATEMENT: Supported SB 84.
BRIAN BJORKQUIST, Senior Assistant Attorney General
Department of Law (DOL)
POSITION STATEMENT: Answered questions on SB 84.
ACTION NARRATIVE
2:02:42 PM
CHAIR JOE PASKVAN called the Senate Labor and Commerce Standing
Committee meeting to order at 2:02 p.m. Present at the call to
order were Senators Davis, Meyer, Thomas and Paskvan. Senator
Bunde joined the committee at 2:04 p.m.
SB 1-ALASKA MINIMUM WAGE
CHAIR PASKVAN announced SB 1 to be up for consideration.
SENATOR THOMAS moved to adopt CSSB 1, labeled 26-LS006\E, and
objected for discussion purposes.
2:05:23 PM
CHAIR PASKVAN explained that SB 1 sets Alaska's minimum wage at
$1 above the federal minimum wage. If they had used the same
proportions of $.04 and $.42 applied to stamps over the last 50
years, Alaska's minimum wage would be an additional $5/hr. at
$12.25. He found that the first legislature 50 years ago said
the Alaska the minimum wage would be approximately 50 percent of
the federal minimum wage, which in 2009 would be a difference of
$7.25. If that same principle were applied now, $3.62 would be
added to the current rate, which would equate to a $10.87/hr.
minimum wage.
At the same time the committee has heard from the business
community that these are troubling times for the nation and he
didn't want to impose too much of a burden at one time, so the
CS is at $1 above federal minimum wage and it takes effect
January 1, 2010.
SENATOR BUNDE mentioned that the CS does not involve an
automatic escalator or COLA.
CHAIR PASKVAN said that was correct.
SENATOR THOMAS removed his objection and therefore, version E
was before the committee.
2:08:36 PM
SENATOR BUNDE moved to adopt Amendment 1.
26-LS0006\R.2
Cook/Wayne
AMENDMENT 1
OFFERED IN THE SENATE
TO SB 1 BY SENATOR BUNDE
Page 1, line 1, following "Act":
Insert "relating to the minimum hourly wage,"
Page 1, line 12, following "section":
Insert "except as provided in (d) of this
section"
Page 2, following line 12:
Insert a new bill section to read:
"* Sec. 2. AS 23.10.065 is amended by adding a new
subsection to read:
(d) An employer may apply tips or gratuities
bestowed upon an employee as a credit toward payment
of the minimum hourly wage required by this section
equal to 30 percent of that minimum wage. The credit
may be applied only if the
(1) employee receives tips or gratuities in
the course of the employment;
(2) tips or gratuities equal or exceed an
average hourly amount of at least $15 calculated for
the pay period for which the credit is applied;
(3) amount of tips or gratuities can be
determined by the employee's declaration for purposes
of 26 U.S.C. 3101 (Federal Insurance Contributions
Act); and
(4) employee was informed by the employer
of the provisions of this subsection at least 30 days
before an employer first elects to apply tips or
gratuities as a credit toward payment of the minimum
hourly wage of that employee."
Renumber the following bill section accordingly.
SENATOR THOMAS objected for discussion purposes.
CHAIR PASKVAN announced an at ease at 2:09 p.m.
2:10:24 PM
CHAIR PASKVAN called the meeting back to order at 2:10.
SENATOR BUNDE explained that a lot of people from the
hospitality industry have testified that wait staff is often in
the $20-wage category and they would get a raise when the people
in the back of the house who are already working for more than
minimum wage, but substantially less than $20/hr. would not get
a raise. He didn't think Amendment 1 would cost anything, and it
would help businesses maintain jobs.
SENATOR THOMAS said he didn't understand objections to tipped
employees getting a minimum wage increase. Many places share
tips.
2:15:21 PM
SENATOR MEYER said he understands that 45 other states have some
sort of a tip credit, and he asked Senator Bunde how he came up
with 30 percent more versus 10 or 15 percent. He agreed with
Senator Thomas that if he has a good waiter or waitress he wants
to reward them, and this amendment would reduce what they would
get.
