Legislature(2005 - 2006)CAPITOL 17
04/04/2005 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB192 | |
| SB25 | |
| HB180 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 227 | TELECONFERENCED | |
| + | HB 192 | TELECONFERENCED | |
| *+ | HB 179 | TELECONFERENCED | |
| + | SB 25 | TELECONFERENCED | |
| = | HB 180 | ||
HB 192-FISHERIES BUSINESS LICENSE; BOND CHAIR ANDERSON announced that the first order of business would be HOUSE BILL NO. 192 "An Act relating to requirements to obtain and maintain a fisheries business license; relating to security required of fish processors and primary fish buyers; and providing for an effective date." 3:44:56 PM CHUCK HARLAMERT, Juneau Section Chief, Tax Division, Alaska Department of Revenue, said HB 192 makes the licensing for fisheries business tax more responsive to taxpayer needs, improves the protections for employees and fishermen, and requires "more accountability from processors to cover the obligations that they pay to support the industry." He noted that Section 1 adds to the existing requirement to pay all taxes due under Title 43, including a marketing assessment, contributions for employment security tax, Occupational Safety and Health Administration fines, and local fisheries taxes. Mr. Harlamert said Section 2 allows taxpayers to use the same security for two separate tax years during the bridge period. Section 3 makes the bonding requirements more responsive to risks that are evidenced by taxpayer behavior. Under current law, each processor and buyer is required to present a $10,000 security bond, and under certain conditions, it can be increased to $100,000. "We found those conditions to be not responsive enough, and the bill introduces more responsiveness," he told the committee. 3:47:10 PM MR. HARLAMERT added that the bill also reduces the administrative burden for the department to attach the bond for payment of unpaid employment security taxes. A recent amendment, he said, adds tenders in as bond beneficiaries. REPRESENTATIVE ROKEBERG asked if the department has asked underwriters if they will write bonds for these amounts. MR. HARLAMERT answered that before the department drafted the bill, it surveyed 11 bond providers. Bonds are an extension of credit, he noted, and when the bond level is increased, the taxpayer will have to come up with extra cash. 3:49:01 PM REPRESENTATIVE ROKEBERG asked, "Are we raising the initial bond amount on all processors?" MR. HARLAMERT said there is no change to existing processors in the basic bond level or the right to use real property in lieu of bonds. He said the change is that the requirement for a bond increase is easier under the proposal, and the right to use real property is restricted to those processors who don't have a record of failing to pay fishermen, employees or tenders. 3:49:54 PM REPRESENTATIVE ROKEBERG asked if the bonds are increased for those with a history of not paying. MR. HARLAMERT said if someone has a judgment from a fisherman, an employee, or a tender in excess of $10,000, the bond will be increased from the $10,000 level to $50,000 under this bill. He added that the mere existence of that judgment now triggers the increase. 3:50:55 PM REPRESENTATIVE ROKEBERG said currently if the licensee satisfies the judgment, then he or she won't have to pay the increased bond. MR. HARLAMERT said that is exactly how it works. "If they pay it directly, under current law, they escape the consequence of having their bond level increase." REPRESENTATIVE ROKEBERG asked if a more common problem is a major default or bankruptcy. MR. HARLAMERT said, yes, "under current law they do simply pay it directly," escaping the consequence. There is no limit on the amount of times that can happen, he said. REPRESENTATIVE ROKEBERG asked if the security bond is for failure to make wage payments. 3:52:34 PM MR. HARLAMERT said under current law, the bond covers unpaid wages, fishermen who weren't paid for their fish, and unpaid employment security contributions. Now tender operators are added, he explained. REPRESENTATIVE ROKEBERG said he doesn't want to add an additional burden to the beleaguered fishing industry, but $10,000 sounds like a low amount. MR. HARLAMERT said the department did not want to punish the majority of processors who are responsible. Alaska has the highest bond requirement of all other states, he noted. REPRESENTATIVE ROKEBERG spoke of an "unfortunate circumstance" of a fish buying company. "Had they had any kind of negative track record with a higher bond, or would they have been covered by this new bill?" he asked. 3:53:49 PM MR. HARLAMERT said HB 192 would have made a substantial difference in the amount of funds available to protect employees and fishermen in that case. GREY MITCHELL, Director, Division of Labor Standards and Safety, Department of Labor & Workforce Development, said his department supports the bill. 3:54:53 PM REPRESENTATIVE ROKEBERG asked if there are similar bonds required under other licensed industries. MR. MITCHELL said general and specialty contractors also have a bond that can be used to satisfy the costs of labor. 3:56:26 PM REPRESENTATIVE GUTTENBERG asked if processors are singled out because of historical problems. 3:56:59 PM MR. MITCHELL said it was a big problem last year. There were two or three large processors with significant problems paying fishermen, employees, and suppliers. He said those are what caused the state to look at bond and licensing requirements. 3:58:09 PM PATRICK SHIER, Acting Deputy Director, Division of Employment Security, Department of Labor and Workforce Development, said he is also Chief of Unemployment Insurance in the department. He stated that he supports HB 192. 3:58:48 PM CHAIR ANDERSON asked if there is any opposition to the bill. MR. SHIER said he hasn't heard any. REPRESENTATIVE ROKEBERG said the committee packet contained little input from the public. CHAIR ANDERSON said he assumed if there was opposition, the committee would have heard about it. It already passed out of the House Special Committee on Fisheries, he noted. REPRESENTATIVE LEDOUX said she couldn't remember if there was outside testimony when the fisheries committee heard the bill. She added that it is based on a couple of "really, really bad" incidents, so the committee supported it. 4:01:04 PM REPRESENTATIVE LEDOUX moved to report HB 192 out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, HB 192 moved out of the House Labor and Commerce Standing Committee.
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