Legislature(2005 - 2006)HOUSE FINANCE 519
04/14/2005 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB71 | |
| HB211 | |
| HB103 | |
| HB215 | |
| HB169 | |
| HB27 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 211 | TELECONFERENCED | |
| + | HB 103 | TELECONFERENCED | |
| HB 215 | |||
| += | HB 33 | TELECONFERENCED | |
| = | HB 169 | ||
| = | HB 71 | ||
| = | HB 27 | ||
HOUSE FINANCE COMMITTEE
April 14, 2005
1:54 P.M.
CALL TO ORDER
Co-Chair Meyer called the House Finance Committee meeting to
order at 1:54:53 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 Mike Kelly
Representative Carl Moses
Representative Bruce Weyhrauch
MEMBERS ABSENT
Representative Reggie Joule
ALSO PRESENT
Representative Max Gruenberg; Representative Norman
Rokeberg; Heather Nobrega, Staff, Representative Norman
Rokeberg; Heath Hilyard, Staff, Representative Mike Kelly;
Pat Davidson, Legislative Auditor, Legislative Audit
Division; Doug Wooliver, Administrative Attorney, Alaska
Court System; Michael Burns, Chief Executive Officer, Alaska
Permanent Fund Corporation; Laura Achee, Alaska Permanent
Fund Corporation; James Baldwin, Assistant Attorney General,
Department of Law; Peter Naoroz, Staff, Representative Max
Gruenberg; Laura Achee, Alaska Permanent Fund Corporation
PRESENT VIA TELECONFERENCE
Dan Dickinson, Director, Tax Division, Department of
Revenue, Anchorage; Jim Towle, Executive Director, Alaska
Dental Society, Anchorage; Gayle Voightlander, Assistant
Attorney General, Department of Law, Anchorage; Jim Gasper,
Public Safety Employees Association, Anchorage; Steve Van
Sant, State Assessor, Department of Commerce, Community and
Economic Development, Anchorage
SUMMARY
HB 27 An Act relating to an optional exemption from
municipal property taxes on certain residences of
law enforcement officers.
CS HB 27 (FIN) was reported out of Committee with
"individual recommendations" and with zero note #1
by the Department of Commerce, Community &
Economic Development.
HB 71 An Act relating to a credit for certain
exploration expenses against oil and gas
properties production taxes on oil and gas
produced from a lease or property in the state;
relating to the deadline for certain exploration
expenditures used as credits against production
tax on oil and gas produced from a lease or
property in the Alaska Peninsula competitive oil
and gas area wide lease sale area after July 1,
2004; and providing for an effective date.
HB 71 was POSTPONED.
HB 103 An Act requiring an actionable claim against the
state to be tried without a jury.
CS HB 103 (FIN) was reported out of Committee with
a "no recommendation" and with fiscal note #1 by
the Alaska Court System and fiscal note #2 by the
Department of Law.
HB 169 An Act relating to the educational requirements
for certain real estate brokers, associate
brokers, and salespersons with new or suspended
licenses; and allowing real estate brokers to hire
certain experts to review real estate
transactions; and providing for an effective date.
CS HB 169 (FIN) was reported out of Committee with
a "do pass" recommendation and with zero note #1
by the Department of Commerce, Community &
Economic Development.
HB 211 An Act extending the termination date of the Board
of Dental Examiners; and relating to dentists and
dental hygienists.
CS HB 211 (FIN) was reported out of Committee with
a "no recommendation" and with fiscal note #1 by
the Department of Commerce, Community & Economic
Development.
HB 215 An Act relating to the investment responsibilities
of the Alaska Permanent Fund Corporation; relating
to regulations proposed and adopted by the Board
of Trustees of the Alaska Permanent Fund
Corporation and providing procedures for the
adoption of regulations by the board; and
providing for an effective date.
CS HB 215 (FIN) was reported out of Committee with
a "no recommendation" and with zero note #1 by the
Alaska Permanent Fund Commission.
1:56:29 PM
HOUSE BILL NO. 211
An Act extending the termination date of the Board of
Dental Examiners; and relating to dentists and dental
hygienists.
