Legislature(2005 - 2006)BUTROVICH 205

04/15/2005 03:30 PM RESOURCES


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 19 PESTICIDE & BROADCAST CHEMICALS TELECONFERENCED
Moved CSHB 19(FIN) Out of Committee
*+ SB 164 SALMON PRODUCT DEVELOPMENT TAX CREDIT TELECONFERENCED
Moved SB 164 Out of Committee
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE RESOURCES STANDING COMMITTEE                                                                             
                         April 15, 2005                                                                                         
                           3:37 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Thomas Wagoner, Chair                                                                                                   
Senator Ralph Seekins, Vice Chair                                                                                               
Senator Ben Stevens                                                                                                             
Senator Fred Dyson                                                                                                              
Senator Bert Stedman                                                                                                            
Senator Kim Elton                                                                                                               
Senator Gretchen Guess                                                                                                          
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE BILL NO. 164                                                                                                             
"An Act relating to the salmon product development tax credit;                                                                  
providing for an effective date by amending an effective date in                                                                
sec. 7, ch. 57, SLA 2003; and providing for an effective date."                                                                 
     MOVED SB 164 OUT OF COMMITTEE                                                                                              
                                                                                                                                
CS FOR HOUSE BILL NO. 19(FIN)                                                                                                   
"An Act relating to pesticides and broadcast chemicals; and                                                                     
providing for an effective date."                                                                                               
     MOVED CSHB 19(FIN) OUT OF COMMITTEE                                                                                        
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                              
BILL: SB 164                                                                                                                  
SHORT TITLE: SALMON PRODUCT DEVELOPMENT TAX CREDIT                                                                              
SPONSOR(s): SENATOR(s) STEDMAN                                                                                                  
                                                                                                                                
04/06/05       (S)       READ THE FIRST TIME - REFERRALS                                                                        
04/06/05       (S)       RES, FIN                                                                                               
04/15/05       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
                                                                                                                                
BILL: HB  19                                                                                                                  
SHORT TITLE: PESTICIDE & BROADCAST CHEMICALS                                                                                    
SPONSOR(s): REPRESENTATIVE(s) MEYER                                                                                             
                                                                                                                                
01/10/05       (H)       PREFILE RELEASED 12/30/04                                                                              
01/10/05       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/10/05       (H)       RES, FIN                                                                                               
02/23/05       (H)       RES AT 1:00 PM CAPITOL 124                                                                             
02/23/05       (H)       Heard & Held                                                                                           
02/23/05       (H)       MINUTE(RES)                                                                                            
02/28/05       (H)       RES AT 1:00 PM CAPITOL 124                                                                             
02/28/05       (H)       Moved CSHB 19(RES) Out of Committee                                                                    
02/28/05       (H)       MINUTE(RES)                                                                                            
03/01/05       (H)       RES RPT CS(RES)  5DP 4NR                                                                               
03/01/05       (H)       DP: SEATON, ELKINS, LEDOUX, CRAWFORD,                                                                  
                         RAMRAS;                                                                                                
03/01/05       (H)       NR: OLSON, KAPSNER, GATTO, SAMUELS                                                                     
03/15/05       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
03/15/05       (H)       Heard & Held                                                                                           
03/15/05       (H)       MINUTE(FIN)                                                                                            
03/17/05       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
03/17/05       (H)       Moved CSHB 19(FIN) Out of Committee                                                                    
03/17/05       (H)       MINUTE(FIN)                                                                                            
03/18/05       (H)       FIN RPT CS(FIN) 4DP 1DNP 5NR                                                                           
03/18/05       (H)       DP: FOSTER, WEYHRAUCH, CROFT, MEYER;                                                                   
03/18/05       (H)       DNP: HOLM;                                                                                             
03/18/05       (H)       NR: HAWKER, STOLTZE, MOSES, KELLY,                                                                     
                         CHENAULT                                                                                               
03/23/05       (H)       TRANSMITTED TO (S)                                                                                     
03/23/05       (H)       VERSION: CSHB 19(FIN)                                                                                  
03/24/05       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/24/05       (S)       RES, FIN                                                                                               
04/15/05       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
TIM BARRY                                                                                                                       
Staff to Senator Stedman                                                                                                        
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Commented on SB 164 for sponsor.                                                                          
                                                                                                                                
SENATOR BERT STEDMAN                                                                                                            
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Sponsor of SB 164.                                                                                        
                                                                                                                                
CHUCK HARLAMERT, Tax Division                                                                                                   
Department of Revenue                                                                                                           
PO Box 110400                                                                                                                   
Juneau, AK  99811-0400                                                                                                          
POSITION STATEMENT:  Commented on SB 164.                                                                                     
                                                                                                                                
DUNCAN FIELDS, Vice President                                                                                                   
Kodiak Salmon Packers                                                                                                           
Kodiak AK                                                                                                                       
POSITION STATEMENT: Supported SB 164.                                                                                         
                                                                                                                                
STEPHANIE MADSEN, Vice President                                                                                                
Pacific Seafood Processors Association                                                                                          
222 Seward Street, Ste. 200                                                                                                     
Juneau AK 99801                                                                                                                 
POSITION STATEMENT: Supported SB 164.                                                                                         
                                                                                                                              
KRIS NORRIS                                                                                                                     
Government Affairs                                                                                                              
Icicle Seafoods                                                                                                                 
POSITION STATEMENT: Supported SB 164.                                                                                         
                                                                                                                              
REED STOOPS                                                                                                                     
Ocean Beauty Seafoods                                                                                                           
Juneau AK                                                                                                                       
POSITION STATEMENT: Supported SB 164.                                                                                         
                                                                                                                              
REPRESENTATIVE KEVIN MEYER                                                                                                      
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Sponsor of HB 19.                                                                                         
                                                                                                                              
MIKE PAWLOWSKI                                                                                                                  
Staff to Representative Meyer                                                                                                   
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Commented on HB 19.                                                                                       
                                                                                                                              
KRISTIN RYAN, Director                                                                                                          
Division of Environmental Health                                                                                                
Department of Environmental Conservation                                                                                        
410 Willoughby                                                                                                                  
Juneau, AK 99801-1795                                                                                                           
POSITION STATEMENT: Commented on HB 19.                                                                                       
                                                                                                                              
AL VEZEY                                                                                                                        
Fairbanks AK                                                                                                                    
POSITION STATEMENT: Commented on HB 19.                                                                                       
                                                                                                                              
KEN PERRY                                                                                                                       
Perry Paratex Pied Piper                                                                                                        
Alaska Pesticide Applicators Group                                                                                              
National Pest Management Association                                                                                            
Responsible Industry For A Sound Environment                                                                                    
Anchorage AK                                                                                                                    
POSITION STATEMENT: Opposed HB 19.                                                                                            
                                                                                                                                
VARSHA MATHRANI                                                                                                                 
Environmental Health Coordinator                                                                                                
Alaska's Community Action on Toxics                                                                                             
POSITION STATEMENT: Supported HB 19.                                                                                          
                                                                                                                                
