Legislature(1995 - 1996)
1996-01-17 House Journal
Full Journal pdf1996-01-17 House Journal Page 2461 HOUSE JOURNAL ALASKA STATE LEGISLATURE NINETEENTH LEGISLATURE -- SECOND SESSION Juneau, Alaska Wednesday January 17, 1996 Tenth Day Pursuant to adjournment, the House was called to order by Speaker Phillips at 10:13 a.m. Roll call showed 36 members present. Representative Brown had been previously excused from a call of the House today. Representative Toohey was excused due to illness. Representatives Nicholia and Kubina were absent and their presence was noted later. The invocation was offered by the Chaplain, Pastor David Horn of the Faith Lutheran Church. Representative Bunde moved and asked unanimous consent that the invocation be spread on the journal. There being no objection, it appears below: O God of nations, King of kings, head of all things created, save Your people and bless our land. Protect those who have no shelter from the cold, those at sea, those who work far from home. Instill in our hearts a love of justice and a yearning for peace. Thank You for our freedom, bless the families of those who drew their last breath defending it and please forgive us for thinking we have obtained it ourselves, apart from You. Bless this body and their deliberations today. Lord, in Your mercy, hear our prayer, in Jesus' name. Amen. The Pledge of Allegiance was led by Representative B.Davis. 1996-01-17 House Journal Page 2462 CERTIFICATION OF THE JOURNAL Representative Vezey moved and asked unanimous consent that the journal for the ninth legislative day be approved as certified by the Chief Clerk. There being no objection, it was so ordered. REPORTS OF STANDING COMMITTEES HB 392 The Community & Regional Affairs Committee has considered: HOUSE BILL NO. 392 An Act relating to the affirmative vote necessary to amend the articles of incorporation of Native village corporations to authorize the classification of directors. The report was signed by Representatives Ivan and Austerman, Co- chairs, with the following individual recommendations: Do pass (2): Austerman, Ivan No recommendation (2): Elton, Kott The following fiscal notes apply: Zero fiscal note, Dept. of Health & Social Services, 1/17/96 Zero fiscal note, Dept. of Community & Regional Affairs, 1/17/96 HB 392 was referred to the Judiciary Committee. INTRODUCTION OF CITATIONS The following citations were introduced and referred to the Rules Committee for placement on the calendar: Honoring - Barbara Mitchell, Juneau Teacher of the Year By Representatives Robinson, Elton; Senator Duncan 1996-01-17 House Journal Page 2463 Honoring - Deborah Morsberger, Vista Volunteer By Senator Duncan; Representatives Elton, Robinson In Memoriam - Aline Strutz By Representative Toohey In Memoriam - Georgianne Blanket By Representative Foster In Memoriam - Glenn P. Auliye By Representative Foster In Memoriam - Ada Johnsson Degnan By Representative Foster **The presence of Representative Nicholia was noted. INTRODUCTION, FIRST READING AND REFERENCE OF HOUSE BILLS HB 397 SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 397 by Representative Austerman, entitled: An Act relating to the fisheries resource landing tax and to the seafood marketing assessment; and providing for an effective date. was read the first time and referred to the House Special Committee on Fisheries, and the Resources and Finance Committees. HB 424 HOUSE BILL NO. 424 by Representative Davies, entitled: An Act establishing a vehicle operation curfew for minors. was read the first time and referred to the Health, Education & Social Services, State Affairs and Judiciary Committees. 1996-01-17 House Journal Page 2464 HB 425 HOUSE BILL NO. 425 by the House Rules Committee by request of the Governor, entitled: An Act relating to the financing authority, programs, operations, and projects of the Alaska Industrial Development and Export Authority; providing an exemption from the procurement code for certain projects of the authority; and providing for an effective date. was read the first time and referred to the House Special Committee on Economic Development, and the State Affairs, Labor & Commerce and Finance Committees. The following fiscal notes apply: Zero fiscal note, Dept. of Administration, 1/17/96 Zero fiscal note, Dept. of Commerce & Economic Development, 1/17/96 The Governor's transmittal letter, dated January 16, 1996, appears below: Dear