Legislature(1995 - 1996)

1996-01-17 House Journal

Full Journal pdf

1996-01-17                     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