ALAN COLTER                                                                                                                     
Anchorage AK                                                                                                                    
POSITION STATEMENT: Supported HB 19.                                                                                          
                                                                                                                                
SHABA KURTS                                                                                                                     
Alaska Pacific University                                                                                                       
Tok AK                                                                                                                          
POSITION STATEMENT: Supported HB 19.                                                                                          
                                                                                                                                
COLIN QUENHEARST                                                                                                                
Alaska Pacific University (APU) student                                                                                         
Anchorage AK                                                                                                                    
POSITION STATEMENT: Supported HB 19.                                                                                          
                                                                                                                                
JILL DONALDSON                                                                                                                  
Alaska Pacific University student                                                                                               
Anchorage AK                                                                                                                    
POSITION STATEMENT: Supported HB 19.                                                                                          
                                                                                                                              
ACTION NARRATIVE                                                                                                              
                                                                                                                                
CHAIR  THOMAS  WAGONER  called   the  Senate  Resources  Standing                                                             
Committee meeting to  order at 3:37:47 PM.  Present were Senators                                                             
Stedman, Seekins, Dyson, Guess, Elton and Chair Wagoner.                                                                        
                                                                                                                                
          SB 164-SALMON PRODUCT DEVELOPMENT TAX CREDIT                                                                      
                                                                                                                                
CHAIR   THOMAS  WAGONER   announced   SB  164   to   be  up   for                                                               
consideration.                                                                                                                  
                                                                                                                                
TIM BARRY, staff to Senator Stedman, read the sponsor statement.                                                                
                                                                                                                                
SB 164  extends the deadline  for salmon processors in  Alaska to                                                               
receive  a  salmon  product development  tax  credit.  Under  the                                                               
state's current  law, processors  can claim  the credit  only for                                                               
property first  placed into service  by the end of  this calendar                                                               
year.  This bill  would give  processors three  additional years,                                                               
until December 31, 2008, to claim the credit.                                                                                   
                                                                                                                                
This legislation also clarifies what  types of items are eligible                                                               
for the tax credit to  more effectively achieve the legislature's                                                               
goal  of   encouraging  Alaska  seafood  processors   to  develop                                                               
innovative value-added salmon products.                                                                                         
                                                                                                                                
He  recalled that  the  legislature  passed legislation  allowing                                                               
processors to claim a tax  credit on new equipment they purchased                                                               
to add  value to  salmon-using innovative  processing techniques.                                                               
The bill,  HB 90, that became  this law had been  proposed by the                                                               
Joint Legislative Salmon  Industry Task Force and was  part of an                                                               
effort by  Alaska's elected leaders  and the fishing  industry to                                                               
create incentives for  the industry to take  investment risks and                                                               
produce new salmon  products and it has  worked. This legislation                                                               
was  drafted  in  consultation  with  the  Tax  Division  of  the                                                               
Department of Revenue.                                                                                                          
                                                                                                                                
3:40:45 PM                                                                                                                    
SENATOR BERT  STEDMAN, sponsor  of SB 164,  said the  intent came                                                               
from the  Joint Legislative  Salmon Industry  Task Force  and was                                                               
intended to  move industry away  from the canned market  and into                                                               
other value-added markets.                                                                                                      
                                                                                                                                
3:41:45 PM                                                                                                                    
SENATOR BEN STEVENS joined the committee.                                                                                       
                                                                                                                                
3:42:16 PM                                                                                                                    
SENATOR STEDMAN explained:                                                                                                      
                                                                                                                                
     Again, we're trying to stimulate  the industry for jobs                                                                    
     and  value  creation....  It  takes  a  while  for  the                                                                    
     industry  to  respond  and  the  tax  credit  being  50                                                                    
     percent to  go against their fisheries  tax - sometimes                                                                    
     they  may have  a carry  forward and  the carry-forward                                                                    
     will last up to three years.                                                                                               
                                                                                                                                
3:43:55 PM                                                                                                                    
CHAIR  WAGONER asked  if insulated  fish totes  and ice  machines                                                               
were covered under the exemption.                                                                                               
                                                                                                                                
SENATOR STEDMAN said he thought those were excluded.                                                                            
                                                                                                                                
3:44:40 PM                                                                                                                    
SENATOR RALPH  SEEKINS asked how  much the tax credits  amount to                                                               
each year.                                                                                                                      
                                                                                                                                
SENATOR  STEDMAN replied  that  credits totaled  $1.5 million  in                                                               
each of the three years 2006 through 2008.                                                                                      
                                                                                                                                
3:46:12 PM                                                                                                                    
SENATOR  GUESS  asked  when  the   task  force  first  made  this                                                               
recommendation,  was it  their  intent to  revisit  the issue  in                                                               
three-year extensions or was it just a one-time shot.                                                                           
                                                                                                                                
SENATOR STEDMAN replied that he didn't recall.                                                                                  
                                                                                                                                
3:47:52 PM                                                                                                                    
SENATOR BEN STEVENS  said recalled that the task  force wanted to                                                               
give  the industry  a  period of  time to  make  the decision  to                                                               
invest and  wanted to  give them  an extended  period of  time to                                                               
recoup the  credit. It also did  not want the credit  to be open-                                                               
ended and wanted to reassess it.                                                                                                
                                                                                                                                
3:50:16 PM                                                                                                                    
SENATOR SEEKINS  asked which fisheries  were benefiting  from the                                                               
credit.                                                                                                                         
                                                                                                                                
CHUCK HARLAMERT,  Tax Division, Department of  Revenue, said that                                                               
this credit is limited to salmon processing.                                                                                    
                                                                                                                                
3:51:57 PM                                                                                                                    
SENATOR STEDMAN said he thought  it would be more concentrated in                                                               
places where fish are delivered.                                                                                                
                                                                                                                                
3:52:50 PM                                                                                                                    
CHAIR WAGONER asked if there is a pre-approval process.                                                                         
                                                                                                                                
MR.  HARLAMERT replied  that there  is  no pre-approval  process.                                                               
Processors  file a  claim form  for  this credit  with their  tax                                                               
returns.                                                                                                                        
                                                                                                                                
     Part of the  reason for the additional  language in the                                                                    
     bill is  because of  a lack  of a  pre-approval process                                                                    
     and  a  50  percent  credit rate.  Some  taxpayers  can                                                                    
     easily read the statute  too optimistically - perhaps a                                                                    
     little  too   broadly...  particularly  if   they  have                                                                    
     borrowed heavily  to invest.  Unknowingly, they  may be                                                                    
     accruing 11 percent interest.                                                                                              
                                                                                                                                
He said  the new element discussed  by the Salmon Task  Force was                                                               
the exclusion of  canneries, but the remainder of  this bill adds                                                               
clarifications to  try to prevent  the process of  folks claiming                                                               
and  not paying  their tax  and ending  up with  liabilities they                                                               
weren't aware of.                                                                                                               
                                                                                                                                