Representative Foster MOVED to ADOPT work draft #24-LS070\G,
Mischel, 4/8/05, as the version of the bill before the
Committee. There being NO OBJECTION, it was adopted.
REPRESENTATIVE MIKE KELLY, SPONSOR, stated that HB 211 would
provide an extension for the Board of Dental Examiners to
June 30, 2011, as recommended by a Legislative Audit #08-
20031-04, dated August 5, 2004. The extension would aid in
"smoothing out the number of boards and commissions that
come under sunset in a particular year".
HB 211 includes changes to the Dental Board statutes, which
cleans-up issues for the Board of Dental Examiners. The
changes are described:
· Implements continuing education requirements for dental
hygienists in an amount of 14 hours for the previous
two years.
· Modifies the inspection period for radiological
equipment used in dentistry to five years to better
accommodate periodic inspections.
· Clarifies qualifications for licensure by more clearly
identifying impairment and ads a new section.
· Clarifies the requirements for specialty licensure by
requiring that the applicant meet the qualifications
for licensure as a dentist in Alaska, and passes an
examination given by either the Western Regional
Examining Board, the Central Region Dental Testing
Service, the Central Region Examining Board or that the
applicant meet the qualifications for licensure as a
dentist in Alaska and be certified by a specialty
certification board, recognized by the American Dental
Association.
Representative Kelly summarized that the changes resulting
from a joint meeting with representatives from the Division
of Occupational Licensing, Alaska Board of Dental Examiners
and the Alaska Dental Society. The changes were discussed
with representatives from the Alaska State Dental Hygiene
Association.
1:58:44 PM
HEATH HILYARD, STAFF, REPRESENTATIVE MIKE KELLY, clarified
the changes made to the committee substitute. The first
change was on Page 2, Line 8, removing "and by" allowing
Board clarification. Also, Page 7, Lines 2-9, would allow
the Board of Dental examiners to approve any examination
deemed appropriate.
1:59:43 PM
Representative Holm referenced Page 4, Section H, which adds
the language regarding conviction of a crime that might
adversely reflect the applicant's ability to perform safe
denistry. Mr. Hilyard requested that Mr. Towle testify to
address that query.
2:00:32 PM
JIM TOWLE, (TESTIFIED VIA TELECONFERENCE), EXECUTIVE
DIRECTOR, ALASKA DENTAL SOCIETY, ANCHORAGE, responded that
the intent was to bring clarity regarding crimes that would
not impact ones ability to practice dentistry. He
acknowledged that he did not know the full history of the
legislation. The language would not directly relate to a
dentist's ability or appropriateness to practice.
Previously, there was confusion. The legislation provides
the Board authority to review and decide whether the
situation would impact the dentist's ability to be a good
practitioner.
Representative Holm questioned where the line would be drawn
and thought the language was "fuzzy".
2:02:28 PM
Mr. Towle pointed out that the Alaska Dental Society had
worked with all interested parties to determine a consensus.
Representative Weyhrauch asked if Section H was a part of
the original bill. Mr. Hilyard replied it was as
recommended by the Alaska Dental Society.
In response to queries voiced by Representative Weyhrauch,
Mr. Towle clarified that specific information was related to
the actual practice of dentistry. If someone was convicted,
the Board would determine if there had been a history that
might impact that person's ability to practice. Such
information would not be reported to the National Data Bank.
He added that the original request had come from the Board
of Dental Examiners to guarantee that they had proper
authority to see the board picture.
Representative Weyhrauch proposed addition of language in
Subsection H, following "dentistry", inserting "at the time
of application". Mr. Towle was confident that the Board
would take any history into consideration. He did not
object to the addition of the clarifying language.
2:07:14 PM
Representative Weyhrauch questioned if the amendment were
not adopted, would the Board still take that person's
history into consideration. Mr. Towle affirmed.
Vice-Chair Stoltze commented that Section H was unusual
language. Mr. Towle noted that when it was drafted, it
provided the Board broad authority to be able to determine
what affects an individual's ability to be a good dental
practitioner. The Board must review and make appropriate
decisions. The proposed language would not hamstring the
Board, but would be broad enough to guarantee that the
Dental Board understands what is appropriate and acts
accordingly.