2:17:57 PM
A roll call vote was taken. Senator Bunde voted yea; Senators
Meyer, Davis, Thomas and Paskvan voted nay; so Amendment 1
failed.
SENATOR BUNDE said since the legislature proposed to receive a
50 percent pay raise and since the amount proposed in the CS was
not based on any hard data, he wanted to offer conceptual
Amendment 2 to: "Instead of a dollar more than federal minimum
wage, which would make it $8.15 instead of $7.15, my amendment
would make the minimum wage at $14.30, double what it is
currently, similar to the proposal to double our legislative
salary. That seems to be as much a precedent as anything."
He added that with this amendment, people at minimum wage would
make about $570/wk. or almost $2300/mo. or $27,500/yr. That
would take them to about current legislative pay levels -
substantially above the poverty level.
SENATOR THOMAS objected and said that people are concerned with
raising the minimum to $1 - $1.50, and they would be even more
concerned with this figure. He believed the CS addressed the
major complaints he has heard and he sees in most of the
restaurants he goes to that people move up. People have said the
reason they have the lower wage is because it's a beginning
wage.
2:21:49 PM
SENATOR BUNDE said, "The current proposal leaves people in
poverty, and if you want to take them out of poverty, here's an
opportunity to do it."
SENATOR THOMAS said the restaurateurs who have commented
anecdotally said few of these people were living in poverty and
were making anywhere from $30,000 to $60,000. Some of that has
to be taken factually.
2:22:35 PM
A roll call vote was taken. Senator Bunde voted yea; Senators
Meyer, Davis, Thomas and Paskvan voted nay; and so conceptual
Amendment 2 failed.
AL LEVINSON, Restaurant owner, Anchorage, wanted to know if the
tip credit (Amendment 1) failed.
CHAIR PASKVAN said that it had failed.
2:24:08 PM
VINCE BELTRAMI, President, Alaska AFL-CIO, supported SB 1.
However, he was a little disappointed they lowered the amount to
$1 over the federal minimum wage and eliminated the CPI.
Washington and Oregon have had good experiences using the CPI in
terms of both jobs and business. Recent data shows that
Washington had an over 10 percent increase in restaurant and bar
employment from the time it passed the increase up until 2006,
"which punched a hole in the argument that the minimum wage
increase is bad for business." Other studies have shown no
evidence of negative employment effects on small business as a
result of increasing the minimum wage.
MR. BALTRAMI said he found a paper published by the National
Employment Law Project that speaks to Alaska's tipped employees.
Senator Thomas and Senator Meyer hit the nail on the head when
he said a tip credit is punitive to waiters and waitresses, some
of whom are professional. A lot of people make their living on
tips; since the last minimum wage increase in 2003, they have
not had an increase. There has been a roughly 18 percent-
increase in the cost of living without a comparable increase in
pay.
He has seen a lot of menu prices go up with the increased cost
of business, but since employees aren't getting increases, he
wasn't sure how negatively impacted the restaurant owners would
really be with this raise. But higher wages could result in a
positive impact of more people being able to go out and spend
money and spend it in their establishments and in the general
economy. He also mentioned that he is gathering the initial 100
signatures for a ballot initiative to raise the minimum wage to
what was originally proposed in SB 1.
SENATOR BUNDE asked if he would have supported his Amendment 2.
MR. BELTRAMI replied there has to be an element of
reasonableness, and it wasn't realistic.
CHAIR PASKVAN closed public testimony.
2:30:59 PM
SENATOR THOMAS moved to pass CSSB 1(L&C) from committee with
individual recommendations and attached fiscal notes.
SENATOR BUNDE objected.
A roll call vote was taken. Senators Thomas, Meyer, Davis and
Paskvan voted yea; Senator Bunde voted nay; so CSSB 1(L&C) moved
from committee.
2:32:17 PM
CHAIR PASKVAN announced an at ease.
SB 84-AIDEA: BONDING LIMITS; CONFIDENTIALITY
2:35:10 PM
CHAIR PASKVAN called the meeting back to order at 2:32 and
announced SB 84 to be up for consideration.
