Legislature(2009 - 2010)BARNES 124
04/05/2010 01:00 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB416 | |
| HCR21 | |
| HB389 | |
| SB269 | |
| SB272 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 416 | TELECONFERENCED | |
| + | HCR 21 | TELECONFERENCED | |
| + | HB 389 | TELECONFERENCED | |
| + | SB 269 | TELECONFERENCED | |
| + | SB 272 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
April 5, 2010
1:11 p.m.
MEMBERS PRESENT
Representative Kurt Olson, Chair
Representative Mike Chenault
Representative Bob Lynn
Representative Tammie Wilson
Representative Robert L. "Bob" Buch
Representative Lindsey Holmes
MEMBERS ABSENT
Representative Mark Neuman, Vice Chair
COMMITTEE CALENDAR
HOUSE BILL NO. 416
"An Act adopting and relating to the Uniform Prudent Management
of Institutional Funds Act; relating to the investment of money
for charitable purposes by institutions, including governmental
institutions; and relating to the University of Alaska."
- MOVED HB 416 OUT OF COMMITTEE
HOUSE CONCURRENT RESOLUTION NO. 21
Creating and relating to the Economic Development Planning
Commission.
- HEARD & HELD
HOUSE BILL NO. 389
"An Act relating to loans made to commercial fishermen under the
Commercial Fishing Loan Act for energy efficiency upgrades; and
providing for an effective date."
- HEARD & HELD
COMMITTEE SUBSTITUTE FOR SENATE BILL NO. 269(FIN)
"An Act relating to the waiver of volume cap of recovery zone
economic development bonds authorized by 26 U.S.C. 1400U-2 and
reallocation by the Alaska Municipal Bond Bank Authority of the
waived volume cap; relating to the waiver of volume cap of
recovery zone facility bonds authorized by 26 U.S.C. 1400U-3 and
reallocation by the Alaska Industrial Development and Export
Authority of the waived volume cap; increasing the total amount
of bonds and notes that the Alaska Municipal Bond Bank Authority
may have outstanding; relating to revenue bonds and to
obligations secured by lease that are issued by the Alaska
Municipal Bond Bank Authority; relating to allocations of tax
credit and bonding limits imposed by the federal government; and
providing for an effective date."
- MOVED CSSB 269(FIN) OUT OF COMMITTEE
SENATE BILL NO. 272
"An Act relating to charges for rented motor vehicles, including
cost recovery fees, and making a violation of the rented motor
vehicle charge provisions an unfair trade practice."
- MOVED SB 272 OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB 416
SHORT TITLE: PRUDENT MANAGEMENT OF INSTITUTIONAL FUNDS
SPONSOR(s): LABOR & COMMERCE
03/17/10 (H) READ THE FIRST TIME - REFERRALS
03/17/10 (H) L&C, FIN
03/24/10 (H) L&C AT 3:15 PM BARNES 124
03/24/10 (H) Scheduled But Not Heard
04/02/10 (H) L&C AT 3:15 PM BARNES 124
04/02/10 (H) -- MEETING CANCELED --
04/05/10 (H) L&C AT 1:00 PM BARNES 124
BILL: HCR 21
SHORT TITLE: ECONOMIC DEVELOPMENT PLANNING COMMISSION
SPONSOR(s): COMMUNITY & REGIONAL AFFAIRS
02/23/10 (H) READ THE FIRST TIME - REFERRALS
02/23/10 (H) EDT, L&C
03/23/10 (H) EDT AT 5:15 PM CAPITOL 106
03/23/10 (H) Moved CSHCR 21(EDT) Out of Committee
03/23/10 (H) MINUTE(EDT)
03/25/10 (H) EDT RPT CS(EDT) 6DP
