Legislature(2009 - 2010)

04/15/2009 05:21 PM House FIN

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                    HOUSE FINANCE COMMITTEE                                                                                     
                         April 15, 2009                                                                                         
                            5:21 p.m.                                                                                           
5:21:58 PM                                                                                                                    
CALL TO ORDER                                                                                                                   
Co-Chair Hawker  called the  House Finance Committee  meeting                                                                   
to order at 5:21 p.m.                                                                                                           
MEMBERS PRESENT                                                                                                                 
Representative Mike Hawker, Co-Chair                                                                                            
Representative Bill Stoltze, Co-Chair                                                                                           
Representative Bill Thomas Jr., Vice-Chair                                                                                      
Representative Allan Austerman                                                                                                  
Representative Harry Crawford                                                                                                   
Representative Anna Fairclough                                                                                                  
Representative Richard Foster                                                                                                   
Representative Les Gara                                                                                                         
Representative Reggie Joule                                                                                                     
Representative Mike Kelly                                                                                                       
Representative Woodie Salmon                                                                                                    
MEMBERS ABSENT                                                                                                                  
ALSO PRESENT                                                                                                                    
PRESENT VIA TELECONFERENCE                                                                                                      
SB1  "An  Act   increasing  the  minimum  hourly   wage,  and                                                                   
creating  an annual  adjustment  to the  minimum hourly  wage                                                                   
based  on  the  rate  of  inflation;  and  providing  for  an                                                                   
effective date."                                                                                                                
          SB1 was SCHEDULED but not HEARD.                                                                                      
SB183  "An Act  authorizing the  Department of  Environmental                                                                   
Conservation  to   award  grants  for  the   control  of  air                                                                   
emissions  or  the  development  and  administration  of  air                                                                   
quality  control programs;  and  providing  for an  effective                                                                   
          HCS for CSSB183 was REPORTED out of committee with                                                                    
          individual recommendations and accompanying fiscal                                                                    
HB207  "An   Act  increasing   the  allowances  for   injury,                                                                   
disability,  or heart  attack  payable  from the  fisherman's                                                                   
fund; and providing for an effective date."                                                                                     
          HB207 was REPORTED out of committee with                                                                              
          recommendations of individual members.                                                                                
SB75 "An Act  making and  amending appropriations,  including                                                                   
capital  appropriations,  supplemental   appropriations,  and                                                                   
appropriations  to capitalize  funds;  and  providing for  an                                                                   
effective date."                                                                                                                
           SB75 was SCHEDULED but not HEARD.                                                                                    
HOUSE BILL NO. 207                                                                                                              
"An Act increasing the allowances  for injury, disability, or                                                                   
heart  attack   payable  from   the  fisherman's   fund;  and                                                                   
providing for an effective date."                                                                                               
5:22:07 PM                                                                                                                    
Co-Chair  Hawker  solicited  any   discussion  requests  from                                                                   
committee  members.  None  being offered,  he  discussed  the                                                                   
order of business.                                                                                                              
5:24:07 PM                                                                                                                    
JOHN  BITNEY, DIRECTOR,  LEGISLATIVE  OFFICE,  OFFICE OF  THE                                                                   
GOVERNOR  provided   a  brief   summary  of  the   bill.  The                                                                   
fisherman's  fund is  in effect a  workers compensation  fund                                                                   
for commercial fishermen.  It is financed by  fees applied to                                                                   
required  commercial  fishing  licenses  and  permits.  Since                                                                   
1959, the  amount that can be  claimed for injuries  has been                                                                   
capped  at $2,500.  Given  the rise  in  medical costs  since                                                                   
1959, the bill  would increase the claim cap  to $10,000. Mr.                                                                   
Bitney pointed  out that  currently, claims exceeding  $2,500                                                                   
must  be  taken  before  a review  board  for  validation  of                                                                   
possible compensation.                                                                                                          
5:27:54 PM                                                                                                                    
Mr. Bitney felt  that by increasing the compensation  cap the                                                                   
need for fishermen to stand before  the review board would be                                                                   
eliminated  in most cases.  This would  simplify the  process                                                                   