2:10:38 PM
Representative Weyhrauch referenced Page 1, Section 2, which
reduces the number of active hygiene, dental time from 728
to 700 hours and asked why that change was proposed. Mr.
Towle thought it was adequate and would be more appropriate.
The proposed language originated from the Board.
2:11:46 PM
Representative Kelly MOVED to REPORT CS HB 211 (FIN) out of
Committee with individual recommendations and with the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
CS HB 211 (FIN) was reported out of Committee with a "no
recommendation" and with fiscal note #1 by the Department of
Commerce, Community & Economic Development.
2:13:08 PM
HOUSE BILL NO. 103
An Act requiring an actionable claim against the state
to be tried without a jury.
REPRESENTATIVE MIKE KELLY, SPONSOR, stated that HB 103 would
make a small but important change to the manner in which
claims against the State are adjudicated. The doctrine of
"sovereign immunity", originally taken from English common
law, is familiar within the legal system. The doctrine
precludes the institution of a suit against the sovereign
[government] without consent. It is intrinsic to the legal
system.
The Alaska State Constitution addresses the issue of
sovereign immunity in Article 2, Sec. 21, when it grants the
Legislature sole authority to determine the manner in which
suits against the State are tried. Without that addition,
the language in Article 1, Sec.16, specifically refers to
"common law", presupposes that sovereign immunity is
absolute in Alaska.
Representative Kelly continued, although HB 103 does change
from the current standard of a trial by jury in a claim
against the State, it returns to the standard that was in
place until 1975. Since that time, there have been a number
of cases that have resulted in exorbitant jury awards
against the State. HB 103 would accomplish the intent by
making a direct statutory change. He urged support of the
legislation.
2:17:08 PM
HEATH HILYARD, STAFF, REPRESENTATIVE MIKE KELLY, offered to
answer questions of the Committee.
Co-Chair Meyer inquired if there was concern that a judge
would be harsher than a jury. Mr. Hilyard replied that had
been considered as a possibility. It has been a long time
since there was a trial decision by a judge that there are
no statistics available. Representative Kelly interjected
that could be the case and might not be inappropriate. He
stressed that the bill addresses the "deep pocket" concern
of the State and was worried about some jury awards.
2:18:58 PM
Representative Weyhrauch defended some of the "deep pocket
cases of the State". Representative Kelly noted that there
were a number of cases cited. He noted that a constituent
who is a retired lawyer requested the bill. Representative
Kelly mentioned that historically there have been some
outrageous rewards.
Representative Weyhrauch asked if the legislation had been
geared toward cases in Bethel and Western Alaska and not the
ones in the Big Lake fire areas. Representative Kelly
responded that his concern was with the smaller ones such as
the windsock case.
2:21:50 PM
In response to further queries by Representative Weyhrauch,
Representative Kelly commented that there are four states
that do not allow their state to be sued.
GAYLE VOIGHTLANDER, (TESTIFIED VIA TELECONFERENCE),
ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF LAW, ANCHORAGE,
offered to answer questions of the Committee regarding the
Department of Law's fiscal note.
Representative Weyhrauch commented on the cases sighted as
examples of jury awarding "deep pockets", and inquired how
many had actually been paid out. Ms. Voightlander advised
that the windsock case continues to be in litigation; the
other three have been completed.
Representative Weyhrauch referenced the case sighted in the
Bethel verdict and asked if there had been a motion to
reduce the amount of that verdict. Ms. Voightlander advised
in that case, there have been post trail motions. Also, the
search and rescue case was appealed and then cross-appealed.
The Department of Law asked for large verdicts from the last
few years.
2:26:15 PM
Vice-Chair Stoltze mentioned an incident in Chugiak in the
early 1990's, ultimately, in which that woman received a
settlement. He asked how that case would have been affected
through the proposed statutory change. Ms. Voightlander
explained that case was tried with the State as the
defendant. A negotiated settlement amount was determined.
