Legislature(2005 - 2006)HOUSE FINANCE 519

05/03/2005 01:30 PM FINANCE


Download Mp3. <- Right click and save file as

* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 186 PERMANENT FUND: QUARTERLY PAYMENTS TELECONFERENCED
Heard & Held
+ SB 133 AVIATION ADVISORY BOARD TELECONFERENCED
Moved Out of Committee
+ SB 174 EXEMPT UHAULS FROM VEHICLE RENTAL TAX TELECONFERENCED
Moved HCS SB 174(FIN) Out of Committee
+= SB 139 OCCUPATIONAL BDS/AGENCIES TELECONFERENCED
Moved HCS CSSB 139(FIN) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                        May 3, 2005                                                                                             
                         1:49 P.M.                                                                                              
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Meyer called the House  Finance Committee meeting to                                                                   
order at 1:49:13 PM.                                                                                                          
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Mike Chenault, Co-Chair                                                                                          
Representative Kevin Meyer, Co-Chair                                                                                            
Representative Bill Stoltze, Vice-Chair                                                                                         
Representative Eric Croft                                                                                                       
Representative Richard Foster                                                                                                   
Representative Mike Hawker                                                                                                      
Representative Jim Holm                                                                                                         
Representative Reggie Joule                                                                                                     
Representative Mike Kelly                                                                                                       
Representative Carl Moses                                                                                                       
Representative Bruce Weyhrauch                                                                                                  
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Representative  Jay  Ramras; Senator  Charlie  Huggins;  Paul                                                                   
Dick, Operations  Manager, Permanent Fund  Dividend Division,                                                                   
Department  of  Revenue; Nora  Wilson,  Legislative  Liaison,                                                                   
Department of Transportation &  Public Facilities; Tom Maher,                                                                   
Staff,  Senator   Gene  Therriault;   Rick  Urion,   Director                                                                   
Occupational Licensing, Department  of Community and Economic                                                                   
Development; Pat  Davidson, Legislative Auditor,  Legislative                                                                   
Audit  Division; John  Norris, President,  U-Haul Company  of                                                                   
Alaska, Anchorage                                                                                                               
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Kip  Knudson, Deputy  Commissioner,  Aviation, Department  of                                                                   
Transportation & Public Facilities,  Anchorage; Joanna Bales,                                                                   
Program Manager, Vehicle Revenue  Tax Division, Department of                                                                   
Revenue, Anchorage;  Sydni Swenson,  U-Haul, North  Pole; Tom                                                                   
George,  Aircraft  Owners  and   Pilots  Association  (AOPA),                                                                   
Anchorage                                                                                                                       
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 186    An  Act   relating  to  quarterly  payments   of  a                                                                   
          permanent fund dividend, and to a permanent fund                                                                      
          dividend and eligibility for public assistance;                                                                       
          and providing for an effective date.                                                                                  
                                                                                                                                
          HB 186 was HEARD and HELD in Committee for further                                                                    
          consideration.                                                                                                        
                                                                                                                                
SB 133    An  Act establishing  the Aviation Advisory  Board;                                                                   
          and providing for an effective date.                                                                                  
                                                                                                                                
          SB 133 was reported out of Committee with a "do                                                                       
          pass"  recommendation   and  a  zero  note  by  the                                                                   
          Department of Transportation & Public Facilities.                                                                     
                                                                                                                                
CS SB 139(L&C)                                                                                                                  
          An  Act relating  to termination  and oversight  of                                                                   
          boards,    commissions,   and   agency    programs;                                                                   
          extending  the  termination date  of  the Board  of                                                                   
          Marital  and Family Therapy;  and providing  for an                                                                   
          effective date.                                                                                                       
                                                                                                                                
          HCS CS  SB 139 (FIN) was reported  out of Committee                                                                   
          with a "no recommendation"  and with fiscal note #1                                                                   
          by   the  Department   of  Commerce,  Community   &                                                                   
          Economic Development.                                                                                                 
                                                                                                                                
SB 174    An   Act   excluding   certain  trucks   from   the                                                                   
          definition  of 'passenger vehicle' for  purposes of                                                                   
          the  passenger vehicle  rental  tax; and  providing                                                                   
          for an effective date.                                                                                                
                                                                                                                                
          HCS  SB 174  (FIN) was  reported  out of  Committee                                                                   
          with a  "do pass" recommendation, with  fiscal note                                                                   
          #1  by  the  Department  of  Revenue  and  a  House                                                                   
          Concurrent Resolution  to address the title change.                                                                   
                                                                                                                                