for fishermen attempting to receive  compensation for medical                                                                   
costs due to a work related injury.                                                                                             
JAKE HAMBURG,  STAFF TO SENATOR PASKVAN, stated  that Senator                                                                   
Paskvan supports the bill for  a number of reasons. There are                                                                   
135 commercial fishing permit  holders in the Fairbanks North                                                                   
Star borough.  He added  that commercial  fishermen  from the                                                                   
district  brought in  1.2 million  pounds of  caught fish  in                                                                   
2008  and  that  commercial  fishing   impacts  the  cost  of                                                                   
numerous things around the state.                                                                                               
5:31:17 PM                                                                                                                    
Co-Chair Hawker  asked how the fisherman's fund  is financed.                                                                   
Mr. Bitney  replied that  surcharges and  fees from  required                                                                   
crew licenses  and permits finance the fund.  Co-Chair Hawker                                                                   
wondered if the  cost of the permits and licenses  would need                                                                   
to  be  raised  in  order to  counterweigh  a  raise  in  the                                                                   
compensation cap.   Mr. Bitney  replied that in  recent years                                                                   
more has been paid into the fund  than has been paid out. The                                                                   
fund has  been maintaining  itself well  and currently  holds                                                                   
5:33:32 PM                                                                                                                    
Co-Chair Hawker  opened public  testimony. There  being none,                                                                   
public testimony was closed.                                                                                                    
5:34:23 PM                                                                                                                    
Representative  Foster   MOVED  to  REPORT  HB   207  out  of                                                                   
committee with the attached fiscal notes.                                                                                       
Vice-Chair Thomas  OBJECTED. He wondered if he had  a vote in                                                                   
committee   as  a  commercial   fisherman.  Co-Chair   Hawker                                                                   
informed  the committee  that  the legislative  legal  ruling                                                                   
states that  the conflict of interest  rules do not  apply in                                                                   
5:36:00 PM                                                                                                                    
Vice-Chair Thomas  commented that the fund has  existed since                                                                   
1951. He shared that required  health insurance for deckhands                                                                   
has forced him  to hire only Alaska Native  deckhands because                                                                   
they receive  public health services.  He said  insurance for                                                                   
non-Native deckhands can cost up to $3,000 per year.                                                                            
HB 207 was REPORTED out of committee  with recommendations of                                                                   
individual members and attached fiscal note.                                                                                    
5:37:56 PM                                                                                                                    
SENATE BILL NO. 183                                                                                                             
"An   Act  authorizing   the   Department  of   Environmental                                                                   
Conservation  to   award  grants  for  the   control  of  air                                                                   
emissions  or  the  development  and  administration  of  air                                                                   
quality  control programs;  and  providing  for an  effective                                                                   
Co-Chair  Hawker   stated  that  funding  for   the  bill  is                                                                   
available  under the  federal economic  stimulus package.  He                                                                   
said that the Department of Environmental  Conservation (DEC)                                                                   
desires  the ability to  issue grants  to municipalities  and                                                                   
public  entities  outside of  the  state  in order  to  fully                                                                   
distribute the  stimulus funds. The current program  is small                                                                   
enough  that  the  funds  available   have  been  distributed                                                                   
through reimbursable  service agreements  (RSAs).   He shared                                                                   
that the bill  had been sitting in the House  Rules Committee                                                                   
awaiting a full committee hearing.                                                                                              
5:40:17 PM                                                                                                                    
DARWIN  PETERSON, STAFF  TO SENATOR  STEDMAN, testified  that                                                                   
the senate finance committee supports  the amendment to add a                                                                   
sunset date to the bill.                                                                                                        
Co-Chair  Hawker  shared  that the  committee  has  expressed                                                                   
concern  with   permitting  the  department  an   open  ended                                                                   
authority for grants.                                                                                                           
5:41:58 PM                                                                                                                    
Vice-Chair Thomas MOVED to ADOPT the CSSB 183, 26-LS0846/R.                                                                     
Representative  Gara OBJECTED. He  remarked that he  had been                                                                   
unaware of the  amendment. He asked for discussion  as to the                                                                   
merit  of   the  amendment.   Co-Chair  Hawker   replied  the                                                                   
amendment  speaks   to  committee  concerns   about  granting                                                                   
ongoing authority  to the department. If in  the future there                                                                   
is a sustained funding source  available to the state for the                                                                   
department  to   issue  grants,   it  is  incumbent   of  the                                                                   