03/25/10 (H) DP: TUCK, NEUMAN, CHENAULT, CRAWFORD,
JOULE, RAMRAS
03/25/10 (H) FIN REFERRAL ADDED AFTER L&C
04/02/10 (H) L&C AT 3:15 PM BARNES 124
04/02/10 (H) -- MEETING CANCELED --
04/05/10 (H) L&C AT 1:00 PM BARNES 124
BILL: HB 389
SHORT TITLE: COMMERCIAL FISHING LOAN ACT
SPONSOR(s): SEATON
02/23/10 (H) READ THE FIRST TIME - REFERRALS
02/23/10 (H) FSH, RES
03/16/10 (H) FSH AT 10:15 AM BARNES 124
03/16/10 (H) Heard & Held
03/16/10 (H) MINUTE(FSH)
03/22/10 (H) FSH AT 3:00 PM CAPITOL 106
03/22/10 (H) Moved CSHB 389(FSH) Out of Committee
03/22/10 (H) MINUTE(FSH)
03/23/10 (H) FSH RPT CS(FSH) NT 3DP 2NR
03/23/10 (H) DP: MUNOZ, BUCH, EDGMON
03/23/10 (H) NR: KAWASAKI, KELLER
03/23/10 (H) RES REFERRAL REMOVED
03/23/10 (H) L&C REFERRAL ADDED
04/05/10 (H) L&C AT 1:00 PM BARNES 124
BILL: SB 269
SHORT TITLE: ECON. STIMULUS BONDS: REALLOCATION/WAIVER
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
02/10/10 (S) READ THE FIRST TIME - REFERRALS
02/10/10 (S) FIN
02/15/10 (S) FIN AT 9:00 AM SENATE FINANCE 532
02/15/10 (S) Heard & Held
02/15/10 (S) MINUTE(FIN)
03/08/10 (S) FIN AT 9:00 AM SENATE FINANCE 532
03/08/10 (S) Scheduled But Not Heard
03/10/10 (S) FIN RPT CS 6DP NEW TITLE
03/10/10 (S) DP: HOFFMAN, STEDMAN, HUGGINS, THOMAS,
EGAN, ELLIS
03/10/10 (S) FIN AT 9:00 AM SENATE FINANCE 532
03/10/10 (S) Moved CSSB 269(FIN) Out of Committee
03/10/10 (S) MINUTE(FIN)
03/17/10 (S) TRANSMITTED TO (H)
03/17/10 (S) VERSION: CSSB 269(FIN)
03/19/10 (H) READ THE FIRST TIME - REFERRALS
03/19/10 (H) L&C, FIN
04/02/10 (H) L&C AT 3:15 PM BARNES 124
04/02/10 (H) -- MEETING CANCELED --
04/05/10 (H) L&C AT 1:00 PM BARNES 124
BILL: SB 272
SHORT TITLE: RENTAL CAR CHARGES
SPONSOR(s): HUGGINS
02/10/10 (S) READ THE FIRST TIME - REFERRALS
02/10/10 (S) TRA, L&C
02/23/10 (S) TRA AT 1:00 PM BUTROVICH 205
02/23/10 (S) Moved SB 272 Out of Committee
02/23/10 (S) MINUTE(TRA)
02/24/10 (S) TRA RPT 4DP
02/24/10 (S) DP: MENARD, MEYER, PASKVAN, DAVIS
03/11/10 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
03/11/10 (S) Moved SB 272 Out of Committee
03/11/10 (S) MINUTE(L&C)
03/12/10 (S) L&C RPT 5DP
03/12/10 (S) DP: PASKVAN, MEYER, THOMAS, BUNDE,
DAVIS
03/15/10 (S) TRANSMITTED TO (H)
03/15/10 (S) VERSION: SB 272
03/17/10 (H) READ THE FIRST TIME - REFERRALS
03/17/10 (H) TRA, L&C
03/23/10 (H) TRA AT 1:00 PM CAPITOL 17
03/23/10 (H) Moved Out of Committee
03/23/10 (H) MINUTE(TRA)
03/24/10 (H) TRA RPT 2DP 1NR 1AM
03/24/10 (H) DP: T.WILSON, PETERSEN
03/24/10 (H) NR: MUNOZ
03/24/10 (H) AM: GRUENBERG
04/02/10 (H) L&C AT 3:15 PM BARNES 124
04/02/10 (H) -- MEETING CANCELED --
04/05/10 (H) L&C AT 1:00 PM BARNES 124
WITNESS REGISTER
KONRAD JACKSON, Staff
Representative Kurt Olson
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 416 on behalf of the sponsor,
Representative Kurt Olson, Chair, House Labor & Commerce
Committee.
JIM LYNCH, Treasurer
University of Alaska Foundation
Anchorage, Alaska
POSITION STATEMENT: Testified during the discussion of HB 416.
GRANT CALLOW, Member
Alaska Uniform Law Commissioner
National Conference of Commissioners on Uniform State Laws
(NCCUSL)
Anchorage, Alaska
POSITION STATEMENT: Testified during the discussion of HB 416.