                                                                                                                                
HOUSE BILL NO. 186                                                                                                            
                                                                                                                                
     An  Act relating  to quarterly payments  of a  permanent                                                                   
     fund  dividend, and  to a  permanent  fund dividend  and                                                                   
     eligibility for public assistance;  and providing for an                                                                   
     effective date.                                                                                                            
                                                                                                                                
1:51:34 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JAY  RAMRAS,   SPONSOR,  explained  that  the                                                                   
Permanent Fund Dividend (PFD)  has been and continues to be a                                                                   
boon  to the  Alaskan economy  for the  past 22  years.   The                                                                   
program  allows Alaskans  to enjoy  part of  the State's  oil                                                                   
revenue.  Since  the time of inception, many  businesses have                                                                   
profited from  running sales  near the  time the dividend  is                                                                   
distributed.   Often,  citizens will use  their dividends  to                                                                   
make  down   payments  on  high-end  consumer   products  and                                                                   
effectively  end  up with  more  debt  than they  would  have                                                                   
incurred had they not received a PFD in the first place.                                                                        
                                                                                                                                
He  pointed out  that  HB 186  allows  eligible residents  to                                                                   
electronically  receive  their dividend  and  the ability  to                                                                   
elect to  receive their payments in  either in a lump  sum or                                                                   
to divide  their dividend income  into four equal,  quarterly                                                                   
payments.   Under HB  186, the  program takes effect  January                                                                   
2006.                                                                                                                           
                                                                                                                                
Representative  Ramras  thought  that HB  186  would  provide                                                                   
citizens an  opportunity to  financially help themselves  and                                                                   
their  families  throughout  the year.    However,  quarterly                                                                   
payments  are  not recommended  for  those  receiving  public                                                                   
assistance  because payouts, especially  for multiple  family                                                                   
members,  could  interfere  with   available  federal  public                                                                   
assistance.                                                                                                                     
                                                                                                                                
2:01:30 PM                                                                                                                    
                                                                                                                                
Vice-Chair Stoltze asked how it  would affect "hold harmless"                                                                   
provisions.   Representative Ramras reiterated  that the bill                                                                   
was not  designed  for a person  on public  assistance.   The                                                                   
State has  exclusions for someone  in that program  and there                                                                   
would be  a disclaimer  on the form  for residents  on public                                                                   
assistance.   He  stated  the legislation  would  be a  "good                                                                   
deal" for  most and could  bring a "savings-stability".   The                                                                   
program  could  be voluntary  in  nature  and  administrative                                                                   
costs would include postage.                                                                                                    
                                                                                                                                
2:04:21 PM                                                                                                                    
                                                                                                                                
Vice-Chair Stoltze questioned  how much the legislation would                                                                   
keep in the  State's economy.  Representative  Ramras had not                                                                   
requested any  studies on that;  however, felt  strongly that                                                                   
there are many middle-income families that will benefit.                                                                        
                                                                                                                                
2:06:20 PM                                                                                                                    
                                                                                                                                
Representative Holm asked about  the possibility of receiving                                                                   
monthly  payments.    Representative  Ramras  commented  that                                                                   
monthly payments  would affect the  cost of the  fiscal note.                                                                   
Also, he did not  think it would help as much  as a budgeting                                                                   
tool for those in the middle-income bracket.                                                                                    
                                                                                                                                
2:07:41 PM                                                                                                                    
                                                                                                                                
Representative Holm asked if the  legislation resulted from a                                                                   
constituent  request.   Representative  Ramras said  no.   He                                                                   
pointed out  that many  seniors used  to use their  longevity                                                                   
bonus as a household budgeting tool.                                                                                            
                                                                                                                                
2:08:23 PM                                                                                                                    
                                                                                                                                
Representative  Holm  asked  Representative   Ramras  why  he                                                                   
thought  that people,  who do  not handle  their money  well,                                                                   
would opt  for the proposed  program.  Representative  Ramras                                                                   
replied that  the program was  designed for people  who would                                                                   
like to  handle their money better.   He emphasized  it would                                                                   
be a voluntary program.                                                                                                         
                                                                                                                                
2:10:40 PM                                                                                                                    
                                                                                                                                
Representative  Foster  thought the  legislation  was a  good                                                                   
idea, however, questioned if residents  in his district could                                                                   
receive  their dividends  mailed  rather than  electronically                                                                   
deposited.  He  thought mailing could be cost  prohibitive to                                                                   
the  Department of  Revenue.   Representative  Ramras  agreed                                                                   
that  mailing  would create  a  significant fiscal  note  and                                                                   
would make it cost prohibitive.                                                                                                 
                                                                                                                                