CHAIR WAGONER said he would  feel much more comfortable with pre-                                                               
approval for  the credit and asked  if the department had  a list                                                               
of what is approvable.                                                                                                          
                                                                                                                                
MR. HARLAMERT  replied that this  statute doesn't have a  list of                                                               
qualifying equipment, but requires  it to be processing equipment                                                               
as  opposed   to  supporting  equipment  for   transportation  or                                                               
storage. It  also requires that  the predominant product  of that                                                               
equipment  be a  value-added  salmon product.  He  said the  more                                                               
sophisticated taxpayers  have called  the department  to validate                                                               
whether  their plans  fell within  the  credit or  not and,  "Any                                                               
taxpayer is welcome to do that."                                                                                                
                                                                                                                                
3:57:00 PM                                                                                                                    
SENATOR ELTON asked if the  net effect of the immediate effective                                                               
date would be  an immediate limitation to the  kinds of equipment                                                               
that could be used for the tax credit.                                                                                          
                                                                                                                                
MR.  HARLAMERT  replied  no. The  additional  language  basically                                                               
fleshes out  and makes clearer  what is  meant. There is  one new                                                               
condition in the clarifying language  - it prohibits a credit for                                                               
canning equipment.                                                                                                              
                                                                                                                                
3:58:56 PM                                                                                                                    
DUNCAN FIELDS,  Vice President, Kodiak Salmon  Packers, liked the                                                               
tax  credit,  but  thought  it   needs  to  include  onshore  ice                                                               
machines.  He  explained  that   his  is  a  single-plant  salmon                                                               
processor and  it is struggling  to survive through  the downturn                                                               
in the salmon industry. He was  able to take advantage of the tax                                                               
credit and appreciated the legislature's  support of the industry                                                               
that is trying to rapidly  move toward the value-added processes.                                                               
As  a small  processor, he  has to  take smaller  steps than  the                                                               
larger folks in the industry.                                                                                                   
                                                                                                                                
MR. FIELDS  related that last year  he borrowed a fillet  line to                                                               
see how  it would work before  actually investing in one  and the                                                               
first thing he realized is that it  takes a huge amount of ice to                                                               
move the  fillets, because the salmon  has to relax for  24 to 48                                                               
hours before running it through the line.                                                                                       
                                                                                                                                
     You have  a whole series  of totes  and all the  ice. I                                                                    
     would say  it takes probably  twice as much ice  to run                                                                    
     fish  through  the  filleter.  So,  ice  machines,  ice                                                                    
     equipment, it seems would be  an important component to                                                                    
     encouraging the  industry, particularly  the processors                                                                    
     like us  to move  forward towards  value-added. Perhaps                                                                    
     it's included in the language  - again I would defer to                                                                    
     help from the Department of  Revenue, but I would think                                                                    
     something in  that top  line on  page 2  on processing,                                                                    
     packaging, cooling or  product finishing function would                                                                    
     make it  explicit and give  me a little  higher comfort                                                                    
     level.                                                                                                                     
                                                                                                                                
4:01:39 PM                                                                                                                    
He supported the  idea of not supporting old  technology, but was                                                               
concerned about losing opportunities  if new technology like pop-                                                               
tops  and  can-type  containers   were  excluded  as  traditional                                                               
processing equipment.                                                                                                           
                                                                                                                                
STEPHANIE  MADSEN,  Vice  President, Pacific  Seafood  Processors                                                               
Association, said she represents  salmon and whitefish processors                                                               
from around the  state and supported SB 164. She  related how the                                                               
credit  is working  for her  members saying  one member  invested                                                               
about $500,000 this  year, which represents about  two new fillet                                                               
lines and two other members  have fully utilized their 50 percent                                                               
tax credit.                                                                                                                     
                                                                                                                                
     I believe  that's a demonstration  that the  program is                                                                    
     working.  So,  we  would appreciate  the  extension.  I                                                                    
     think  one of  the  reasons that  the  request for  the                                                                    
     extension  is   because  it   was  difficult   for  the                                                                    
     processors  to  get  up  to  speed  and  to  get  those                                                                    
     investments immediately....                                                                                                
                                                                                                                                
4:06:06 PM                                                                                                                    
She   recommended  not   completely  eliminating   canned  salmon                                                               
products  from being  available  for the  tax  credit. While  she                                                               
understands their  not wanting to replace  the current equipment,                                                               
canned salmon  would always  have role in  many of  the fisheries                                                               
and there is  a strong canned salmon market for  sockeye and pink                                                               
salmon.                                                                                                                         
                                                                                                                                
     It depends  on the volume  and when the timing  of that                                                                    
     run  comes.  That will  kind  of  move you  toward  the                                                                    
     importance  of canned.  We  do  support examination  or                                                                    
     possibility of  use for  these tax  credits to  move us                                                                    
     towards value-added canned salmon  and that is the pop-                                                                    
     top.... Exactly what does that  mean? Well, you have to                                                                    
     get a  new seamer, because  it's a different  top. And,                                                                    
     as you know, the canned  salmon and the seaming is very                                                                    
     critical....   There   would   probably  have   to   be                                                                    
     modifications to the tracking  line that sends the tops                                                                    
     down to  the main  machine as  well as  modification to                                                                    
     the  retort  system.  Because  of  the  different  top,                                                                    
     you're going to have to  insure that that retort system                                                                    
     is compatible  with the  new can.  So, that's  the need                                                                    
     for equipment as far as the use for pop-tops....                                                                           
                                                                                                                                
     One other  thought for  consideration is  the exclusion                                                                    
     of used equipment. Certainly  we don't want shenanigans                                                                    
     as  far  as  one  company  selling  used  equipment  to                                                                    
     another,  but  in  the food  business  there  are  many                                                                    
     opportunities  to bring  used  equipment  to the  state                                                                    
     that are  used either  by other  food industries  or by                                                                    
     other  non-salmon producers.  For  example, the  fillet                                                                    
     machines  that are  used in  salmon are  also the  same                                                                    
     Baader  machines   that  are  used  in   the  whitefish                                                                    
     industry. So, there is a  possibility that getting used                                                                    
     equipment will  not only save the  processor money, but                                                                    
     it will save  the state some money from  the tax credit                                                                    
     perspective. If  you pay less for  that equipment, your                                                                    
     tax  credit is  going to  be limited  or less,  but the                                                                    
     benefit is the same.                                                                                                       
                                                                                                                                
4:08:53 PM                                                                                                                    
SENATOR STEDMAN said those two  suggestion were explored with the                                                               
Department of Revenue,  but it was decided that the  intent is to                                                               
help the industry move beyond cans  and used equipment and he did                                                               
not think  they were  stimulating the status  quo by  doing that.                                                               
If a company wants to stay there, that's okay.                                                                                  
                                                                                                                                