If HB 103 had been in effect, a judge rather than the jury
of twelve would have deliberated the case.
2:29:26 PM
DOUG WOOLIVER, ADMINISTRATIVE ATTORNEY, ALASKA COURT SYSTEM,
noted that the Courts anticipate a $16 thousand dollar
savings with implementation of the legislation. That amount
was determined by figuring out how many jury trials there
were in the last five years. There have been approximately
20 cases during that time. He checked all costs associated
with those trials, which averaged approximately $4 thousand
dollars per trial.
2:31:10 PM
Representative Weyhrauch MOVED to ADOPT Amendment #1, adding
a new sentence on Page 1, Line 5, "the State may request a
jury trial under this subsection". Co-Chair Meyer OBJECTED.
Representative Kelly noted that he did not object to the
amendment. Co-Chair Meyer WITHDREW his OBJECTION. There
being NO further OBJECTION, Amendment #1 was adopted.
2:33:27 PM
Representative Kelly MOVED to REPORT CS HB 103 (FIN) out of
Committee with individual recommendations and with the
accompanying fiscal notes. Representative Croft OBJECTED.
Representative Croft commented that he did not like
supporting the taking of people's rights away. There is a
reason we have a constitutional right to a jury trail. He
maintained that the right to take a case before peers and
people not employed by the government, is important. The
government has gotten so pervasive; it can determinately
affect a person's life. Representative Croft thought it
would be un-wise to pass the proposed legislation since it
goes against our country's history. He reiterated that he
did not support the bill.
Representative Weyhrauch observed that there is a right in
this society to a jury trial. A jury is made up of a broad
section of people. He sited a case, which he litigated and
which he had requested a jury trial. The case ultimately
settled with the jury's verdict against the State. There
were fees and costs built into that cost. There are
instances in which the State will have to pay; however,
within the context of a jury trial, there is an appeal
process.
The State, currently is immune and cannot award damages
against the State. Right now, when a case appears and there
is a punitive damage award, the State gets half of that
award. He emphasized that sometimes, the State should pay,
as there is gross negligence. Sometimes the verdict ends up
with the person getting fired. Representative Weyhrauch
believed that juried trials usually end up with society
benefiting as a whole. He clarified that he does not
distrust judges, however, sometimes the State rightfully
should pay.
2:40:49 PM
Vice-Chair Stoltze pointed out his history and voting record
for legal reform measures, however was concerned with the
proposed legislation. He stated that he respects the intent
but was not comfortable with the concept of "deep pockets".
Representative Kelly interjected that the present debate
highlights the difficult issue being addressed through the
legislation and acknowledged the "heart" of that struggle.
He believed that HB 103 was a "good bill" and would save the
State money and abuse.
2:44:06 PM
A roll call vote was taken on the MOTION to MOVE the bill
from Committee.
IN FAVOR: Holm, Kelly, Stoltze, Weyhrauch, Foster,
Hawker, Meyer, Chenault
OPPOSED: Moses, Croft
Representative Joule was not present for the vote.
The MOTION PASSED (8-2).
CS HB 103 (FIN) was reported out of Committee with a "no
recommendation" and with fiscal note #1 by the Alaska Court
System and fiscal note #2 by the Department of Law.
2:45:11 PM
HOUSE BILL NO. 215
An Act relating to the investment responsibilities of
the Alaska Permanent Fund Corporation; relating to
regulations proposed and adopted by the Board of
Trustees of the Alaska Permanent Fund Corporation and
providing procedures for the adoption of regulations by
the board; and providing for an effective date.
REPRESENTATIVE NORMAN ROKEBERG, SPONSOR, noted that the bill
was brought forward by the Alaska Permanent Fund
Corporation. He stated that the bill would change the
current policy of statutorily limiting the allocation of the
agency's portfolio.
Representative Rokeberg referenced Amendment #1, #24-
LS0698\A.1, Cook, 4/1/405. (Copy on File). He requested
consideration of the amendment, which would provide that the
Board of Trustees could go through the rule adoption prior
to the effective date of the bill. He reiterated his
support of Amendment #1. The Board needs authority in order
to be able to start drafting regulations and would happen
with passage of the amendment.