2:12:17                                                                                                                       
                                                                                                                                
Representative Kelly  agreed that it  would be good  for some                                                                   
folks to receive  monthly checks to cover the  costs for bill                                                                   
paying.  Representative Ramras  attempted to demonstrate that                                                                   
the legislation  could pay for  itself.  He believed  that if                                                                   
the program  did catch  on, it  could be  broadened out  to a                                                                   
monthly  base payment,  and  noted that  quarterly  dividends                                                                   
were modeled after the way stocks generate their dividends.                                                                     
                                                                                                                                
2:14:19 PM                                                                                                                    
                                                                                                                                
Representative  Foster indicated that  from the fiscal  note,                                                                   
it appears  it would  cost the State  of Alaska,  fifty cents                                                                   
($.50)  for  each family  member.    He mentioned  that  many                                                                   
villagers  from his area  would not  qualify for the  program                                                                   
but would  still be required  to pay.  Representative  Ramras                                                                   
advised that the  fiscal note indicates the  amount needed to                                                                   
set up the program.  He pointed  out another note, indicating                                                                   
the offset income  expected.  Representative  Ramras believed                                                                   
it could be  a positive note in  the future.  The  cost would                                                                   
be bore by the General Fund not the Permanent Fund.                                                                             
                                                                                                                                
2:16:46 PM                                                                                                                    
                                                                                                                                
Representative   Hawker  addressed  Representative   Foster's                                                                   
concern.   He pointed  out that the  funding source  would be                                                                   
Permanent  Fund earnings;  however, the  manner in which  the                                                                   
dividend  calculation works,  the amount  would be taken  off                                                                   
the top.   The effect would be  on the dividend and  in years                                                                   
forward, the amount would receive  earnings lost from the use                                                                   
of that money.                                                                                                                  
                                                                                                                                
2:17:39 PM                                                                                                                    
                                                                                                                                
Vice-Chair Stoltze asked how long  it would take to determine                                                                   
if the program was working.  Representative  Ramras suggested                                                                   
five years as an appropriate sunset date.                                                                                       
                                                                                                                                
Vice-Chair Stoltze  inquired about Child  Support Enforcement                                                                   
garnishment.   Representative Ramras acknowledged  that was a                                                                   
concern for the banks by taking  the Department of Revenue to                                                                   
task.                                                                                                                           
                                                                                                                                
Vice-Chair  Stoltze  worried   about  the  child  enforcement                                                                   
dynamics.    Representative  Ramras understood  that  if  the                                                                   
person  was a  "garnishee", the  computer  system would  then                                                                   
recognize that and reject them.                                                                                                 
                                                                                                                                
2:21:59 PM                                                                                                                    
                                                                                                                                
Co-Chair Chenault asked if it  would be mandatory to get four                                                                   
payments  rather than  one per year.   Representative  Ramras                                                                   
replied that  garnishes would not  be able to  participate in                                                                   
the program  at all.   The Department  of Revenue  determines                                                                   
the route for the garnishment  procedures and that the option                                                                   
remains for one payment per year.                                                                                               
                                                                                                                                
Co-Chair  Chenault referenced  the  fiscal garnishment  costs                                                                   
and  understood   the  costs  would  be   handled  quarterly.                                                                   
Representative Ramras did not know.                                                                                             
                                                                                                                                
2:23:58 PM                                                                                                                    
                                                                                                                                
PAUL  DICK,  OPERATIONS  MANAGER,   PERMANENT  FUND  DIVIDEND                                                                   
DIVISION,   DEPARTMENT   OF  REVENUE,   addressed   HB   186,                                                                   
clarifying  that the program  would be  optional.   Dividends                                                                   
would be  paid October, January,  April, and July.   A person                                                                   
would  not qualify  if  garnished  and that  any  garnishment                                                                   
would be honored in full.                                                                                                       
                                                                                                                                
2:25:44 PM                                                                                                                    
                                                                                                                                
Mr. Dick  addressed an  additional garnishment, the  Internal                                                                   
Revenue Service (IRS) withholding.   There are situations, in                                                                   
which someone  might qualify for  the quarterly  dividend and                                                                   
then  subsequently  become  garnished by  the  Child  Support                                                                   
Agency.    If  there  were  a   garnishment  on  record,  the                                                                   
Department would  take whatever  remains in that  account and                                                                   
would pay  the remainder for  the garnishment.   Essentially,                                                                   
it pulls them from the quarterly option.                                                                                        
                                                                                                                                
Mr.  Dick stated  that the  fiscal  note was  based on  5,000                                                                   
people using  the option, approximately  1% of  the applicant                                                                   
population.     Interest  earnings  were  calculated   at  2%                                                                   
interest.                                                                                                                       
                                                                                                                                