MS.  MADSEN  reiterated  and emphasized  that  canned  salmon  is                                                               
becoming  more   consumer-friendly  and  is  used   globally  and                                                               
clarified  that  used equipment  would  be  used for  value-added                                                               
business, not recycling.                                                                                                        
                                                                                                                                
4:12:12 PM                                                                                                                    
CHAIR WAGONER said the issue is  that a business will lease a new                                                               
machine  and bring  it to  Alaska. If  they like  it, they  might                                                               
negotiate a  purchase and  he asked if  that type  of transaction                                                               
would be disallowed under this legislation.                                                                                     
                                                                                                                                
MR. HARLAMERT replied  that technically it would  be considered a                                                               
used product  and would not  be able  to be purchased  under this                                                               
statute. He suggested that the  business could negotiate a lease-                                                               
purchase contract  and then  back out  of it  as opposed  to just                                                               
leasing it first.                                                                                                               
                                                                                                                                
SENATOR SEEKINS  agreed with Ms.  Madsen that used  equipment has                                                               
its place  with value-added businesses  and asked if there  was a                                                               
mechanism  to  transfer  credits  to a  downstream  purchaser  of                                                               
equipment.                                                                                                                      
                                                                                                                                
MR. HARLAMERT replied no.                                                                                                       
                                                                                                                                
SENATOR  SEEKINS said  that would  make it  difficult for  him to                                                               
take   the  risk   and   therefore  he   thought   it  would   be                                                               
counterproductive to their goal saying:                                                                                         
                                                                                                                                
     If there  was a  perfectly useable  system or  piece of                                                                    
     equipment  in the  state that  could  bring some  other                                                                    
     processor toward the goal that  you're trying to get to                                                                    
     that you  would preclude it  from being allowed  in the                                                                    
     program.                                                                                                                   
                                                                                                                                
He said  that a  lease purchase agreement  is just  a conditional                                                               
sales agreement. Very  few of them give someone the  option to be                                                               
able to  determine later on  whether or not  they want to  buy it                                                               
and then  for tax purposes call  it a lease at  the beginning and                                                               
later on turn it in to a straight line depreciation.                                                                            
                                                                                                                                
MR. HARLAMERT  responded that it  was not his place  to elaborate                                                               
on legislative  intent here.  He clarified  that the  federal tax                                                               
credit was at no time allowed for used property. He explained:                                                                  
                                                                                                                                
     It is  a fact with  credits especially when you  get in                                                                    
     the range  of 50 percent  that they are  highly subject                                                                    
     to abuse. And,  normally, if you have  a credit, you're                                                                    
     trying to  stimulate something that  does not  have its                                                                    
     own economic  justification. You're  trying to  tip the                                                                    
     scales  to establish  that economic  justification, but                                                                    
     recognizing   that   in   doing   that   the   economic                                                                    
     justification of doing something  else is always there.                                                                    
     If  the credit  is  written too  loosely  to allow  the                                                                    
     taxpayer to  get the same  credit for something  just a                                                                    
     little off your target,  that's what's going to happen.                                                                    
     And so, it's  generally a good idea to err  on the side                                                                    
     of caution with  credits and be more  narrow than you'd                                                                    
     like to  be if  you want  to be  the most  effective in                                                                    
     achieving   your   goal.    That's   just   a   general                                                                    
     observation.                                                                                                               
                                                                                                                                
SENATOR SEEKINS still thought the  credit was too restrictive and                                                               
he thought it was an impediment to the goal of the bill.                                                                        
                                                                                                                                
4:19:01 PM                                                                                                                    
CHAIR WAGONER gave him an example  of a guy who paid over $80,000                                                               
for a pinball  machine that wound up not working  and another guy                                                               
who bought  a reconditioned  one that  worked three  times better                                                               
than the  one that was brand  new. "That's why I  brought this up                                                               
in the first  place for discussion. These are some  of the things                                                               
you run into in processing equipment.                                                                                           
                                                                                                                                
4:19:41 PM                                                                                                                    
SENATOR  STEDMAN  clarified if  a  person  purchases a  piece  of                                                               
equipment that does  qualify, you don't have to file  for the tax                                                               
credit if you don't want  to. He would entertain discussion about                                                               
pop-tops,  although  he  didn't  want  to  stimulate  the  canned                                                               
market.                                                                                                                         
                                                                                                                                
SENATOR ELTON said  it was something to think about,  but he also                                                               
didn't want to  give tax credits to produce the  same old product                                                               
packaged in  the same old  way. Maybe  the canned issue  could be                                                               
dealt with by using  a term of art saying this  tax credit is not                                                               
available for the same old same old.                                                                                            
                                                                                                                                
4:23:08 PM                                                                                                                    
KRIS NORRIS,  Government Affairs,  Icicle Seafoods,  supported SB                                                               
164.  She said  Icicle Seafoods  purchases and  processes a  wide                                                               
variety of seafood throughout Alaska.  She explained that in 2003                                                               
Icicle  used  the  salmon  product   development  tax  credit  to                                                               
purchase equipment to  make new products with  salmon roe (Ikura)                                                               
- that  prevented oxidation and  bacterial growth  from happening                                                               
prolonging shelf  life. In 2004,  it used the  salmon utilization                                                               
tax   credit   to   install   new   equipment   that   was   more                                                               
technologically advanced  in their  salmon meal plant  in Seward.                                                               
As a direct  result of that upgrade, Icicle has  been able to run                                                               
a lot more  pounds of salmon through their facility  and with few                                                               
exceptions can utilize 100 percent  of an entire salmon including                                                               
the guts.                                                                                                                       
                                                                                                                                
Icicle  Seafoods made  saleable products  from salmon  parts that                                                               
normally  would have  been  part of  the waste  stream  - a  huge                                                               
improvement. They have also improved  the quality of the products                                                               
they are producing,  most notably the oil.  New technology allows                                                               
them to  extract a  lot more  of the  water and  grit. It  is now                                                               
being used as a supplement for cattle feed and animal treats.                                                                   
                                                                                                                                
The other  thing it has allowed  them to do  is to be a  lot more                                                               
aggressive in purchasing of salmon.  It's opened up opportunities                                                               
that weren't there before.                                                                                                      
                                                                                                                                
     "So, when we  can be more aggressive, there's  a lot of                                                                    
     beneficiaries -  our fleet,  our employees  are getting                                                                    
     more  work, we're  buying more  fish,  so there's  more                                                                    
     taxes generated. That kicks back  to the City of Seward                                                                    
     and certainly  to the state  of Alaska.... I  feel like                                                                    
     the incentives that were provided  to us from the State                                                                    
     of Alaska  really helped  us with  economic development                                                                    
     that   had  some   spin  offs   beyond  just   our  own                                                                    
     company.... I also  want to say that  the Department of                                                                    
     Revenue  has been  good to  work with....  We certainly                                                                    
     run  our ideas  past  Mr. Harlamert  before we  proceed                                                                    
     with them  to make sure  that it  is a project  that is                                                                    
     going  to  be eligible  for  a  tax credit....  In  our                                                                    
     business  the  margins are  pretty  small  and in  some                                                                    
     years there aren't any....                                                                                                 
                                                                                                                                