2:47:27 PM
Vice-Chair Stoltze inquired if the amendment would delete
the effective date. Reprehensive Rokeberg said it would
change the effective date in order to allow for the rule
making authority to move forward.
MICHAEL BURNS, CHIEF EXECUTIVE OFFICER, ALASKA PERMANENT
FUND CORPORATION, directed his comments to the legislation.
Initially, the fund was limited to a bond portfolio.
Overtime, the Legislature loosened those restrictions,
creating a statutory list of permissible investments. He
noted that that 45 of the 50 states have eliminated the
statutory lists and now use the prudent investor rule.
2:49:25 PM
Mr. Burns provided a handout "Reducing Risk, Increasing
Return", and referenced Page 4. (Copy on File). The chart
indicates potential risk and return for various portfolios
under the Fund's current investment restrictions and under
the prudent investor rule. The underlying asset allocations
for the main points of the chart are shown. The chart
demonstrates that under the prudent investor rule, the Fund
could potentially earn the same return as the current
portfolio with 3% less risk.
2:52:03 PM
LAURA ACHEE, ALASKA PERMANENT FUND CORPORATION, offered to
answer questions of the Committee.
Representative Rokeberg requested that Mr. Burns explain the
impacts on the fixed income portfolio. Mr. Burns advised
that in a raising rate environment, the portfolio is very
vulnerable to price declines.
Representative Rokeberg added that as interest rates go up,
the principle balance is actually loosing money. He asked
how the bill allows managing that risk. Mr. Burns responded
that addressing the value of the principle, there are a
number of "tools" the Corporation might use:
· Absolute return strategy;
· Various hedging; and
· Derivatives.
Mr. Burns mentioned "hard" assets. There are a variety of
strategies and combinations of assets that can protect the
State against rising rates.
2:54:54 PM
Representative Holm referenced the prudent investor rule and
asked how it relates to the current discussion. Mr. Burns
responded that the prudent investor rule was established in
1994. The requirements are "not to be right", instead
encouraging a process involving questions and standards.
Representative Holm asked what happens if there are no
standards. Mr. Burns replied that it is the process in
place, managing oneself and measuring the risks. The
prudent investor rule is about the diligence placed on the
controls and how the fund operates. He acknowledged that
was vague.
2:57:15 PM
Representative Holm commented that investing is a form of
art. He asked how the Board determines if the standards of
the prudent investor rule are being met. Mr. Burns stated
that the Board has to measure how things are presented and
follow-up on those concerns. The prudent investor rule is a
management process tool and a way of doing business. He
mentioned the legal components.
3:01:11 PM
In response to Representative Holm, Mr. Burns pointed out
the primary decision the Board makes is determining what the
asset allocations are going to be. From there, it is
determined who will be responsible for implementing it. He
agreed it is a "term of art".
Representative Holm acknowledged he was nervous given
concerns managing the Public Employment Retirement System
(PERS) and the Teachers Retirement System (TRS).
3:02:33 PM
Co-Chair Meyer asked if the investment strategy was
conservative. Mr. Burns responded it was a very
conservative managed fund, consisting of a balance of asset
categories and styles for growth and equity in the fund. He
emphasized that it is diversified.
Co-Chair Meyer asked if the investment strategies would stay
the same through passage of the legislation. Mr. Burns
explained that some of the asset categories would replace
some of the fixed income categories, which would remove the
price swing vulnerability. The private equity deals are
hopeful and that the Board would like to expand the private
equity type investments.
3:06:24 PM
Representative Croft inquired the expected return in March
2004. Mr. Burns pointed out that the historical status is a
7.83% return of the picked asset mix. The standard
deviation is 10.29%. Representative Croft understood that
is an asset mix used to achieve those goals.
Representative Croft referenced Page 5 of the handout,
inquiring about the regulatory interest. Mr. Burns noted
those are some category potentials.
Representative Croft asked that with a little more risk, was
it possible that the Fund could receive higher returns. Mr.