legislature at  that time to  decide if the authority  should                                                                   
be extended.  He felt  that the sunset  date would  allow for                                                                   
time to see how the program works.                                                                                              
5:43:47 PM                                                                                                                    
Mr.  Peterson  stated  that  the   senate  finance  committee                                                                   
believed that the precautionary sunset date was prudent.                                                                        
Representative  Gara wondered if  the federal stimulus  money                                                                   
would be  fully distributed  by January 1,  2011, in  time of                                                                   
the sunset  date. Co-Chair Hawker  said that the  money would                                                                   
be distributed  as quickly as  possible. He relayed  that the                                                                   
appropriations  for the  funds  run until  2010. He  believed                                                                   
that  the Jan  1,  2011 date  was fair.  Representative  Gara                                                                   
requested  that   the  commissioner  of  the   department  be                                                                   
available  for questioning.  Co-Chair Hawker  said that  that                                                                   
was possible.                                                                                                                   
5:45:46 PM                                                                                                                    
Representative  Foster  felt   that  the  $2  million  dollar                                                                   
appropriation for grants was inadequate  when considering the                                                                   
price of materials  and equipment. He wondered  if the grants                                                                   
would be worth applying for at all.                                                                                             
LARRY  HARTIG,  COMMISSIONER,   DEPARTMENT  OF  ENVIRONMENTAL                                                                   
CONSERVATION  explained that the  program already  exists and                                                                   
that it would not be necessary  to hire new staff or create a                                                                   
new program. For  the federal fiscal year the  department has                                                                   
$295,000 for grants. He said that  there is a strong interest                                                                   
in  the  program  from  other   state  agencies  and  various                                                                   
communities. He  shared that not  all the projects  funded by                                                                   
grants  require   large  sums   of  money  and   that  small,                                                                   
inexpensive  repairs  can provide  great  economic  benefits.                                                                   
Representative  Gara asked  if  the department  supports  the                                                                   
sunset  date. Commissioner  Hartig  replied  no. He  believed                                                                   
that the  department would  be able  to distribute  the funds                                                                   
from the  stimulus, associated  with the  grants, before  the                                                                   
sunset date.  He stated that  the department anticipates  the                                                                   
continuation  of  funds  from  the  Environmental  Protection                                                                   
Agency  for   diesel  grants.   Without  the  ongoing   grant                                                                   
authority the  department will be  forced to regress  back to                                                                   
RSAs for distribution.  This would make it difficult  for the                                                                   
department to provide financial  assistance to municipalities                                                                   
and private entities.                                                                                                           
5:48:58 PM                                                                                                                    
Co-Chair  Hawker  acknowledged  the department's  desire  for                                                                   
expanded  authority, but  felt that the  need for  additional                                                                   
authority should be discussed on a case by case basis.                                                                          
Representative  Gara understood that  the department  has the                                                                   
authority to make  grants within the state, but  not to local                                                                   
governments. Commissioner  Hartig stated that  that was true.                                                                   
Currently,  the  department must  RSA  the money  to  another                                                                   
agency for distribution and cannot  directly provide a grant.                                                                   
He  stated that  the  requests for  grants  are motivated  by                                                                   
energy  savings   and  health   benefits.  He  gave   several                                                                   
5:50:50 PM                                                                                                                    
Representative  Gara acknowledged that  the bill  only allows                                                                   
the department  to accept grants that other  entities provide                                                                   
the funding for. Subsequently,  the department can distribute                                                                   
those funds  to local governments.  He felt that  the passing                                                                   
the bill  would be of  no cost to  the state which  makes the                                                                   
sunset date irrelevant.  He reiterated his opposition  to the                                                                   
sunset date and maintained his  OBJECTION to ADOPTING the CS.                                                                   
5:52:04 PM                                                                                                                    
Representative Gara WITHDREW his OBJECTION.                                                                                     
CSSB 183, 26-LS0846/R was ADOPTED as a working document.                                                                        
5:54:23 PM                                                                                                                    
Co-Chair  Hawker introduced  new  Amendment 1,  26-LS0846\R.2                                                                   
(copy on file).                                                                                                                 
Co-Chair Stoltze OBJECTED for discussion.                                                                                       
5:55:49 PM AT EASE                                                                                                            
5:57:21 PM RECONVENE                                                                                                          