MS. NORRIS said Icicle Seafoods  is very interested in having the                                                               
opportunity to have some tax  credits applied for additional meal                                                               
and oil plants.  Its new technology in the Seward  plant has only                                                               
operated one year  and management is convinced it  will have even                                                               
better results this  year because they know a lot  more about the                                                               
equipment and are  considering investing more money  into some of                                                               
their other  locations. She said, "If  it hadn't of been  for the                                                               
tax incentive  provided by the  state, we probably  wouldn't have                                                               
made  that investment...."  and thought  the spin  offs would  be                                                               
very big.                                                                                                                       
                                                                                                                                
4:28:41 PM                                                                                                                    
SENATOR  SEEKINS asked  how  she  felt about  a  tax credit  pre-                                                               
purchase approval system with the Department of Revenue.                                                                        
                                                                                                                                
MS.  NORRIS replied  that has  been her  practice -  to call  the                                                               
Department of  Revenue first  to make sure  their idea  would fly                                                               
with them.  She was told no  about her pop-top idea.  "It kept us                                                               
from doing the project."                                                                                                        
                                                                                                                                
4:29:48 PM                                                                                                                    
SENATOR SEEKINS asked if she had  been able to get approval for a                                                               
pop-top system, would it have  meant incremental business or just                                                               
a transfer in what they do.                                                                                                     
                                                                                                                                
MS.  NORRIS  replied that  she  thought  it  would bring  in  new                                                               
customers.                                                                                                                      
                                                                                                                                
4:30:27 PM                                                                                                                    
REED  STOOPS,  Ocean Beauty  Seafoods,  supported  SB 164.  Ocean                                                               
Beauty is  one of the larger  salmon producers in Alaska  and the                                                               
tax credit program  was the determining factor  in its purchasing                                                               
new equipment for  its Excursion Inlet (in  Southeast) and Alatak                                                               
plants (in Kodiak). It increased  the number of employees in both                                                               
plants, expanded the  number of fish they  purchased and extended                                                               
the season at  both ends. All this enabled them  to find a market                                                               
for lower-value fish products.                                                                                                  
                                                                                                                                
SENATOR  STEDMAN  asked  under what  circumstances  Ocean  Beauty                                                               
purchased their plant at Excursion Inlet.                                                                                       
                                                                                                                                
MR. STOOPS explained  that Ward Cove decided to close  all of its                                                               
seafood plants  in Southeast  and Bristol Bay  and at  that point                                                               
there was a  risk of there being no major  processor in this part                                                               
of Southeast to buy salmon.  The governor and some other business                                                               
people who  were dependent  on that  business looked  for seafood                                                               
processors who could take Ward  Cove's place. Ocean Beauty agreed                                                               
to  buy the  Excursion  Inlet and  Alatak plants.  A  lot of  the                                                               
employees  were  hired back  and  then  Ocean Beauty  focused  on                                                               
updating the  equipment. Last  year, because  of the  tax credit,                                                               
they purchased some  new equipment and now they  want to purchase                                                               
more equipment of the same nature  or expand the number of plants                                                               
that have the value-added capability.                                                                                           
                                                                                                                                
4:33:12 PM                                                                                                                    
He  said, "This  legislation means  the difference  between doing                                                               
more  in Alaska  rather  than  just doing  the  same  thing on  a                                                               
continuing basis."                                                                                                              
                                                                                                                                
4:35:23 PM                                                                                                                    
SENATOR  STEDMAN  put forth  a  conceptual  amendment to  include                                                               
conversion or installation of pop-tops  in language that excludes                                                               
all cans.                                                                                                                       
                                                                                                                                
SENATOR ELTON thanked the sponsor  for that amendment and said he                                                               
is  comfortable with  him offering  it in  the Finance  Committee                                                               
where he has a seat.                                                                                                            
                                                                                                                                
4:37:02 PM                                                                                                                    
SENATOR BEN STEVENS asked Ms.  Norris if Icicle Seafoods is going                                                               
to invest in another plant.                                                                                                     
                                                                                                                                
MS.  NORRIS replied  affirmatively.  While  she understood  there                                                               
were abuses  of that particular  credit, she thought  an argument                                                               
could be made  that including those kinds  of operations directly                                                               
helped Icicle add  value to guts, viscera,  frames, carcasses and                                                               
skins that would normally not have been utilized.                                                                               
                                                                                                                                
SENATOR  BEN   STEVENS  recalled   that  the  evolution   of  the                                                               
utilization actually  came from  trying to  help a  situation the                                                               
Department   of  Environmental   Conservation   (DEC)  had   with                                                               
discharge issues.  He asked  Mr. Stoops  if that  plant installed                                                               
utilization equipment as well.                                                                                                  
                                                                                                                                
REED STOOPS replied  yes that they put in new  equipment for full                                                               
utilization.                                                                                                                    
                                                                                                                                
SENATOR BEN STEVENS asked the  department how much money was used                                                               
to purchase  new utilization-of-waste equipment versus  the other                                                               
portion of the bill that caused them problems.                                                                                  
                                                                                                                                
4:41:06 PM                                                                                                                    
MR. HARLAMERT said  he couldn't disclose the exact  amount of the                                                               
credit, but a majority of  the waste credit went for utilization-                                                               
of-waste property.  But, that was  not true  in 2003 when  it was                                                               
almost nil.  In 2004, more  than half  of all the  credit claimed                                                               
for waste was investment in  property to utilize salmon waste and                                                               
to create products from it.                                                                                                     
                                                                                                                                
4:42:49 PM                                                                                                                    
SENATOR  STEDMAN  moved  to  pass  SB  164  from  committee  with                                                               
individual recommendations and attached  fiscal notes. There were                                                               
no objections and it was so ordered.                                                                                            
4:43:19 PM At ease 4:45:34 PM                                                                                               
                                                                                                                                
         CSHB  19(FIN)-PESTICIDE & BROADCAST CHEMICALS                                                                      
                                                                                                                                
CHAIR  THOMAS  WAGONER  announced  CSHB  19(FIN)  to  be  up  for                                                               
consideration.                                                                                                                  
                                                                                                                                
REPRESENTATIVE  KEVIN MEYER  said he  was  looking for  a way  to                                                               
eliminate  the  state  general   fund  obligation  to  the  State                                                               
Pesticide  Program, which  is required  by federal  law. He  also                                                               
wanted to  provide reasonable protections  for public  health for                                                               
when pesticides are used throughout the state.                                                                                  
                                                                                                                                