Burns replied it is such a small draw on the fund, not like
a pension fund and the draw tends to be around 5%. The
Board has the patience to stay in a fund for a longer term.
Representative Croft inquired about the relative individual
risk. Mr. Burns responded that the Permanent Fund functions
as an endowment.
3:10:22 PM
Mr. Burns spoke to the risk factors and return levels.
Representative Croft asked if that was addressed through
switching the large cap equities. Mr. Burns said whatever
the combination, the intent is to accumulate a portfolio of
assets, where performance is not connected to each another.
He pointed out that some private equities do not always have
a correlation to each another. It is of no concern how each
asset performs but instead, how the portfolio performs as a
whole.
Representative Rokeberg added that the asset mix can lower
the risk.
3:13:30 PM
Representative Weyhrauch noted a new section of the bill
addressing regulation adoption. Mr. Burns discussed that
the constitutional amendment, which created the Permanent
Fund, describes assets prescribed by law and that the
Legislature should grant rule-making authority to the Board
of Trustees.
Vice-Chair Stoltze inquired if that could alter the basket
requirement amount. Mr. Burns responded that at present,
the basket clause is at 10%.
Vice-Chair Stoltze inquired if there was a statutory amount
indicating a specific dollar figure. Mr. Burns reiterated
it was 10%. The overriding principle will always be the
prudent investment rule and one tenant is diversification.
3:16:35 PM
Representative Croft read from AS 37.13.121: "Mortgages are
capped at 15%, real estate investment capped at 15%, CD's
and other investments capped at 20%; domestic and non-
domestic capped at 55%."
Vice-Chair Stoltze asked if the legislation provides for
investing in the gas line proposal. Mr. Burns said that the
Permanent Fund would need specific statutory authority to
invest in something like that. Vice Chair Stoltze asked if
the language was broad enough to allow for it. Mr. Burns
thought it might be depending on the proposed amount.
Representative Weyhrauch pointed out that last year's
legislation had an amendment that allowed the Permanent Fund
to specifically invest in the gas pipeline. The Senate
Finance Committee stripped that clause out.
3:19:42 PM
Co-Chair Chenault asked if the legislation would provide
that hedge funds be used and the 1% Permanent Fund
designation. (Testimony inaudible).
Mr. Burns replied that a hedge fund strategy could very well
be a part of the legislation. Hedge funds can provide a
broad handle. There is no percent at this time on in-State
investments. The Board was insulated from political
pressure last session by stripping out the clause that
members could be removed for "cause". The Board is
independent and members have a four-year staggered term. He
pointed out that the Board would like to do more in-State
investing.
3:22:06 PM
Representative Hawker added comments toward diversification
as mandated by the prudent investor rule and prohibiting the
concentration of risk in small environments. Mr. Burns
acknowledged it has been a challenge attempting to invest in
Alaska because there are only a few projects in the State
large enough.
3:23:14 PM
Representative Rokeberg mentioned investment in the gas
pipeline. He thought that a pipeline investment would
provide a more fixed income portfolio. He added it could be
limited by that investment strategy. Mr. Burns mentioned
the categories of the prudent investor rule:
· Diversification,
· Concentration, and
· Determining if it is of an investment grade.
Representative Rokeberg maintained that the only possible
way to use any funding above the criteria would be through
passage of the proposed legislation. Mr. Burns thought
that, however, the process could be addressed such as
legislative intent and it would be appropriate.
3:26:02 PM
Representative Weyhrauch interjected that if the investment
meets the prudent investment rule, then the State should
invest in it.
Representative Croft pointed out that he could not find a
provision within statute that would prevent investing in the
pipeline. He thought investing would be limited as it is
currently within the 5% market basket. He thought it could
be difficult to justify under the prudent investor rule, but
saw no restrictions in what could be done through
regulation.
Mr. Burns informed members that the Trustees take their
fiduciary role seriously. He believed that the limitations
of the prudent investor rule could limit pipeline
investment.
Representative Kelly stated the proposed legislation is
important and understood it would take the decisions from
the Legislature and place it with the qualified Board.