2:27:39 PM                                                                                                                    
                                                                                                                                
Mr. Dick mentioned  the monthly provisions, finding  that the                                                                   
quarterly amount changed from  $12 dollars to $40 dollars per                                                                   
year,  per  person  participating.    He  offered  to  answer                                                                   
questions of the Committee.                                                                                                     
                                                                                                                                
2:28:13 PM                                                                                                                    
                                                                                                                                
Co-Chair Chenault  referenced the  garnishment pay out.   Mr.                                                                   
Dick reiterated  that the  garnishment would  be paid  in the                                                                   
amount remaining in the person's quarterly account.                                                                             
                                                                                                                                
2:29:14 PM                                                                                                                    
                                                                                                                                
Co-Chair  Meyer  noted  that   the  bill  would  be  held  in                                                                   
Committee for further consideration  and discussion regarding                                                                   
the merit.                                                                                                                      
                                                                                                                                
Co-Chair  Chenault  referenced  back up  regarding  the  hold                                                                   
harmless  insertion.   Representative  Ramras  said that  the                                                                   
Division  of Public  Assistance will  provide the  disclaimer                                                                   
and that those recipients would  be informed that they do not                                                                   
qualify.                                                                                                                        
                                                                                                                                
2:30:44 PM                                                                                                                    
                                                                                                                                
Representative   Weyhrauch  asked   about  quarterly   liens.                                                                   
Representative  Ramras   responded  that  it   would  be  the                                                                   
aggregate  amount.   He added,  there  is only  one time  per                                                                   
year, a person could make the garnishment claim.                                                                                
                                                                                                                                
2:31:52 PM                                                                                                                    
                                                                                                                                
Representative    Kelly   continued    questions    regarding                                                                   
garnishment  concerns.  Representative  Ramras explained  the                                                                   
garnishment  claim  filing  system,  adding  that  if  person                                                                   
missed the deadline for filing  their application, they would                                                                   
not be able to collect the remaining quarterly portion.                                                                         
                                                                                                                                
2:32:52 PM                                                                                                                    
                                                                                                                                
In  response  Representative   Kelly,  Representative  Ramras                                                                   
explained that any creditor would  be able to garnish 100% of                                                                   
what is due them.                                                                                                               
                                                                                                                                
2:33:57 PM                                                                                                                    
                                                                                                                                
Representative Ramras  urged that the  bill not be  placed in                                                                   
the   "back  seat"   of   the   Committee.     He   requested                                                                   
reconsideration in a timely manner.                                                                                             
                                                                                                                                
2:34:50 PM                                                                                                                    
                                                                                                                                
HB 186 was HELD in Committee for further consideration.                                                                         
                                                                                                                                
2:35:14 PM                                                                                                                    
                                                                                                                                
SENATE BILL NO. 174                                                                                                           
                                                                                                                                
     An Act excluding  certain trucks from the  definition of                                                                   
     'passenger  vehicle'  for   purposes  of  the  passenger                                                                   
     vehicle  rental  tax;  and providing  for  an  effective                                                                   
     date.                                                                                                                      
                                                                                                                                
SENATOR CHARLIE HUGGINS, SPONSOR,  noted that SB 174 had been                                                                   
introduced   to   correct  an   unintended   consequence   of                                                                   
legislation passed  in 2003.   At that time, the  Legislature                                                                   
passed  HB 271  as a  tourism-based tax  on passenger  rental                                                                   
cars  and recreational  vehicles.   The  purpose  was to  tax                                                                   
visitors using the  road system, not local citizens.   HB 271                                                                   
has negatively impacted:                                                                                                        
                                                                                                                                
*    Alaska citizens needing to move,                                                                                           
*    Local independent outlets, and                                                                                             
*    Cnsumer truck rental business.                                                                                             
                                                                                                                                
Senator  Huggins added  that the  Department  of Revenue  has                                                                   
assessed  the  tourism-based  tax  on  all  rental  vehicles,                                                                   
including trucks less than 26,000  pounds.  Interpretation of                                                                   
the law has resulted  in a 10% tax applied  to businesses and                                                                   
citizens renting trucks.   The 10% State tax,  along with the                                                                   
local  municipal  and city  taxes,  add considerably  to  the                                                                   
total rental fee.                                                                                                               
                                                                                                                                
In  2004, HB  347 was  introduced to  correct the  unintended                                                                   
consequence created by HB 271.   It provided an exemption for                                                                   
taxicabs.  That  corrective legislation was  signed into law.                                                                   
SB 174 ensures that the tax applies  more specifically to the                                                                   
intended target  of visitors  renting passenger vehicles  and                                                                   
recreational vehicles,  rather than the unintended  target of                                                                   
Alaska businesses and citizens  who rely on truck rentals for                                                                   
the  continued flow  of commerce  and  movement of  household                                                                   
goods.                                                                                                                          
                                                                                                                                