The way  the program works,  the Environmental  Protection Agency                                                               
(EPA)  approves a  pesticide for  sale in  the United  States and                                                               
then each  state has  to register the  pesticide for  sale within                                                               
the state.  The state agency  in this  case is the  Department of                                                               
Environmental   Conservation  (DEC).   It   is  responsible   for                                                               
registering  the  pesticides  and inspecting  and  enforcing  the                                                               
requirements that  EPA puts on  the handling and  distribution of                                                               
these chemicals.  In Alaska, the  program has been paid  for with                                                               
general funds,  but in other  states the  program is paid  for by                                                               
the chemical manufacturers  in the form of a fee  they pay to the                                                               
state.                                                                                                                          
                                                                                                                                
When  he first  contacted the  chemical manufacturers,  they were                                                               
not  surprised  nor did  they  resist  being  charged a  fee  for                                                               
chemicals  that  they  sell  in   Alaska.  The  only  thing  they                                                               
requested is  that the state doesn't  try to fill its  fiscal gap                                                               
on their  backs. The department  suggested a  fee of $85  that is                                                               
set  up on  a  sliding  basis so  that  chemicals  that are  used                                                               
infrequently would  be charged less.  This fee would  make Alaska                                                               
      th                                                                                                                        
the 11 cheapest in the country.                                                                                                 
                                                                                                                                
REPRESENTATIVE MEYER  explained that when pesticides  are used in                                                               
a  public place  this bill  requires that  they be  applied by  a                                                               
certified applicator. The intent is  to target areas where people                                                               
go  in  masses  and  shouldn't  have  to  worry  about  a  recent                                                               
spraying. The other  requirement is that the  spraying is noticed                                                               
something like a "Wet Paint" sign.                                                                                              
                                                                                                                                
4:50:46 PM                                                                                                                    
SENATOR  GUESS  asked if  public  schools  were included  in  the                                                               
definition of public place.                                                                                                     
                                                                                                                                
REPRESENTATIVE  MEYER  replied  yes;   it  includes  schools  and                                                               
universities.                                                                                                                   
                                                                                                                                
SENATOR GUESS  asked if it  includes Alaska Native  Hospital, but                                                               
not Providence Hospital.                                                                                                        
                                                                                                                                
REPRESENTATIVE MEYER responded that he thought she was right.                                                                   
                                                                                                                                
MIKE  PAWLOWSKI,  staff to  Representative  Meyer,  said he  knew                                                               
Providence and  Alaska Regional Hospitals  would not  be included                                                               
in this. He  said they worked on the definition  closely with the                                                               
DEC.                                                                                                                            
                                                                                                                                
KRISTIN  RYAN,   Director,  Division  of   Environmental  Health,                                                               
Department   of  Environmental   Conservation  (DEC),   said  the                                                               
definition  is  specific in  the  proposed  legislation, but  she                                                               
would have to  look at other statutes regarding  a definition for                                                               
"government office."  She hadn't considered  government hospitals                                                               
and  since  even the  Native  hospitals  are technically  run  by                                                               
consortiums, she didn't know if  they would be considered a state                                                               
building.   She  thought   they  would   be  considered   federal                                                               
government buildings. "But, I think  our intent here was to cover                                                               
state government buildings."                                                                                                    
                                                                                                                                
4:54:01 PM                                                                                                                    
SENATOR  GUESS  said  if  the intent  is  state  buildings,  that                                                               
wouldn't include schools.                                                                                                       
                                                                                                                                
MS.  RYAN   responded  that  schools  are   covered  by  existing                                                               
regulations that already require public notice.                                                                                 
                                                                                                                                
SENATOR  GUESS  asked  if government-funded  programs  not  in  a                                                               
government facility, like Headstart, are covered.                                                                               
                                                                                                                                
MS. RYAN  interpreted that to  not be included. She  didn't think                                                               
the  department   had  the  authority  to   require  the  federal                                                               
government to post  warnings in their buildings.  She would check                                                               
on that.                                                                                                                        
                                                                                                                                
SENATOR   GUESS  asked   her   to  check   on  requirements   for                                                               
municipalities and local government buildings as well.                                                                          
                                                                                                                                
4:55:18 PM                                                                                                                    
SENATOR  SEEKINS  asked  if licensing  of  pesticide  applicators                                                               
included spray bottles or people on page 3, line 6.                                                                             
                                                                                                                                
MS. RYAN replied people.                                                                                                        
                                                                                                                                
SENATOR SEEKINS  said he  looked at AS  46.03.320(b) and  it says                                                               
the department may  provide, by regulation, for  the licensing of                                                               
private applicators  and asked  about public  applicators. "Would                                                               
they have to have the same standards as a private applicator?"                                                                  
                                                                                                                                
MS. RYAN  replied that  is existing  statute and  she could  do a                                                               
temporary waiver for  people who couldn't get to  the course, but                                                               
needed  to  do  an  emergency  application.  The  department  has                                                               
interpreted the statutes to require  commercial applicators to be                                                               
certified. That  means you have to  take a test and  go through a                                                               
course that teaches you how to apply the chemicals safely.                                                                      
                                                                                                                                
     It's  against  federal law  to  ever  apply a  chemical                                                                    
     against  the   label.  The  label   is  the   law  with                                                                    
     pesticides. So,  a private applicator  is held  to that                                                                    
     just as  much as  a commercial applicator.  Everyone is                                                                    
     supposed to follow the label.                                                                                              
                                                                                                                                
4:57:02 PM                                                                                                                    
SENATOR  SEEKINS  asked if  a  Department  of Transportation  and                                                               
Public Facilities (DOTPF) employee  spraying down a highway would                                                               
be subject to licensing and have to pass the same examination.                                                                  
                                                                                                                                
MS. RYAN replied:                                                                                                               
                                                                                                                                
     There's a  few things  that impact  state applications.                                                                    
     For one  thing, our regulations currently  require them                                                                    
     to get  a permit.  We don't  require permits  for every                                                                    
     type  of  application; we  only  require  a permit  for                                                                    
     aerial spraying -  for spraying over lakes  like a fish                                                                    
     kill  by Fish  and Game  or if  you apply  it to  state                                                                    
     lands. So, DOT and the Railroad  have to come to us for                                                                    
     permits  and if  you're  familiar with  the history  at                                                                    
     all, that's  never been  successful. They  have applied                                                                    
     and not been  able to achieve the permit  due to public                                                                    
     reaction.                                                                                                                  
                                                                                                                                
     So, through  the permit process, we  would require them                                                                    
     to make  sure they use certified  applicators otherwise                                                                    
     they  aren't using  chemicals on  state land  without a                                                                    
     permit.                                                                                                                    
                                                                                                                                
4:58:26 PM                                                                                                                    
SENATOR SEEKINS said:                                                                                                           
                                                                                                                                
     I've always  thought that what  was good for  the goose                                                                    
     was  good for  the  gander and  if  we were  protecting                                                                    
     public  health  and safety  and  we  felt that  it  was                                                                    
     necessary to  certify and license  this group,  then we                                                                    
     ought to certify  and license all people  that do that,                                                                    
     not  as just  a matter  of  fairness, but  a matter  of                                                                    
     public safety. I'm just trying  to see if there are any                                                                    
     loopholes for  people to jump  through here if  we pass                                                                    
     this  legislation  based  on   their  status  or  their                                                                    
     employment.                                                                                                                
                                                                                                                                