Co-Chair Hawker  WITHDREW new Amendment 1,  26-LS0846\R.2. He                                                                   
stated  that  the  rules  of  order  require  opening  public                                                                   
testimony for SB 183 before offering  amendments. There being                                                                   
no public testimony,  Co-Chair Hawker MOVED new  Amendment 1,                                                                   
26-LS0846\R.2. Co-Chair Stoltze OBJECTED for discussion.                                                                        
5:59:22 PM                                                                                                                    
Co-Chair Hawker discussed the  benefits of the amendment. The                                                                   
bill would  put at  least one  state resident  to work  as an                                                                   
Ocean   Ranger.  He   stated   that  because   the  bill   is                                                                   
specifically  designed  to  create  Alaskan  jobs  under  the                                                                   
economic  stimulus  package,  and  that the  bill  is  geared                                                                   
toward  environmental  improvement,  the amendment  does  not                                                                   
violate  the  single  subject  rule  as  interpreted  by  the                                                                   
Department of Law.                                                                                                              
5:59:58 PM                                                                                                                    
Representative  Foster  shared  that he  was  concerned  with                                                                   
local  hire  under  the  bill. He  wondered  how  many  Ocean                                                                   
Rangers there  are in the state,  and of those, how  many are                                                                   
Alaskan residents.                                                                                                              
6:00:55 PM                                                                                                                    
LYNN  KENT,  DIRECTOR,  DIVISION   OF  WATER,  DEPARTMENT  OF                                                                   
ENVIRONMENTAL CONSERVATION replied  that last year there were                                                                   
32 Ocean Rangers,  one of which was an Alaskan  resident. She                                                                   
shared that  one administrative  position had been  filled by                                                                   
and Alaskan resident and that  the manager of the program was                                                                   
also a resident of Alaska.                                                                                                      
Representative  Foster requested  a copy  of a typical  Ocean                                                                   
Ranger report  at the  end of  a voyage.  Ms. Kent noted  his                                                                   
6:02:31 PM                                                                                                                    
Co-Chair Hawker asked that a copy  of the report also be sent                                                                   
to both co-chair offices for committee distribution.                                                                            
Representative  Austerman wondered if  changing the  title of                                                                   
the  position  of marine  engineer,  to Ocean  Ranger,  would                                                                   
increase the chances of hiring Alaskan residents.                                                                               
Co-Chair  Hawker explained  that the  Cruise Ship  Initiative                                                                   
established   the  qualifications   for  Ocean  Rangers.   It                                                                   
required that the  ranger must be a marine  engineer licensed                                                                   
by the United Sates Coast Guard.  The amendment would include                                                                   
individuals  holding  degrees  in  environmental  safety  and                                                                   
protection or an equivalent course  of study, approved by the                                                                   
department,   from   an   accredited   maritime   educational                                                                   
institution as qualified applicants.                                                                                            
6:04:14 PM                                                                                                                    
Ms. Kent relayed that the education  and experience necessary                                                                   
to be an Ocean Ranger requires  and individual have knowledge                                                                   
of marine  safety and  safety of life  at sea, a  familiarity                                                                   
with  the mechanical  and  electrical equipment  onboard  the                                                                   
vessels,  and  knowledge  of  the  environmental  health  and                                                                   
sanitation rules and practices  aboard vessels. She furthered                                                                   
that  there  is  not  an  established  four  year  university                                                                   
program  to train Ocean  Rangers. The  marine engineers  that                                                                   
are currently employed have the  necessary training in safety                                                                   
and vessel equipment but not the  environmental training. The                                                                   
changes proposed  by the amendment would enhance  the overall                                                                   
knowledge  required  of  an Ocean  Ranger  and  increase  the                                                                   
potential for hiring Alaskan residents.                                                                                         
6:06:29 PM                                                                                                                    
Co-Chair Hawker echoed  that if the amendment  were passed it                                                                   
would  ensure the  employment of  an Alaskan  resident as  an                                                                   
Ocean Ranger.                                                                                                                   
6:07:01 PM                                                                                                                    
Representative  Austerman spoke  of the  contract put  out by                                                                   
DEC for the hiring of Ocean Rangers.  He pointed out that the                                                                   
contract goes  to an out-of  state contractor, who  then does                                                                   
the hiring.  He said that DEC  should make a  stronger effort                                                                   
to hire in-state.                                                                                                               
Representative Gara  wondered about the purpose  of requiring                                                                   
a degree from a maritime institution.  He queried whether the                                                                   