2:37:41 PM                                                                                                                    
                                                                                                                                
Representative  Weyhrauch commented that  the intent  was not                                                                   
to  assess  a   tax  charge  on  commercial   vehicles.    He                                                                   
questioned   if   it   would    reign-in   the   Department's                                                                   
interpretation of  the tax.  Senator Huggins  explained there                                                                   
was no  ill intended approach  on the Department  of Revenue.                                                                   
The target of HB  271 was a not "self-move"  type vehicle and                                                                   
that SB 174 would correct it.                                                                                                   
                                                                                                                                
Representative  Hawker commented on  passage of the  previous                                                                   
legislation  and the  impact  SB 174  would  have.   Co-Chair                                                                   
Meyer  agreed  with the  assessment  made  by  Representative                                                                   
Hawker and  that the  original intent was  not to  tax U-Haul                                                                   
trucks.                                                                                                                         
                                                                                                                                
2:40:08 PM                                                                                                                    
                                                                                                                                
JOHN NORRIS, PRESIDENT, U-HAUL  COMPANY OF ALASKA, ANCHORAGE,                                                                   
spoke in  support of  the proposed  legislation.  He  pointed                                                                   
out  that HB  271  has impacted  Alaska  citizens needing  to                                                                   
move.  The consumer  does have other options  for moving that                                                                   
are not taxed.  He reiterated  the history and the impacts of                                                                   
the  previous  legislation.    He acknowledged  that  SB  174                                                                   
provides relief for trucks that has been given to taxicabs.                                                                     
                                                                                                                                
Mr.  Norris pointed  out that  the  Alaska Trucking  Industry                                                                   
supports the legislation.                                                                                                       
                                                                                                                                
2:44:55 PM                                                                                                                    
                                                                                                                                
SYDNI SWENSON, (TESTIFIED VIA  TELECONFERENCE), U-HAUL, NORTH                                                                   
POLE, voiced support for SB 174.                                                                                                
                                                                                                                                
2:46:39 PM                                                                                                                    
                                                                                                                                
Representative Hawker MOVED to  ADOPT Amendment #1.  Co-Chair                                                                   
Meyer OBJECTED.                                                                                                                 
                                                                                                                                
Representative  Hawker   explained  that  Amendment   #1  was                                                                   
offered  on behalf  of  the House  sponsor  of the  companion                                                                   
Senate   bill.     The  amendment   provides  an   additional                                                                   
exemption;  "vehicles  provided   by  automobile  dealers  as                                                                   
replacement   transportation  during   warranty  or   service                                                                   
contract  repairs".    He  acknowledged  that  the  amendment                                                                   
involves a  title change but that  it would not  endanger the                                                                   
substance of SB 174.                                                                                                            
                                                                                                                                
2:51:10 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer  inquired the impact the amendment  would have                                                                   
on the Department of Revenue.                                                                                                   
                                                                                                                                
JOANNA   BALES,  (TESTIFIED   VIA  TELECONFERENCE),   PROGRAM                                                                   
MANAGER,   VEHICLE  REVENUE  TAX   DIVISION,  DEPARTMENT   OF                                                                   
REVENUE, ANCHORAGE, indicated  that they do not have the data                                                                   
necessary to determine the amount.                                                                                              
                                                                                                                                
2:52:40 PM                                                                                                                    
                                                                                                                                
Co-Chair    Meyer    requested   the    amount    anticipated                                                                   
collected.   Ms. Bales  said it  would be  small.  There  are                                                                   
only six other states that have  their own vehicle rental tax                                                                   
and it appears it is a 50/50 exemption.   Co-Chair Meyer knew                                                                   
that the  City of Anchorage  has a car  rental tax;  he asked                                                                   
how they dealt with such situations.   Ms. Bales replied that                                                                   
they do exempt U-Haul vehicles.                                                                                                 
                                                                                                                                
2:53:53 PM                                                                                                                    
                                                                                                                                
Co-Chair Chenault asked about  the replacement transportation                                                                   
service contracts  and if they  would include rentals  from a                                                                   
dealer  during the time  of repairs.   Representative  Hawker                                                                   
understood that was not accommodated.                                                                                           
                                                                                                                                
2:54:59 PM                                                                                                                    
                                                                                                                                
Co-Chair  Meyer  asked  if  Senator   Huggins  supported  the                                                                   
amendment.   Senator Huggins responded  that he hoped  it was                                                                   
"friendly" and that he would support it.                                                                                        
                                                                                                                                