ERIC WOHLFORTH, Attorney
Wohlforth, Johnson, Brecht, Cartledge, & Brooking A Professional
Corporation (PC)
Anchorage, Alaska
POSITION STATEMENT: Testified during the discussion of HB 416.
ROB EARL, Staff
Representative Bob Herron
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented a PowerPoint on behalf of the
prime sponsor of HCR 21.
ERIN HARRINGTON, Staff
Representative Alan Austerman
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented a PowerPoint during the
discussion of HCR 21.
KATIE KOESTER, Staff
Representative Paul Seaton
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 389 on behalf of the prime
sponsor.
GREG WINEGAR, Director
Division of Investments
Department of Commerce, Community, & Economic Development
(DCCED)
Juneau, Alaska
POSITION STATEMENT: Testified and answered questions during the
discussion of HB 389.
DEVEN MITCHELL
Alaska Municipal Bond Bank Authority
Department of Revenue (DOR)
Anchorage, Alaska
POSITION STATEMENT: Testified and answered questions during the
discussion of SB 269.
KATHERINE DODGE
Fairbanks North Star Borough
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of SB 269.
EDRA MORLEDGE, Staff
Senator Charlie Huggins
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented SB 272 on behalf of the prime
sponsor.
SHANE SKINNER, Controller/Business Manager
Enterprise Rental Cars
Renton, Washington
POSITION STATEMENT: Testified and answered questions during the
discussion of SB 272.
ACTION NARRATIVE
1:11:49 PM
CHAIR KURT OLSON called the House Labor and Commerce Standing
Committee meeting to order at 1:11 p.m.
1:11:51 PM
Representatives Lynn, Buch, Holmes, T. Wilson, and Olson were
present at the call to order. Representative Chenault arrived
as the meeting was in progress.
1:11:59 PM
HB 416-PRUDENT MANAGEMENT OF INSTITUTIONAL FUNDS
1:12:14 PM
CHAIR OLSON announced that the first order of business would be
HOUSE BILL NO. 416, "An Act adopting and relating to the Uniform
Prudent Management of Institutional Funds Act; relating to the
investment of money for charitable purposes by institutions,
including governmental institutions; and relating to the
University of Alaska."
1:12:18 PM
KONRAD JACKSON, Staff, Representative Kurt Olson, Alaska State
Legislature, paraphrased from the sponsor statement, which read
[original punctuation provided]:
HB 416 would allow the State of Alaska to adopt the
Uniform Prudent Management of Institutional Funds Act
(UPMIFA).
UPMIFA replaces obsolete rules and concepts of
investment and management of endowments and charitable
funds currently in use. It provides current, industry
best practices guidelines, essential to proper
management.
HB 416 is will help administrators fulfill their
fiduciary responsibilities to the funds they manage.
Clear definitions on prudent practices and applicable
standards are laid out for administrators of
charitable funds and endowments.
The UPMIFA will assist nonprofits and volunteer
trustees to minimize exposure to disputes and legal
challenges over issues related to currently unclear
administrative rules and practices.
Traditional trust principles regarding the
distribution of what might otherwise be considered the
corpus differ from the UPMIFA. In conjunction with
Financial Accounting Standards Board requirements,
UPMIFA allows advances against future earnings to the
extent such advances are prudent and consistent with
the mission and purpose of the endowment.
At present, only 3 other states have not adopted or
introduced UPMIFA legislation.
1:15:23 PM
JIM LYNCH, Treasurer, University of Alaska Foundation, stated
that he has managed the endowments for the University of Alaska
for the past 25 years. He related that he worked with Senator
Paskvan on the companion bill. This bill sets out responsible
practices for management of charitable funds, consistent with
what the legislature has previously adopted for trusts. He
explained that this legislation has already been adopted by 43
states, including the District of Columbia and the U.S. Virgin
Islands. It essentially incorporates requirements and
considerations that provide for accountability and a
determination of prudent actions. It allows administrators the
flexibility needed to manage endowments during the volatile
market conditions. It is difficult to manage endowments when
income is "jumping up and down" every year. He stated he cannot
tell students who applied for and were awarded scholarships that
they are no longer available due to market fluctuations.