3:29:42 PM
Representative Hawker MOVED to ADOPT Amendment #1, #24-
LS0698\A.1, Cook, 4/14/05. (Copy on File). Vice-Chair
Stoltze OBJECTED.
Representative Rokeberg explained that Amendment #1 was a
housekeeping measure, authorizing the Board to proceed with
the regulation rule making it prior to the effective date.
Vice-Chair Stoltze WITHDREW his OBJECTION. There being NO
further OBJECTION, it was adopted.
Representative Weyhrauch MOVED to ADOPT Amendment #2, Page
3, Line 8, delete "mailing" and insert "providing". Vice-
Chair Stoltze OBJECTED.
Representative Weyhrauch explained that current language
does not include other options such as emailing and faxing.
The amended language will be broader. Representative
Rokeberg supported the change. Vice-Chair Stoltze WITHDREW
his OBJECTION, Amendment #2 was adopted.
3:32:17 PM
Representative Foster MOVED to REPORT CS HB 215 (FIN) out of
Committee with individual recommendations and with the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
CS HB 215 (FIN) was reported out of Committee with a "no
recommendation" and with zero note #1 by the Alaska
Permanent Fund Commission.
3:32:45 PM
HOUSE BILL NO. 169
An Act relating to the educational requirements for
certain real estate brokers, associate brokers, and
salespersons with new or suspended licenses; and
allowing real estate brokers to hire certain experts to
review real estate transactions; and providing for an
effective date.
REPRESENTATIVE NORMAN ROKEBERG, SPONSOR, referenced Page 8.
Representative Kelly MOVED to ADOPT Amendment #4, Page 8,
Lines 22-30. Co-Chair Chenault OBJECTED for discussion
purposes.
Representative Rokeberg noted that the amendment recommends
addition of Section 15.
Co-Chair Chenault clarified that was not Amendment #3. He
pointed out that Amendment #3 had been WITHDRAWN.
Representative Kelly repeated the motion to MOVE Amendment
#4. Co-Chair Chenault WITHDREW his OBJECTION. There being
NO further OBJECTIONS, Amendment #4 was adopted.
3:36:38 PM
Representative Croft MOVED to REPORT HB 169 out of Committee
with individual recommendations and with the accompanying
fiscal note. There being NO OBJECTION, it was so ordered.
CS HB 169 (FIN) was reported out of Committee with a "do
pass" recommendation and with zero note #1 by the Department
of Commerce, Community & Economic Development.
3:38:06 PM
HOUSE BILL NO. 27
An Act relating to an optional exemption from municipal
property taxes on certain residences of law enforcement
officers.
REPRESENTATIVE MAX GRUENBERG, SPONSOR, explained that the
purpose of the bill was to encourage law enforcement
officers to purchase homes and live in areas needing
additional police protection. It would allow municipalities
to pass an ordinance giving an exemption of up to $150,000
of assessed valuation on the primary permanent residence of
any law enforcement officer who lives in a high crime area.
The bill permits a municipality, by ordinance, to designate
areas in which the primary permanent residence owned and
occupied by a law enforcement officer would be exempted from
taxation up to $150,000 of the assessed valuation per
officer/owner-occupant (up to a maximum of $300,000 assessed
valuation per property.)
Representative Gruenberg pointed out that the ordinance must
define "law enforcement officer" and designate specific
areas, as either:
· (1) Areas eligible under governmental programs allowing
special assistance for urban development, neighborhood
revitalization, or law enforcement, or
· (2) Statistically high crime areas.
Representative Gruenberg advised that there would be no
cost to the State for the program.
JIM GASPER, (TESTIFIED VIA TELECONFERENCE), POLICE OFFICER,
PUBLIC SAFETY EMPLOYEES ASSOCIATION, ANCHORAGE, noted that
he represents over 200 municipal police officers throughout
the State. He thought that the bill was drafted to provide
discretion to the municipalities that want to participate in
the program. He stated that it is a good method of
advancing the concept of community policing. It could be
extended to State police for policing high crime areas. He
thought it would be good policy for the State and voiced
support for the bill.