TED LEONARD, Executive Director, Alaska Industrial Development
and Export Authority (AIDEA) said AIDEA's mission is to provide
various means of financing to promote economic growth and
diversification in Alaska. An important way that AIDEA fulfills
its mission is by providing Alaska businesses and non profit
agencies with access to long-term capital at reasonable cost
through its conduit revenue and loan participation programs.
AIDEA requested this bill in order to amend its statutes to
allow the Authority flexibility in how and when it issues bonds
to insure that it obtains the most favorable terms and interest
rates it can in order to reduce the overall cost of financing
for AIDEA and Alaskan business and non profits that use its
financing program. This is in Sections 1 and 2
He said the bill would also assist the mission of the Authority
by clarifying and assuring borrowers and development project
applicants that certain records and information provided to it
will be kept confidential, and also set up a process to do that.
That is in Sections 3-6.
2:37:24 PM
Section 1 would amend their annual bonding limitation to exclude
refunding and conduit revenue bonds from the $400 million/12-
month bond limitation (a rolling 12 months, not an annual 12
months). The main types of bonds issued by AIDEA are general
obligation (GO) bonds, revenue bonds, conduit revenue bonds and
refunding bonds.
The refunding bonds are used to refinance and replace existing
bond debt; a good analogy of that is when mortgage rates go down
it's a good time to refinance your mortgage. Refunding bonds can
be done on GO bonds, revenue bonds and conduit revenue bonds.
2:39:11 PM
They are also asking conduit revenue bonds to be excluded from
the $400 million limit. These bonds are provided to businesses
and non profits where AIDEA acts as a conduit for the issuance
of taxable and tax exempt bonds. AIDEA has financed over $1.1
billion in conduit revenue bonds for 309 projects through this
program. These bonds are payable solely by the project developer
primarily from the revenue generated by the project. The
Authority has no financial obligation for the bond debt; neither
are the assets nor the credit of AIDEA at risk.
MR. LEONARD said one of the prime benefits of this program is
that AIDEA can pass its tax exempt status to a project developer
who meets certain criteria. Only states and municipalities have
the ability to do that. So for businesses and non profits that
meet certain IRS regulations, the only way to do this is through
a state organization or a municipality.
2:40:32 PM
Tax exempt bonds for each state have a $260 million annual cap,
and the Alaska Bond Committee has to approve those. In essence
refunding and conduit bonds help promote the Authority's
economic development mission without substantially increasing
the amount of its outstanding bond debt. Enactment of this
amendment would ensure that the 12-month bond limit would not
preclude the Authority from issuing debt that would provide the
Authority, Alaska businesses and non profits with more favorable
terms and lower capital costs or limit AIDEA's conduit revenue
bond program.
2:41:56 PM
SENATOR THOMAS asked if refinancing bonds has a standard fee or
is the fee negotiated.
MR. LEONARD answered that it is a negotiated process. Part of
Section 2 clarifies that the proceeds from the refunding debt
can be used to pay those new issuant fees.
2:42:32 PM
Section 2 begins on page 1, line 8, and amends AS 44.99.095 to
provide for two recommendations. It would reinstate the
Authority's ability to issue bonds that existed before the July
1, 2007 statutory sunset and it clarifies in statute that the
Authority can use proceeds from the refunding bonds to finance
certain costs and expenses associated with the issuance of the
refunding bonds.
Due to the statutory sunset, AIDEA currently requires
legislative approval to issue any bonds except refunding and
conduit revenue bonds. Section 2 would eliminate the sunset and
enable the Authority to again issue most types of bonds without
legislative approval, but it would still require legislative
approval to issue GO and revenue bonds in excess of $10 million
to assist in financing AIDEA-owned development projects. One
example of that would be the Red Dog Mine.
2:45:09 PM
MR. LEONARD said the second change in Section 2 will allow
proceeds from the refunding bonds to retire the outstanding
bonds, the cost of refinancing and other costs related to the
issuance of the refunding bonds. In the past they had to come
back to the legislature for approval to do that.
2:46:06 PM
Sections 3-6 amend the confidentiality of information provision
and adds clarification to the definition that certain records
and information provided to the Authority are confidential and
establishes a process for the Authority to determine that
confidentiality.