same education could be acquired at an Ivy League school.                                                                       
6:08:22 PM                                                                                                                    
Ms. Kent  explained that a degree  from an Ivy  League school                                                                   
does not offer  the marine safety training that  is taught in                                                                   
maritime institutions.   Representative Gara  understood that                                                                   
applicants  would be  required  to have  a  degree in  marine                                                                   
safety  and environmental  protection. He  maintained that  a                                                                   
degree   from  a  four   year  university   might  meet   the                                                                   
requirements sought by the department.                                                                                          
Co-Chair Hawker shared  that the sponsors of  the Cruise Ship                                                                   
Initiative support the amendment.                                                                                               
6:10:48 PM                                                                                                                    
Co-Chair  Stoltze   felt  that   a  maritime  education   was                                                                   
paramount for marine pilots and  that an Ivy League education                                                                   
has its limitations in training Ocean Rangers.                                                                                  
6:11:55 PM                                                                                                                    
Representative   Joule  reminded   the  committee   that  the                                                                   
objective was to put Alaskan residents to work.                                                                                 
Representative Austerman  said that he  would be a  member of                                                                   
the sub-committee  next year.  He stressed  that he  would be                                                                   
diligent in making the program  a success at putting Alaskans                                                                   
to work.                                                                                                                        
Representative Kelly warned that  the program was "a waste of                                                                   
a good  engineer". He pointed  out that the program  has been                                                                   
expensive and ill conceived.                                                                                                    
6:13:17 PM                                                                                                                    
Representative Foster  wondered if other states  have similar                                                                   
Ocean Ranger  programs. Ms.  Kent stated  that Alaska  is the                                                                   
only state to have an Ocean Ranger program.                                                                                     
6:14:06 PM                                                                                                                    
Mr. Peterson  shared that  Senator Stedman expressed  support                                                                   
for the amendment by stating that  "it might make him squirm,                                                                   
but it won't make him faint."                                                                                                   
6:15:00 PM                                                                                                                    
Co-Chair Stoltze WITHDREW his OBJECTION.                                                                                        
New Amendment number 1, 26-LS0846\R.2 was ADOPTED.                                                                              
SB 183 was brought back before the committee as amended.                                                                        
6:15:47 PM                                                                                                                    
Vice-Chair Thomas  wondered if a program could  be created at                                                                   
the University  of Alaska  using funds  from the cruise  ship                                                                   
tax. He  felt that in-state  training would lead  to in-state                                                                   
6:16:39 PM                                                                                                                    
Representative  Fairclough   pointed  out  that   the  marine                                                                   
program at the  Alaska Vocational Technical  Center in Seward                                                                   
has been successful in training marine pilots.                                                                                  
Co-Chair  Stoltze MOVED  to REPORT  HCS for  CSSB 183 out  of                                                                   
Committee   with    individual   recommendations    and   the                                                                   
accompanying fiscal note.                                                                                                       
The House  CS for  SB 183  was REPORTED  out of committee  as                                                                   
amended  with  individual  recommendations  and  accompanying                                                                   
fiscal note.                                                                                                                    
6:18:51 PM     AT EASE                                                                                                        
6:19:55 PM     RECONVENED                                                                                                     
Co-Chair   Stoltze  discussed   housekeeping.  He   spoke  to                                                                   
committee concerns  about scheduling for SB75.  He hoped that                                                                   
the need for evening meetings would be limited.                                                                                 
Co-Chair  Hawker requested  flexibility  in  meeting all  the                                                                   
obligations  that would  be occurring  simultaneously  during                                                                   
the final days of the session.                                                                                                  
6:23:28 PM                                                                                                                    
Representative  Foster wondered if  the Senate was  reviewing                                                                   
and  working on  House  bills.  Co-Chair Hawker  assured  the                                                                   
committee that both bodies were  working on the priorities of                                                                   
the other. Co-Chair  Stoltze added that the  bills were being                                                                   
looked in priority order.                                                                                                       
6:24:28 PM     AT EASE                                                                                                        
6:25:31 PM     RECONVENED                                                                                                     
The meeting was adjourned at 6:25 PM.                                                                                           

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