Speaker Phillips: Under the authority of art. III, sec. 18, of the Alaska Constitution, I am transmitting a bill to boost Alaskas economy and create jobs in the state by strengthening the bonding authority of the Alaska Industrial Development and Export Authority (AIDEA). The bill also modifies AIDEAs business assistance program to make it more effective in light of the recent changes to the federal Small Business Administration loan guarantee program. In addition, the bill includes required bonding authority for several major development projects. The first basic component of the bill (sec. 2) restores AIDEAs bonding authority for development projects of $10,000,000 or less. AIDEAs general bonding authority expired June 30 and has severely restricted AIDEAs ability to assist not only in key development projects but also in conduit revenue financing transactions that do not involve the credit of AIDEA or the state. 1996-01-17 House Journal Page 2465 HB 425 The second component of the bill makes needed changes to AIDEAs business assistance program (primarily secs. 5 through 12) and repeals the existing July 1, 1996 sunset provision for the program (sec. 17(2)). Recent changes in the federal small business administration program have left a financing void for Alaska small businesses. The bill will make changes in AIDEAs business assistance loan guarantee program allowing AIDEA, in conjunction with the states private financial institutions, to create additional financing opportunities for state businesses. The third component of the bill provides legislative authority for two important projects that exceed the $10 million dollar statutory threshold. Although there are legal questions as to whether this approval of bonds infringes on executive powers, I believe the legislature needs to participate in AIDEAs development agenda. This bill would authorize AIDEA to issue up to $60,000,000 in revenue bonds for expansion, improvement, and modification of AIDEAs existing port and transportation facilities serving the Red Dog Mine (sec. 18). Repayment of the bonds would be the obligation of mine developer Cominco, Ltd. The Red Dog already provides more than 350 jobs, 15 percent of the jobs in the Northwest Arctic Borough. The expansion project will provide up to 70 more jobs and allow the mine to continue to be a major source of employment in the region for the next 50 years. The bill also provides a limited procurement exemption for contracts entered into by AIDEA related to the Red Dog Mine expansion and other similarly situated AIDEA projects (sec. 1). The second project this bill authorizes is AIDEAs acquisition of the Snettisham hydroelectric project (sec. 19). Congress recently authorized the Alaska Power Administrations sale of Snettisham to the state. This bill authorizes the issuance of up to $100,000,000 of AIDEA bonds to finance the acquisition. Repayment would be the responsibility of Alaska Electric Light and Power under a take-or- pay long-term power sales contract. Snettisham is a 78 megawatt facility that is expected to provide long-term rate stability for customers in Juneau and Douglas. 1996-01-17 House Journal Page 2466 HB 425 Finally, the bill makes technical modifications to AIDEAs statutes (secs. 3, 4, 5, 6, 14, 15, 16, and 17(1)) and repeals previously granted bonding authority for fueling facilities at the Anchorage International Airport and the Midrex facility proposed for Point MacKenzie. AIDEA will not be required to issue bonds for either of these projects. In a time of dwindling state resources it is fortunate that we have a financially health agency like AIDEA to forge public-private partnerships that can strengthen the states economic base. This bill will enhance the tools available to AIDEA to further this mission. I urge your passage of this bill. Sincerely, /s/ Tony Knowles Governor HB 426 HOUSE BILL NO. 426 by the House Rules Committee by request of the Governor, entitled: An Act approving an interim classification by the commissioner of natural resources closing certain land within the Situk River system to new mineral entry; and providing for an effective date. was read the first time and referred to the State Affairs Committee, the House Special Committee on Fisheries, and the Resources and Finance Committees. The following fiscal notes apply: Zero fiscal note, Dept. of Fish & Game, 1/17/96 Zero fiscal note, Dept. of Natural Resources, 