3:44:17 PM
STEVE VAN SANT, (TESTIFIED VIA TELECONFERENCE), STATE
ASSESSOR, DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC
DEVELOPMENT, ANCHORAGE, voiced appreciation to
Representative Gruenberg for addressing the concerns of the
State Assessor's office. He voiced support for the bill.
3:44:58 PM
Representative Gruenberg clarified the conceptual Amendment
#1, Subsection (s) on Page 1, Line 8 amended to read:
"(s) A municipality may be ordinance designate an area
within its boundaries that is an eligible area and exempt
from taxation an amount not to exceed $150,000 of the
assessed value of real property within the area [that is]
if the property is primarily residential and owned and
occupied as the primary permanent place of abode by a law
enforcement officer for the entire parcel."
In response to a query by Vice-Chair Stoltze, Representative
Gruenberg explained that if the parcel were a zero lot line,
then it would be able to occur. However, if there was a
triplex or duplex on the land and it was titled as a single
parcel, it could be divided. The most that can be received
is $150,000 dollars.
Representative Kelly asked why would the State want to
encourage two police in the same area. Representative
Gruenberg responded, they could be a social unit such as a
family or two people that were co-tenants.
Representative Kelly thought there could be potential for
abuse. Representative Gruenberg replied that at least in
the Mountain View area, it would be unlikely to find any
properties of that value.
Representative Croft MOVED to ADOPT conceptual Amendment #1.
Co-Chair Chenault OBJECTED.
After looking at the printed version of the conceptual
amendment, Co-Chair Chenault WITHDREW his OBJECTION. There
being NO further OBJECTION, conceptual Amendment #1 was
adopted.
3:53:37 PM
Vice-Chair Stoltze asked about constitutional issues
regarding the police department and where they reside.
Representative Gruenberg was not aware of anything that
could prohibit it in the future. Co-Chair Chenault noted
that in his area, it is required that the troopers live
within the city limits. He thought that the legislation
would help police officers out.
3:55:39 PM
Representative Kelly suggested adding language: "No more
than one exemption for the same property be granted".
Representative Gruenberg suggested that if that language was
adopted, it would be important to strike the sentence from
Lines 8-10.
Representative Kelly MOVED to ADOPT Conceptual Amendment #2.
3:58:50 PM
Representative Hawker OBJECTED for discussion purposes. He
thought that the amendment could put the primary focus on
the residential location. He questioned if the exemption
should track the property or the people working as law
enforcement officers. He mentioned that he wanted to see
every law enforcement officer have the option of the
proposal.
Representative Croft suggested deleting language on Lines 8-
10. Co-Chair Chenault agreed, however, noted that on Line
6, the taxation may not exceed $150,000 assessed value. He
supported one exemption.
3:57:57 PM
Vice Chair Stoltze recommended inserting the language: "Only
one exemption".
4:00:46 PM
Representative Hawker WITHDREW his OBJECTION to Amendment
#2. Representative Gruenberg supported the verbiage
proposed by Vice Chair Stoltze.
4:01:25 PM
Co-Chair Chenault OBJECTED to conceptual Amendment #2 as he
foresaw more problems related to marital status and spousal
issues.
Representative Croft thought that removal of that sentence
could allow the municipalities to decide. He did not think
it would do much harm.
Co-Chair Meyer thought that if it was modeled after the
senior exemption, it should be consistent. Representative
Gruenberg replied that it was modeled after a different
statute, AS 29.45.050, regarding the granting of exemptions
for same property.
Representative Kelly WITHDREW conceptual Amendment #2.
4:04:59 PM
Representative Gruenberg requested that the bill drafter
insert the language from conceptual Amendment #1 where it is
most appropriate.
4:05:56 PM
Representative Foster MOVED to REPORT CS HB 27 (FIN) out of
Committee with individual recommendations and with the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
CS HB 27 (FIN) was reported out of Committee with
"individual recommendations" and with zero note #1 by the
Department of Commerce, Community & Economic Development.
ADJOURNMENT
The meeting was adjourned at 4:07 P.M.
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