2:57:09 PM                                                                                                                    
                                                                                                                                
Representative Holm  asked if Amendment #1 would  generate an                                                                   
indeterminate fiscal  note.  Co-Chair Meyer  thought it would                                                                   
be slightly higher than the one provided.                                                                                       
                                                                                                                                
2:57:47 PM                                                                                                                    
                                                                                                                                
Representative  Hawker   pointed  out  that  Ms.   Bales  had                                                                   
indicated   that   the  information   was   not   immediately                                                                   
forthcoming.   Ms.  Bales  explained it  would  be a  minimal                                                                   
impact on  the rental tax and  that the existing  note should                                                                   
be sufficient.                                                                                                                  
                                                                                                                                
2:59:37 PM                                                                                                                    
                                                                                                                                
Vice-Chair Stoltze inquired if  the language was broad enough                                                                   
to  cover recall.   Representative  Hawker  thought a  recall                                                                   
activity would be part of the warranty process.                                                                                 
                                                                                                                                
3:00:53 PM                                                                                                                    
                                                                                                                                
Representative Weyhrauch stated  that there are no guarantees                                                                   
with  the proposed  language.   A service  contract does  not                                                                   
necessarily include a recall.                                                                                                   
                                                                                                                                
Representative  Hawker suggested  amending  the amendment  by                                                                   
adding, "recall".                                                                                                               
                                                                                                                                
3:01:32 PM                                                                                                                    
                                                                                                                                
Vice-Chair Stoltze  MOVED the friendly amendment  proposed by                                                                   
Representative  Hawker.   There  being NO  OBJECTION, it  was                                                                   
amended.                                                                                                                        
                                                                                                                                
3:02:12 PM                                                                                                                    
                                                                                                                                
Co-Chair  Meyer  WITHDREW  his  OBJECTION.   There  being  NO                                                                   
further OBJECTION, amended Amendment #1 was adopted.                                                                            
                                                                                                                                
Representative Kelly MOVED to  REPORT HCS SB 174 (FIN) out of                                                                   
Committee  with  individual  recommendations   and  with  the                                                                   
accompanying fiscal  note.  There being NO  OBJECTION, it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
HCS SB  174 (FIN) was  reported out of  Committee with  a "do                                                                   
pass" recommendation,  with fiscal note #1 by  the Department                                                                   
of Revenue and  a House Concurrent Resolution  to address the                                                                   
title change.                                                                                                                   
                                                                                                                                
3:03:51 PM                                                                                                                    
                                                                                                                                
SENATE BILL NO. 133                                                                                                           
                                                                                                                                
     An Act establishing the Aviation Advisory Board; and                                                                       
     providing for an effective date.                                                                                           
                                                                                                                                
NORA    WILSON,    LEGISLATIVE   LIAISON,    DEPARTMENT    OF                                                                   
TRANSPORTATION &  PUBLIC FACILITIES, explained  that the bill                                                                   
would  establish  a  permanent   advisory  board  within  the                                                                   
Department of  Transportation and  Public Facilities  to make                                                                   
recommendations  to  the  Commissioner  with respect  to  the                                                                   
Department's aviation functions.                                                                                                
                                                                                                                                
The permanent  board would have  the same composition  as the                                                                   
current  10-member  interim board,  with  representatives  of                                                                   
various  stakeholders  in  aviation matters.    However,  one                                                                   
additional  board member would  be added,  to provide  for an                                                                   
uneven number  of members to avoid  tie votes.   The Governor                                                                   
would appoint the  board to staggered three-year  terms.  The                                                                   
existing   interim   board  members   would   serve   without                                                                   
compensation  other   than  travel  coverage  and   per  diem                                                                   
expenses.                                                                                                                       
                                                                                                                                
Ms.  Wilson   concluded   that  SB  133   would  afford   the                                                                   
Commissioner  of  the  Department  valuable  input  from  the                                                                   
perspective  of the  aviation  industry and  the two  largest                                                                   
airport  hub   communities  regarding  aviation   policy  and                                                                   
management.   It would ensure  that those stakeholders  would                                                                   
have   an   ongoing   opportunity    to   advise   and   make                                                                   
recommendations to the Commissioner.  She urged support.                                                                        
                                                                                                                                
3:06:45 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Stoltze  asked  for   a  list  of  current  board                                                                   
membership.                                                                                                                     
                                                                                                                                