1/17/96 The Governor's transmittal letter, dated January 16, 1996, appears below: 1996-01-17 House Journal Page 2467 HB 426 Dear Speaker Phillips: Under the authority of art. III, sec. 18, of the Alaska Constitution, I am transmitting a bill relating to the permanent closure of certain land within the Situk River system to new mineral entry. The closure was called for in the Yakataga Area Plan adopted in April, 1995. The permanent closure is sought due to the importance of the Situk River system in supporting commercial, sport, subsistence, and personal use fisheries. A permanent closure of an area of state land exceeding 640 contiguous acres to new mineral entry requires legislative approval. This bill would provide legislative approval of an interim classification order by the commissioner of natural resources. The state Department of Fish and Game has worked closely with Yakutat area businesses and fishers in developing the Situk management plan. The closure to new mineral entry has gathered broad local support from users of this world-class fishery. Because the interim classification closing the system to new mineral entry will expire on the 90th day of the legislative session unless approved by the legislature, I urge your early and favorable consideration of this bill. Sincerely, /s/ Tony Knowles Governor HB 427 HOUSE BILL NO. 427 by the House Rules Committee by request of the Governor, entitled: An Act establishing the office of tax appeals in the Department of Administration; revising the procedures for formal hearing of certain tax appeals, including appeals regarding seafood marketing assessments; providing for the release of agency records relating 1996-01-17 House Journal Page 2468 HB 427 to formal administrative tax appeals; relating to litigation disclosure of public records; clarifying administrative subpoena power in certain tax matters; and providing for an effective date. was read the first time and referred to the State Affairs Committee, the House Special Committee on Oil & Gas, and the Resources and Finance Committees. The following fiscal notes apply: Fiscal note, Dept. of Administration, 1/17/96 Fiscal note, Dept. of Revenue, 1/17/96 Zero fiscal note, Dept. of Law, 1/17/96 The Governor's transmittal letter, dated January 16, 1996, appears below: Dear Speaker Phillips: Under the authority of art. III, sec. 18, of the Alaska Constitution, I am transmitting a bill relating to certain tax appeal procedures. This bill addresses the concerns of fairness and improves the efficiency and openness of certain administrative tax appeals presently assigned to the Department of Revenue. The bill has four main components: transfer of the function of hearing certain tax appeals (including appeals regarding seafood marketing assessments) from the Department of Revenue (DOR) to a newly- created office of tax appeals in the Department of Administration; revision of the tax appeal procedures to encourage earlier exchange of information and resolution of tax disputes; opening administrative tax appeals to public examination and scrutiny; and clarification of the ability of the DOR to obtain information regarding tax matters. Transferring the function of hearing administrative tax appeals to the Department of Administration will address a perception held by certain taxpayers that the current system is unfair because the tax audit and appeal function are both in the DOR. Courts have consistently found that combining the functions of auditing taxes and hearing tax appeals in the same department is fair. Nevertheless, I have decided to 1996-01-17 House Journal Page 2469 HB 427 recommend the transfer to remedy the perception of unfairness. Transfer from the DOR will have the additional advantage of removing a difficulty the commissioner of revenue often faces. As the ultimate decision maker in an appeal, the commissioner of revenue must distance himself or herself from the auditing division when the matter reaches the formal hearing stage. Transferring these hearing functions from the DOR resolves this issue. Under the proposed bill, the commissioner of revenue may be involved with the auditing division throughout the appeal process. This will foster resolution of tax appeals more quickly and efficiently. The second component of the bill is a revision of the revenue tax procedures to encourage earlier exchange of information and to lessen the burden of