He explained that the Authority has heard several complaints
from several borrowers who are project developers that AS
44.85.215 does not clearly establish that the Authority can
retain the confidentiality of certain records or information
that is essential and proprietary to their businesses. So,
Section 3 clarifies and identifies the specific type of trade
secrets that are kept confidential.
Section 6 further clarifies existing language by defining "trade
secrets" using the Alaska Uniform Trade Secrets Act in AS
45.50.940(3). Section 5 establishes a process for AIDEA to
determine which records and information will be kept
confidential. Under sections 3 and 5 the applicant must request
confidentiality and make an adequate showing to the executive
director that the records and information should be kept
confidential. Based on that request, the executive director
would make a determination and this process would provide
greater assurance to the applicants that certain information and
records will be kept confidential. The important thing is that
it does that at the start of the process.
2:48:41 PM
CHAIR PASKVAN wanted to hear more about the template that
determines confidentiality.
BRIAN BJORKQUIST, Senior Assistant Attorney General, Department
of Law (DOL), said the standard applied under AS 44.88.215(a)
wouldn't change from existing law. Certain specific types of
information are confidential and not public records. These are
listed in items 1-8 - like income tax returns, financial
statements, and profit and loss statements. The showing the
applicant would have to make is that the document in question
fits within what is listed.
CHAIR PASKVAN asked if a document is submitted with a request
that it be confidential, and the executive director determines
it's not confidential, does the business owner or project owner
get to withdraw it before it becomes public.
MR. BJORKQUIST answered yes.
2:50:45 PM
SENATOR BUNDE asked assuming someone in the public felt that
things labeled confidential didn't meet the statutory
requirements, would there be recourse for them through the
Freedom of Information Act or would it require a court lawsuit.
MR. BJORKQUIST answered that under this statute the executive
director would make a determination of confidentiality at the
time the document is submitted by the applicant. However, in the
process of public records request there would be an opportunity
for a challenge, but because the determination had already been
made by the executive director, there would be a heavier burden
to overcome.
2:52:31 PM
MR. LEONARD continued saying that Section 8 makes the effective
date July 1, 2009.
2:52:55 PM
SENATOR THOMAS asked why he wanted to revisit this issue.
MR. LEONARD said a few years back they almost had to stop a
bonding project based on the $400 million limitation and AIDEA
would like to reissue some variable rate bonds they have now.
They are actually also looking forward to the time when the bond
market starts to smooth out.
2:54:20 PM
SENATOR MEYER asked what the state is paying for a bond now.
MR. LEONARD answered that AIDEA does not have the moral
obligation of the state; so for taxable bonds it's about 8
percent. It hasn't issued a non-taxable bond for a while. The
last he heard the state did a AA bond for was the prison at 5.99
percent.
2:55:57 PM
SENATOR MEYER said he liked the sunset clause. Why remove it?
MR. LEONARD answered the possibility of losing one of AIDEA's
major tools every three years is why they are against the
sunset. It is one of their main tools to perform their mission.
SENATOR MEYER said the AIDEA dividend the state has received the
last few years has helped fund the general budget, so the
legislature would probably want to continue some oversight into
its business, and he wanted the sunset clause to stay.
2:57:34 PM
MR. LEONARD said AIDEA believes the budget process provides that
oversight to the state.
2:58:22 PM
CHAIR PASKVAN closed public testimony on SB 84, and held it for
further hearing.
SENATOR DAVIS thanked Mr. Leonard for his testimony.
2:58:44 PM
There being no further business to come before the committee,
Chair Paskvan adjourned the meeting at 2:58 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB01 - Alaska Minimum Wage - Bill Packet.pdf |
SL&C 2/5/2009 1:30:00 PM SL&C 2/12/2009 1:30:00 PM SL&C 2/17/2009 1:30:00 PM SL&C 2/24/2009 1:30:00 PM |
SB 1 |
| SB84 - AIDEA Bonding Limits.pdf |
SL&C 2/17/2009 1:30:00 PM SL&C 2/24/2009 1:30:00 PM SL&C 2/26/2009 1:30:00 PM |
SB 84 |