3:07:10 PM                                                                                                                    
                                                                                                                                
KIP   KNUDSON,   (TESTIFIED   VIA   TELECONFERENCE),   DEPUTY                                                                   
COMMISSIONER,  AVIATION,   DEPARTMENT  OF   TRANSPORTATION  &                                                                   
PUBLIC FACILITIES, ANCHORAGE, listed the members:                                                                               
                                                                                                                                
*    Dan Klase  - Representing  the unorganized  community of                                                                   
     Beetles                                                                                                                    
*    James Dodson - Fairbanks                                                                                                   
*    William   Flower,   President,   Northern   Air   Cargo,                                                                   
     Anchorage                                                                                                                  
*    Bob Jacobsen, Owner, Wings Alaska, Juneau                                                                                  
*    Paul  Landis,   Senior  Vice-President,   ERA  Aviation,                                                                   
     Anchorage                                                                                                                  
*    Felix Maguire,  Government Affairs Coordinator,  Alaskan                                                                   
     Airman's Association                                                                                                       
*    Wilbur O'Brien, Past President, ERA Aviation                                                                               
*    Mayor  Mike  Salazar,  Former  President,  Air  Carriers                                                                   
     Association, Ketchikan                                                                                                     
*    Richard Wien, Name Says it All                                                                                             
*    Kim Lythgoe, Manager, Cargo Port, Anchorage                                                                                
                                                                                                                                
3:08:36 PM                                                                                                                    
                                                                                                                                
Vice-Chair Stoltze  asked about  the definition  of statewide                                                                   
membership.   Mr. Knudson  explained that  the intent  was to                                                                   
allow an appointment from anywhere within the State.                                                                            
                                                                                                                                
Vice-Chair  Stoltze  asked about  any  mayor  representatives                                                                   
having a  conflict of  interest.   Mr. Knudson replied  there                                                                   
has not yet been a problem.                                                                                                     
                                                                                                                                
3:11:34 PM                                                                                                                    
                                                                                                                                
Representative  Hawker asked  about  fiscal note  #2 for  the                                                                   
interim advisory board  created in 2003.  He  wondered why an                                                                   
increase was needed when the current  system has worked well.                                                                   
Mr. Knudson thought there would  be some expense involved and                                                                   
that  to date,  coverage  has  come from  the  Office of  the                                                                   
Commissioner.                                                                                                                   
                                                                                                                                
3:13:17 PM                                                                                                                    
                                                                                                                                
Co-Chair Chenault referenced both  fiscal notes.  Mr. Knudson                                                                   
clarified  that  originally  the   Department  requested  $20                                                                   
thousand dollars  through the  operating budget.   The Senate                                                                   
removed  that from  the operating  budget and  then a  fiscal                                                                   
note was forwarded to accompany the bill.                                                                                       
                                                                                                                                
3:14:59 PM                                                                                                                    
                                                                                                                                
TOM GEORGE,  (TESTIFIED VIA TELECONFERENCE),  AIRCRAFT OWNERS                                                                   
AND PILOTS  ASSOCIATION (AOPA),  ANCHORAGE, spoke  in support                                                                   
of SB 133 and urged the Committee to pass it.                                                                                   
                                                                                                                                
3:17:20 PM                                                                                                                    
                                                                                                                                
Representative  Hawker MOVED to  zero out  fiscal note  #2 by                                                                   
the Department  of Transportation and Public  Facilities.  He                                                                   
pointed  out that  it has  operated  for the  past two  years                                                                   
within the Department's budget  and believed that it could be                                                                   
accommodated as such in next year's budget.                                                                                     
                                                                                                                                
3:19:33 PM                                                                                                                    
                                                                                                                                
Representative Joule questioned  the effectiveness of a board                                                                   
with a  zero note.   Representative  Hawker responded  it was                                                                   
not his  intent to harm  the board in  any way.   He believed                                                                   
that  the  Department  could continue  to  manage  the  board                                                                   
without the additional fiscal expense.                                                                                          
                                                                                                                                
There being NO OBJECTION, fiscal note #2 was zeroed out.                                                                        
                                                                                                                                
Vice-Chair Stoltze  MOVED to REPORT  SB 133 out  of Committee                                                                   
with  individual recommendations  and  with the  accompanying                                                                   
fiscal note.  There being NO OBJECTION, it was so ordered.                                                                      
                                                                                                                                
SB  133  was reported  out  of  Committee  with a  "do  pass"                                                                   
recommendation  and   a  zero  note  by  the   Department  of                                                                   
Transportation & Public Facilities.                                                                                             
                                                                                                                                
3:22:50 PM                                                                                                                    
                                                                                                                                
CS FOR SENATE BILL NO. 139(L&C)                                                                                               
                                                                                                                                