MS. RYAN replied  that a stipulation of getting  permits would be                                                               
certification.  The  department   wants  the  pesticides  applied                                                               
correctly. Commercial  applicators are defined in  regulations as                                                               
people who make money doing this.                                                                                               
                                                                                                                                
4:59:19 PM                                                                                                                    
SENATOR SEEKINS  asked how many fees  would be in the  $120 range                                                               
in reference  to language about  reasonable fees on page  3, line                                                               
4.                                                                                                                              
                                                                                                                                
MS. RYAN replied that it's  for simplification of accounting. She                                                               
didn't expect to  have a fee for different  products. There would                                                               
be a waiver  from the fee if the product  hadn't been used before                                                               
in  Alaska,  if  research  is  being   done  on  it  or  if  it's                                                               
experimental.                                                                                                                   
                                                                                                                                
     Based on the  money we need to generate  to support the                                                                    
     program, the  people left paying  the fee  would either                                                                    
     pay $85, assuming  40 percent don't pay the  fee, or if                                                                    
     90 percent  pay the  fee, it  would only  be a  $55 fee                                                                    
     across the board.                                                                                                          
                                                                                                                                
5:00:50 PM                                                                                                                    
AL  VEZEY,  Fairbanks,  urged  the   committee  to  proceed  with                                                               
caution. Pesticides is an extremely  complex subject. It includes                                                               
wood  preservatives,  herbicides  and  numerous  other  specialty                                                               
products  that improve  people's lives.  He used  the removal  of                                                               
brush from  highways so drivers can  see moose as an  example. He                                                               
said  the  state has  never  successfully  permitted a  pesticide                                                               
application on state  land as required by state law.  "We need to                                                               
be careful before we take these products away from the public."                                                                 
                                                                                                                                
5:04:50 PM                                                                                                                    
He  said that  a majority  of registered  applicators are  public                                                               
employees  who are  trying  to  do their  jobs  in a  responsible                                                               
manner.  They  currently  pay  a   fee  of  $25  to  the  federal                                                               
Agricultural  Cooperative Extension  Service, a  division of  the                                                               
Department  of  Agriculture.  He   encouraged  the  committee  to                                                               
develop that relationship further  because he thought the federal                                                               
government would  be able  to do  more if  the state  showed more                                                               
support for the program that they  are already doing in the state                                                               
of Alaska.                                                                                                                      
                                                                                                                                
He said  the people paying the  fee would by and  large be public                                                               
employees and would  probably be reimbursed for it  by the agency                                                               
they work for.  Then the state would be put  back in the position                                                               
of  being asked  to fund  additional  expenses due  to having  to                                                               
register with  the state. He  asked the committee to  compare the                                                               
cost to the public and the harms it would inadvertently cause.                                                                  
                                                                                                                                
MR.  VEZEY asked  if they  are going  to require  the owner  of a                                                               
large public  housing project  to go  through a  registration and                                                               
public notice process before they  implement a program to control                                                               
rats and mice.                                                                                                                  
                                                                                                                                
     Individual apartment owners don't have a chance in the                                                                     
      world of managing a rodent problem in a multi-family                                                                      
     building. It  has to  be done on  a broad  scope basis.                                                                    
     Looking at  the regulations, we don't  really know what                                                                    
     will come  out of it.  Is it going to  encourage public                                                                    
     safety and public health or  just simply discourage the                                                                    
     use of  pesticide in  the consequent  deterioration the                                                                    
     quality of the environment that we all live in?                                                                            
                                                                                                                                
5:08:18 PM                                                                                                                    
KEN PERRY, Perry Paratex Pied  Piper, said he also represents the                                                               
Alaska Pesticide Applicators Group,  the National Pest Management                                                               
Association and  a group  called the  Responsible Industry  For A                                                               
Sound  Environment.   He  praised  the  DEC   and  its  pesticide                                                               
division, but said  while it is sorely  under-funded and severely                                                               
criticized,  it  has  shown   remarkable  ability  in  overseeing                                                               
pesticide usage and the current registration program.                                                                           
                                                                                                                                
He said the bill is well-intentioned, but seriously flawed.                                                                     
                                                                                                                                
     It holds  no reasonable  benefit to  the people  of our                                                                    
     state. I  urge you to consider  carefully testimony you                                                                    
     have  and will  be  hearing sponsored  by the  tax-free                                                                    
     outside  supported special  interest groups.  Please do                                                                    
     not  forget that  these  are the  same  people who  are                                                                    
     holding not  just our small Alaska  businesses, but our                                                                    
     major  business interests,  such  as ANWR  and the  gas                                                                    
     pipeline. It  is, therefore, no surprise  that they are                                                                    
     now attacking chemical  manufacturers whose billions of                                                                    
     dollars of  research have  produced safe  and effective                                                                    
     products that  tens of  thousands of  your constituents                                                                    
     have chosen to purchase over  the years - items such as                                                                    
     mosquito  repellant they  put  on their  bodies or  use                                                                    
     around  their  homes  and  lodges,  the  flea  and  tic                                                                    
     collars they put on their  pets, disinfectants they use                                                                    
     to clean their  homes and keep their spas  and hot tubs                                                                    
     safe,  the paints  they use  on their  boats, the  wood                                                                    
     preservatives they use to  protect their structures and                                                                    
     the  agricultural products  that our  farmers in  Delta                                                                    
     and the  Mat-Su use  to need to  have available  to eek                                                                    
     out their livings....                                                                                                      
                                                                                                                                
MR. PERRY said  this is an anti-business bill and  not passing it                                                               
would send a  large message to a large number  of major companies                                                               
that  Alaska is  business  friendly, not  just  a playground  for                                                               
extremists.                                                                                                                     
                                                                                                                                
5:13:39 PM                                                                                                                    
VARSHA  MATHRANI,  Environmental   Health  Coordinator,  Alaska's                                                               
Community Action on  Toxics, asked the committee  to consider the                                                               
long-term  affects of  their actions.  Children are  particularly                                                               
sensitive  to negative  health effects  from  exposures to  toxic                                                               
chemicals. Children play  closer to the ground with  lots of hand                                                               
to mouth  behavior; and their  bodies and organs are  growing and                                                               
developing.  Many  pesticides are  known  to  be associated  with                                                               
adverse effects  on the  developing brain  and nervous  system of                                                               
children.  She strongly supported HB 19.                                                                                        
                                                                                                                                
ALAN COLTER,  Anchorage resident,  related how  a good  friend of                                                               
his died two years ago due  to pesticide use in landscaping. They                                                               
worked  together and  used  chemicals  indiscriminately based  on                                                               
what their boss told them. She died a long slow painful death.                                                                  
                                                                                                                                