MR. LYNCH related the bill would clarify outdated provisions,
although most of the updates affect East Coast colleges that
have been operating for several hundred years, often containing
some peculiar provisions. This bill would reduce the exposure
for non-profit entities and their trustees that may not be
familiar with nuances. In Alaska, without any laws that apply,
it is difficult to sort out responsibilities. He referred to
two sections that directly address the UA Board of Regents, to
indicate how the Board of Regents will follow the provisions of
HB 416. The bill corrects unintended consequence of 2005
statutory changes on retirement bills. The Board of Regents
authority for investment of funds and the endowments came from a
cross reference that allowed the Board of Regents the same
authority for the endowments as the state pension committee has
for the pension funds. These represent the fiduciary
responsibilities, but when the Alaska Retirement Management
Board was created, the new statute references changed. Instead,
this bill would directly address the responsibilities that apply
to the Board of Regents endowment administration and non-profit
funds.
1:20:23 PM
REPRESENTATIVE HOLMES referred to page 6, line 19, to the
definition of "endowment fund ." She read, "...which does not
include assets of an institution designated by an institution as
an endowment fund for its own use;."
MR. LYNCH answered that the definition of an endowment fund is
fairly broad and this definition would exclude those funds which
are designated by the board as endowments. He referred to them
as quasi-endowments, which are treated like endowments but are
available to creditors and are unrestricted. The designation
was set up by the administrative board and can be changed by the
board. That is the distinction between the "true endowments:
and "quasi-endowments." This definition would clarify that
endowments created by a board are not controlled by this
statute. They are unrestricted funds and the board will make
the determinations. The other endowments are restricted by
donors and the institution cannot change the restrictions.
Thus, when a donor donates unrestricted funds, the board can use
the funds for anything it chooses, but if the donor designated
funds to be used for the math department, the UA would need to
abide by the restriction.
1:23:33 PM
REPRESENTATIVE HOLMES referred to page 4, to line 7 to gifts
that "create an endowment fund of permanent duration." She
asked for clarification.
MR. LYNCH explained that means "in perpetuity." Thus, if the UA
receives an endowment for a specific purposed then the
restrictions apply. If the funds are be used for the math
department. Otherwise, if the need over time becomes illegal or
improper, the UA must go back to the court to make a
determination on what happens to the money. This bill would
also create a provision for small endowments of less than
$50,000 for an expedited procedure since going back to court is
expensive. Thus, the UA would go through the Department of Law
and this provision would allow the endowment to use the funds
for a purpose as closely related to the purposed intent. If the
donor states it is an "endowment" then the funds are permanent.
REPRESENTATIVE HOLMES related her understanding that the
provisions that would apply are those on page 5 under AS
13.70.040.
MR. LYNCH agreed that either the UA would go back to court or
use the expedited procedure in instances of a small endowment.
1:26:18 PM
MR. LYNCH pointed out the default nature of the bill. He
explained that essentially if other laws affect endowments, then
the other provisions would apply first, followed by the the
UPMIFA. Thus, a formal trust would take precedence over UPMIFA.
The statute provides the rules absent a donor agreement. He
restated that all of the agreements take precedent over the
statute.
1:27:38 PM
GRANT CALLOW, Member, Alaska Uniform Law Commissioner, National
Conference of Commissioners on Uniform State Laws (NCCUSL),
explained that he could answer questions on how the bill came
about and could answer any drafting questions. He offered that
Kentucky just enacted UPMIFA, so Alaska is one of five
jurisdictions that still not enacted UPMIFA. This bill would
provide much more flexibility to persons managing institutional
funds, but also provides some controls on the delegation of the
management of the funds. This bill encourages gift-giving and
charity since it provides confidence and assurances to donors
that their charitable contributions wishes will be followed.
MR. CALLOW offered that many institutional advisors were in.
Some reference to the attorney general's office. Deborah Behr,
Assistant Attorney General is also a Uniform Law Commissioner.
The Attorney General's (AG) office has reviewed the bill and
does not have any issue with the AG's role. He offered his
belief that in Alaska, it is preferable to have the
institutional funds managed here rather than elsewhere.
Enacting UPMIFA will help ensure that goal is met and will
minimize the conflict in instances in which funds are managed
outside the state, but benefit persons in the state. Thus, an
issue of conflicts of law could arise. This is one reason that
this law is designated as a uniform law and to provide for
consistency among the states. In addition to being adopted
unanimously by the states at the Commission on Uniform Laws, it
was sent to American Bar Association House of Delegates where it
was approved. This bill has been a very popular bill, he
stated.