discovery during the formal appeal phase. The bill also requires that administrative law judges supervising tax appeals limit discovery to relevant information and permits further limitation of discovery in order to promote efficient, just, and speedy resolution of appeals. The purpose is to prevent revenue tax appeals from becoming wars of attrition with huge volumes of documents being requested and produced. The bill would induce both parties to a tax dispute to focus on the bona fide issues at hand. A third feature of the bill is that the formal tax appeal proceedings, records, and decisions would be open to the public. Under current law, a tax matter becomes public only when it is appealed to the superior court. Tax appeals often are of great public interest and public scrutiny will help the process. The fourth component of the bill is a clarification of the DORs subpoena power during the audit stage. Under current law, the DOR has the power to compel production of records and testimony necessary to complete an audit, but in practice the DOR has almost always relied upon voluntary release of information by taxpayers and depended upon the discovery process of the formal hearing to obtain information that a taxpayer has refused or failed to release. The current system has no express procedure for judicial enforcement of tax audit subpoenas. Many times in the past, a taxpayers position has been initially rejected due to the taxpayers failure to provide substantiating information. Then, during the appeal, the taxpayer released the relevant information and made the issue moot. This practice has unnecessarily complicated 1996-01-17 House Journal Page 2470 HB 427 and delayed tax disputes. The bill provides a streamlined process for court enforcement of subpoenas issued during the audit stage and clarifies the current ambiguity in AS43.55.040 as to whether the DOR is vested with investigatory powers to the full extent of the law in order to perform the audit function. The DOR, in consultation with the Department of Law, has prepared a section-by-section analysis that is available to explain the detailed features of the bill. This bill is designed to help break the chain of antagonistic tax disputes that have characterized our states recent history. Disputes will not end, of course, but if this bill becomes law, they will be resolved more quickly and efficiently to the advantage of taxpayers and the public alike. I urge your support of this bill. Sincerely, /s/ Tony Knowles Governor HB 428 HOUSE BILL NO. 428 by the House Finance Committee, entitled: An Act giving notice of and approving a lease-purchase agreement for construction and operation of a correctional facility in the Third Judicial District, and setting conditions and limitations on the facility's construction and operation. was read the first time and referred to the Judiciary and Finance Committees. HB 429 HOUSE BILL NO. 429 by the House Finance Committee, entitled: An Act relating to the authority of the Department of Corrections to contract for facilities for the confinement and care of prisoners; and annulling a regulation of the Department of Corrections that limits the purposes for which an agreement with a private agency may be entered into. 1996-01-17 House Journal Page 2471 HB 429 was read the first time and referred to the Judiciary and Finance Committees. CONSIDERATION OF THE DAILY CALENDAR LEGISLATIVE CITATIONS Representative Vezey moved and asked unanimous consent that the House approve the citations on the calendar. There being no objection, the following citations were approved and sent to enrolling: Honoring - Emelie Cherry By Representatives Robinson, Elton, Davies, B.Davis, Ivan, James, Kubina, Mackie, Rokeberg, Sanders, Willis; Senator Duncan Honoring - Alaska School Nurses By Senator Salo; Representatives Phillips, Brice, Bunde, Davies, B.Davis, G.Davis, Elton, Green, Grussendorf, Hanley, Ivan, James, Kohring, Kubina, Mackie, Masek, Mulder, Navarre, Parnell, Porter, Robinson, Rokeberg, Sanders, Therriault, Toohey, Vezey, Willis Honoring - Golden Valley Electric Association By Senators Sharp, Miller; Representatives Kelly, Phillips, Barnes, Brice, Davies, B.Davis, Elton, Green, Ivan, James, Kubina, Mackie, Mulder, Navarre, Rokeberg, Sanders, Therriault, Vezey, Willis In Memoriam - Willis Bill G. Ackerman By Representatives