He said  that many of the  chemicals used by the  public are very                                                               
toxic, especially to  children and older people.  He supported HB                                                               
19 that would promote their responsible use.                                                                                    
                                                                                                                                
5:20:26 PM                                                                                                                    
SHABA  KURTS, Alaska  Pacific University  student, asked  how the                                                               
public is supposed to know what  is dangerous and what is not. He                                                               
trusts that the people  who apply them will do it  to the best of                                                               
their knowledge,  but he  felt there  should be  more regulation,                                                               
especially when it comes to  something that could be dangerous to                                                               
the public health.                                                                                                              
                                                                                                                                
5:22:14 PM                                                                                                                    
COLIN QUENHEARST, Anchorage, supported HB  19. It is valuable for                                                               
all  Alaska residents  because it  gives them  the right  to know                                                               
when  pesticides are  sprayed so  that they  can choose  to avoid                                                               
dangerous substances.  It is  valuable particularly  for children                                                               
as it  pertains to  marking of  playgrounds where  pesticides are                                                               
used.                                                                                                                           
                                                                                                                                
5:23:50 PM                                                                                                                    
JILL DONALDSON,  Alaska Pacific University student,  supported HB                                                               
19.  She has  an Associates  Degree in  Environmental Technology,                                                               
which includes  30 hours of training  with pesticide application,                                                               
regulation and  uses under DEC and  the New York State  law. This                                                               
has shown her how potentially  dangerous pesticides and broadcast                                                               
chemicals can be.  The state  of Alaska can learn what has worked                                                               
well and what has not worked well in other states.                                                                              
                                                                                                                                
One main concern is that  certified applicators hold the majority                                                               
of responsibility and burdens that  are associated with pesticide                                                               
regulations.   However,   they   agree  that   proper   pesticide                                                               
application  and   the  necessary  precautions   associated  with                                                               
application  go hand  in hand  with ideal  business tactics.  She                                                               
supported  the licensing  of all  pesticide applicators  not only                                                               
for  the safety  of the  individual, but  for the  safety of  all                                                               
Alaskan residents.                                                                                                              
                                                                                                                                
She  said  it is  also  important  to  realize that  the  average                                                               
American  may  be exposed  to  more  hazardous chemicals  through                                                               
household  applications  rather   than  industrial  applications.                                                               
"That's why  public education  is a  key factor  when controlling                                                               
the use of pesticides and broadcast chemicals."                                                                                 
                                                                                                                                
5:26:10 PM                                                                                                                    
MS. RYAN  commented that  the committee heard  a mix  of comments                                                               
today  and that  her division  receives complaints  on pesticides                                                               
frequently. It  is probably the  things she spends the  most time                                                               
on and yet it's probably the smallest program in her division.                                                                  
                                                                                                                                
     The  four staff  in the  pesticide program  use federal                                                                    
     funds; we  have primacy for pesticides  similar to what                                                                    
     we're trying to do with  NPDES and we use those federal                                                                    
     funds  to  inspect  places   that  sell  pesticides  or                                                                    
     commercial  applicators that  use  them  and make  sure                                                                    
     they are doing them right. That's what we do.                                                                              
                                                                                                                                
     This  bill would  add a  few more  responsibilities. We                                                                    
     would be looking now at  public notice in certain areas                                                                    
     and we'd  be expanding the  certification requirements.                                                                    
     And also, then, it gets  rid of the general fund that's                                                                    
     used to  support the program.  It's the match  with the                                                                    
     federal  funds...I  think,  $49,000  is  just  straight                                                                    
     general fund to the program.                                                                                               
                                                                                                                                
She didn't want  people to be restricted from  using new products                                                               
and expected to waive many fees because of that.                                                                                
                                                                                                                                
     Certification to me  is the real key.  People that know                                                                    
     what  they're  doing  is  what's   going  to  make  the                                                                    
     difference. With  all toxins,  the dose is  the poison.                                                                    
     Even salt and caffeine are toxic at certain levels.                                                                        
                                                                                                                                
5:29:08 PM                                                                                                                    
SENATOR  SEEKINS asked  what keeps  someone from  bringing in  an                                                               
unregistered pesticide.                                                                                                         
                                                                                                                                
MS. RYAN replied  that that happens all the time  and that's what                                                               
the  division's four  inspectors look  for when  they are  out in                                                               
green  houses or  Fred  Meyers.  They are  making  sure that  the                                                               
chemicals for sale  on the shelves are registered by  EPA and the                                                               
state. When unregistered  chemicals are found, the  store is told                                                               
they can't  sell it here and  they are issued a  stop-sale order.                                                               
Stores comply  easily, because  they can  return the  products to                                                               
the manufacturer  for a refund  and there  is no penalty  at this                                                               
time.                                                                                                                           
                                                                                                                                
SENATOR SEEKINS asked  if an applicator can bring  a pesticide in                                                               
from Washington and apply it with no penalty.                                                                                   
                                                                                                                                
MS. RYAN replied that it would  be illegal and the department can                                                               
issue a notice of violation  and while the pesticide program does                                                               
not  have administrative  penalty  or civil  fine authority,  she                                                               
related  that the  Attorney General's  office  was able  to do  a                                                               
sting a couple of years ago.                                                                                                    
                                                                                                                                
SENATOR   GUESS  asked   who  is   responsible  for   the  public                                                               
notification for spraying in a public place under HB 19.                                                                        
                                                                                                                                
MS.  RYAN  replied  that  the  statute  leaves  that  up  to  the                                                               
department to determine through  regulation. She assumed that the                                                               
responsibility for signage would be on the applicator.                                                                          
                                                                                                                                
5:32:27 PM                                                                                                                    
SENATOR GUESS asked  if there is a penalty in  regulation for not                                                               
giving public notice.                                                                                                           
                                                                                                                                
MS. RYAN replied  that it would be a violation  of the regulation                                                               
and the division issues a notice of violation.                                                                                  
                                                                                                                                
5:33:23 PM                                                                                                                    
CHAIR WAGONER asked who does the training.                                                                                      
                                                                                                                                
MS. RYAN replied  that her staff has a  good working relationship                                                               
with the Cooperative Extension Service,  but with this bill there                                                               
would be  an increased demand  for training and she  has proposed                                                               
creating a training  CD for use by remote  communities and people                                                               
who couldn't get to her office easily.                                                                                          
                                                                                                                                
5:34:37 PM                                                                                                                    
SENATOR GUESS  asked DEC and  the sponsor to  get back to  her on                                                               
the  definitions  of government  office  and  public facility  to                                                               
clarify the record.                                                                                                             
                                                                                                                                
5:35:00 PM                                                                                                                    
SENATOR SEEKINS moved CSHB19 (FIN) from committee with                                                                          
individual recommendations and attached fiscal note. There were                                                                 
no objections and it was so ordered.                                                                                            
                                                                                                                                
There being no further business to come before the committee,                                                                   
Chair Wagoner adjourned the meeting at 5:35:37 PM.                                                                            

Document Name Date/Time Subjects