1:31:58 PM
ERIC WOHLFORTH, Attorney, Wohlforth, Johnson, Brecht, Cartledge,
& Brooking, A Professional Corporation (PC), asked to add to the
comments already made and thanked members.
1:32:37 PM
CHAIR OLSON, after first determining no one else wished to
testify, closed public testimony on HB 416.
1:32:51 PM
REPRESENTATIVE HOLMES moved to report HB 416 out of committee
with individual recommendations and the accompanying fiscal
notes. There being no objection, HB 416 was reported from the
House Labor and Commerce Standing Committee.
1:33:20 PM
The committee took an at-ease from 1:33 p.m. to 1:35 p.m.
HCR 21-ECONOMIC DEVELOPMENT PLANNING COMMISSION
1:35:00 PM
CHAIR OLSON announced that the next order of business would be
HOUSE CONCURRENT RESOLUTION NO. 21, Creating and relating to the
Economic Development Planning Commission. [Before the Committee
was the CSHCR 21(EDT).]
1:35:31 PM
ROB EARL, Staff, Representative Bob Herron, Alaska State
Legislature, introduced himself. He explained that the bill's
prime sponsors are Representative Herron and Munoz, but
commented that Representative Austerman's office has also been
instrumental in bringing this issue forward.
1:36:00 PM
MR. EARL referred to his PowerPoint. The bill would create a 10
member Economic Development Planning Commission (EDPC) in the
legislative branch [slide 2]. The EDPC would act as a bridge to
synthesize ideas and make policy recommendations and any draft
legislation necessary for the legislature to consider. The EDPC
would report to the Legislative Budget and Audit Committee, the
Governor, and Legislative Council. The bill would sunset on
June 30, 2012.
1:36:49 PM
ERIN HARRINGTON, Staff, Representative Alan Austerman, Alaska
State Legislature, reiterated that the purpose of HCR 21 is to
integrate the legislature into some of the ongoing economic
development planning processes. She referred to a report by
Alaska Forward, which was sent to legislators.
MS. HARRINGTON explained that this effort has been led by the
Alaska Partnership for Economic Development, which is an
umbrella organization representing the Alaska Regional
Development Organizations (ARDORs) [slide 3]. Many
organizations have been involved in the process, including the
Alaska State Chamber of Commerce. Alaska Forward received a
$500,000 grant from the Denali Commission for its Phase I
effort. Alaska Forward is currently working on funding for its
Phase II tasks, which will likely result in substantive
recommendations in the spring. Another ongoing process is the
Governor's Legacy initiative, which was established by an
administrative order from the Palin Administration. This
project is "morphing" under the current governor to align with
the Alaska Forward efforts as well as working in a "work group"
effort that has resulted in significant work products.
MS. HARRINGTON related that numerous entities are involved in
effort directed at long-term, strategic planning included in
"Alaska's Economic Development 'System'" [slide 4]. This slide
identified some of the different organizations involved in
economic development efforts at the state, regional, borough,
and municipal levels. Not all organizations have the
opportunity to work with the legislature, she stated
1:39:01 PM
MS. HARRINGTON asked the question, "Is there a need for an
Economic Development Planning Commission? [slide 5]." The
ongoing economic development efforts represent a significant
investment of effort and financial resources by Alaskans. This
commission gives the legislature the opportunity to be engaged
throughout the process, which ensures legislative action is
informed by private sector participation. The EDPC responds to
identified shortcomings in previous economic development
efforts. In reviewing and researching economic development in
Alaska, it was found that in some cases when legislature action
was needed, the legislature had not had an opportunity to
proactively participate in some of the processes.
1:40:57 PM
MS. HARRINGTON listed the kinds of opportunities the commission
may identify such as: financial tools that need to be set in
place by statutory action; targeting industry "clusters";
preparing the legislature in advance of the session to address
the needs of economic development organizations; restructuring
of departments that relate to economic development [slide 6].
1:41:25 PM
MR. EARL presented slide 7, which displayed the appointment
authority for the membership of the commission. He pointed out
that eight legislators would appoint six public members, which
he hoped would lead to a diversity of geographical
representation, experience, and industry representation. The
commissioners of the Department of Commerce, Community, &
Economic Development (DCCED) and the Department of Labor &
Workforce Development (DLWD) are appointed automatically, and
are ex officio, non-voting members.