     An Act relating to termination  and oversight of boards,                                                                   
     commissions,   and   agency  programs;   extending   the                                                                   
     termination  date of  the  Board of  Marital and  Family                                                                   
     Therapy; and providing for an effective date.                                                                              
                                                                                                                                
Representative  Hawker  asked   Mr.  Maher  to  describe  the                                                                   
history of the bill and the accompanying amendment.                                                                             
                                                                                                                                
TOM MAHER,  STAFF, SENATOR  GENE THERRIAULT, related  changes                                                                   
in the  bill.   He noted  that the House  Labor and  Commerce                                                                   
Committee  had   deleted  two  sections  of   the  bill  that                                                                   
addressed  when a board  termination and  clarified that  the                                                                   
transfer of  authority for regulatory disciplinary  powers to                                                                   
the  Department  of  Commerce.    While  the  Department  has                                                                   
assumed  that responsibility,  the  statutes clearly  provide                                                                   
the Department authority  to do so.  The  proposed provisions                                                                   
help address  the uncertainty, stemming from  recommendations                                                                   
by the Division of Legislative Audit.                                                                                           
                                                                                                                                
3:23:52 PM                                                                                                                    
                                                                                                                                
Representative Hawker asked why  the changes had been made in                                                                   
the House  Labor and Commerce  Committee version.   Mr. Maher                                                                   
responded that  all necessary testimony had not  been present                                                                   
at  that  meeting  to adequately  explain  the  change.    He                                                                   
deferred to Pat Davidson, Legislative Audit.                                                                                    
                                                                                                                                
3:24:25 PM                                                                                                                    
                                                                                                                                
PAT   DAVIDSON,  LEGISLATIVE   AUDITOR,   LEGISLATIVE   AUDIT                                                                   
DIVISION, explained that sun setting  the board would make it                                                                   
so that no new professions could  enter into that category or                                                                   
the  whole  profession  might  no longer  exist  in  statute.                                                                   
Additionally,   when  the  board   leaves,  the   regulations                                                                   
disappear.                                                                                                                      
                                                                                                                                
3:27:02 PM                                                                                                                    
                                                                                                                                
Representative Hawker MOVED to  ADOPT Amendment #1.  (Copy on                                                                   
File).  Co-Chair  Chenault OBJECTED for  discussion purposes.                                                                   
He  asked if  that  language would  be  seen  in every  board                                                                   
statute.                                                                                                                        
                                                                                                                                
Representative  Hawker stated  that the legislative  auditor,                                                                   
in  the  Audit  of  the  Alaska  Sunset  Process  and  Select                                                                   
Investigative  Issues,  recommended   that  the  Legislature,                                                                   
"clarify  responsibility  for  regulation,  in  the  even  an                                                                   
occupational  licensing  board  terminates".    The  proposed                                                                   
language was brought forth by  Legislative Legal Division and                                                                   
is supported by the Department.                                                                                                 
                                                                                                                                
Ms. Davidson  responded  that the amendment  was directed  to                                                                   
the centralized licensing statute  and therefore, would apply                                                                   
to all boards under Occupational  Licensing.  It would not be                                                                   
included in the profession statutes.                                                                                            
                                                                                                                                
3:28:00 PM                                                                                                                    
                                                                                                                                
Representative  Kelly  asked  if the  Division  of  Licensing                                                                   
supported the amendment.                                                                                                        
                                                                                                                                
3:28:24 PM                                                                                                                    
                                                                                                                                
RICK URION,  DIRECTOR, OCCUPATIONAL LICENSING,  DEPARTMENT OF                                                                   
COMMUNITY   AND   ECONOMIC  DEVELOPMENT,   noted   that   the                                                                   
Department  supported  the language  of  the  amendment.   He                                                                   
urged members to pass the amended bill from Committee.                                                                          
                                                                                                                                
3:29:24 PM                                                                                                                    
                                                                                                                                
Co-Chair  Chenault WITHDREW  his OBJECTION.   There  being NO                                                                   
further OBJECTION, Amendment #1 was adopted.                                                                                    
                                                                                                                                
3:29:56 PM                                                                                                                    
                                                                                                                                
Vice-Chair Stoltze  MOVED to REPORT  HCS CS SB 139  (FIN) out                                                                   
of Committee  with  individual recommendations  and with  the                                                                   
accompanying fiscal  note.  There being NO  OBJECTION, it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
HCS CS  SB 139  (FIN) was  reported out  of Committee  with a                                                                   
"no"  recommendation   and  with   fiscal  note  #1   by  the                                                                   
Department of Commerce, Community and Economic Development.                                                                     
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 3:30 P.M.                                                                                          
                                                                                                                                

Document Name Date/Time Subjects