Brice, Davies, B.Davis, Elton, Foster, Ivan, James, Kelly, Kott, Kubina, Mackie, Robinson, Rokeberg, Sanders, Therriault, Vezey, Willis In Memoriam - Arleen Kranich By Representatives Phillips, Davies, B.Davis, Elton, Foster, Ivan, James, Kott, Kubina, Mackie, Mulder, Robinson, Rokeberg, Sanders, Toohey, Vezey, Willis 1996-01-17 House Journal Page 2472 UNFINISHED BUSINESS HB 382 The Speaker added a Finance Committee referral for the following: HOUSE BILL NO. 382 An Act extending the termination date of the Board of Dispensing Opticians; and providing for an effective date. HB 382 was removed from the Rules Committee and referred to the Finance Committee. HB 404 The Speaker added a Finance Committee referral for the following: HOUSE BILL NO. 404 An Act extending the termination date of the Board of Chiropractic Examiners; and providing for an effective date. HB 404 was removed from the Rules Committee and referred to the Finance Committee. HB 405 The Speaker added a Finance Committee referral for the following: HOUSE BILL NO. 405 An Act extending the termination date of the Board of Examiners in Optometry; and providing for an effective date. HB 405 was removed from the Rules Committee and referred to the Finance Committee. Representative Vezey moved and asked unanimous consent that the following members be excused from a call of the House. There being no objection, the members were excused as noted: Representative Ivan - from 9:00 a.m., plane time, January 22 to 1:00 p.m., January 22, 1996 1996-01-17 House Journal Page 2473 Representative B.Davis - from 6:30 a.m., plane time, January 23 to 10:00 p.m., plane time, January 29, 1996 Representative Davies - from 6:30 p.m., plane time, January 19 to 9:30 a.m., plane time, January 22, 1996 Representative Kubina - from 2:15 p.m., plane time, January 19 to 1:35 p.m., plane time, January 21, 1996 Representative Williams - from 2:25 p.m., plane time, January 18 to 10:06 p.m., plane time, January 21, 1996 Representative Vezey moved and asked unanimous consent that the House recess to a call of the Chair, for a joint session to hear an address by U.S. Senator Murkowski. There being no objection, the House recessed at 10:41 a.m. JOINT SESSION IN THE HOUSE Speaker Phillips called the House to order and, in accordance with the Uniform Rules, turned the gavel over to President Pearce who called the joint session to order at 11:48 a.m. The purpose of the joint session was to hear an address by the Honorable Frank Murkowski, U.S. Senator. President Pearce introduced the Senator's wife, Nancy Murkowski. Senator Halford moved and asked unanimous consent that the roll call of the Senate be waived and all members be shown as present. There being no objection, it was so ordered. Representative Vezey moved and asked unanimous consent that the roll call of the House be waived and all members be shown as present. There being no objection, it was so ordered. President Pearce appointed Representative Martin and Senator Sharp to escort the Senator to the joint session. 1996-01-17 House Journal Page 2474 The Senate Sergeant-at-arms announced the Senator's entrance into the House Chamber. Senator Murkowski was escorted to the rostrum and welcomed by President Pearce. Senator Murkowskis address appears in House and Senate Joint Journal Supplement No. 16. A question and answer period followed the conclusion of the Senator's speech. Senator Murkowski received a standing ovation and was escorted from the Chamber by Representative Martin and Senator Sharp. Senator Halford moved and asked unanimous consent that the joint session adjourn. There being no objection, President Pearce adjourned the joint session at 12:40 p.m. The Speaker ordered the House at ease to allow members of the Senate to leave the Chamber. IN THE HOUSE The Speaker called the House back to order at 12:41 p.m. **The presence of Representative Kubina was noted. UNFINISHED BUSINESS HB 63 Representative James added her name as cosponsor to: SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 63 An Act relating to special request licenses depicting the sport of dog mushing. 1996-01-17 House Journal Page 2475 ANNOUNCEMENTS House committee schedules are published daily under separate cover. Minority Caucus 10:00 a.m., 1/18 ADJOURNMENT Representative Vezey moved and asked unanimous consent that the House adjourn until 10:00 a.m., January 19, 1996. There being no objection, the House adjourned at 12:42 p.m.. Suzi Lowell Chief Clerk