1:41:56 PM
CHAIR OLSON asked whether the House Labor and Commerce Committee
chair has appointment authority.
MR. EARL answered no.
1:42:02 PM
REPRESENTATIVE T. WILSON asked which appointment would represent
Interior Alaska.
MS. HARRINGTON responded that the EDPC does not currently have
geographic definitions for the appointments. She explained that
with the Finance Co-Chairs of both bodies, the Senate President,
the House Speaker, and the House and Senate Minority Leaders
making appointments; the hope is to achieve diversity. As it
currently stands, there is not any geographic definition of the
membership.
1:42:48 PM
MR. EARL continued. He discussed a timeline for HCR 21 as
follows: March, 2010, Alaska Forward Phase I Report; April 30,
2010, or when members are appointed, whichever is earlier,
commission begins work; January 30, 2011, first legislative
report deadline; 2011 (tentative), Alaska Forward Phase II
report; December 15, 2011, second report deadline; June 30,
2012, sunset [slide 8].
1:43:48 PM
MR. EARL observed there is a consensus in the business community
that there is a "lack of cohesive thinking on economic
development in Alaska" [slide 9]. The Alaska Industrial
Development & Export Authority (AIDEA)'s Strategic Plan was
released this spring, the Alaska Forward's Phase I Executive
Summary, and the Alaska State Chamber of Commerce 2010 Position
Paper all mention the lack of statewide planning.
1:44:25 PM
MR. EARL reviewed the documents provided in the committee packet
[slide 10]. He referred to a Legislative Research Report:
Alaska Economic Development Organizations that Representative
Herron's office recently ordered. Additionally, Representative
Austerman has developed a website with an Economic Development
Library that he characterized as worthwhile.
1:44:54 PM
MR. EARL discussed a breakdown of the fiscal note: $130,000
total; $108,000 for commission staff; $11,000 for travel;
$11,000 for per diem [slide 11]. The fiscal note was written
under the following assumptions: three meetings require travel;
one Anchorage meeting and two Fairbanks meetings; per diem for
two days per travel meeting; three Anchorage-based members, one
Fairbanks-based member.
1:45:23 PM
REPRESENTATIVE T. WILSON asked for the bill's purpose. She
related her understanding that Alaska already has ARDORs working
together on economic development.
1:45:47 PM
MS. HARRINGTON responded that this organization does not have
any membership from the ARDORs. This proposed commission would
be comprised of legislators and private sector membership. The
goal of the proposed commission will be to develop the
legislative actions that result from recommendations of a number
of processes. This would allow the legislature to engage in
these processes proactively and make recommendations that could
be implemented through the legislative process, including
department restructuring if that would be deemed to be
appropriate.
1:46:34 PM
REPRESENTATIVE T. WILSON asked who in the administration is in
charge of economic development.
MS. HARRINGTON answered the Department of Commerce, Community, &
Economic Development (DCCED) works on economic development. She
provided some background information. Representative Austerman
chairs the DCCED Finance Subcommittee. During the course of
reviewing the department through his subcommittee's work, it
came to his attention that inadequate resources were being
applied to economic development, with only about a dozen people
dedicated to economic development. During the interim he worked
with the Department of Labor & Workforce Development CRA to
increase that effort. Thus, the EDPC is one recommendation to
proactively assist with economic development in the state.
1:47:55 PM
REPRESENTATIVE T. WILSON agreed 100 percent with knowledge of
economic development in the state. She related her concern with
the political aspect. She shared an additional concern that the
ARDORs, such as the one in Fairbanks, are not being utilized
instead of looking for other recommendations.
1:48:42 PM
MS. HARRINGTON explained that the 12 ARDORs in the state receive
less than $60,000 annually from the state. Ones that are
located in larger communities have been able to draw on other
resources, she stated. However, a number of them only employ
part-time staff to cover significant geographical areas. She
explained that the ARDORS work with different resources and are
not equipped to draft legislation to implement the ideas. This
commission would be able to draw on the legislator resources to
work to implement the recommendations made by the volunteer
organization.
1:50:10 PM
REPRESENTATIVE LYNN offered that all legislative members support
economic development. He thought it seems like just another
organization. He said he can already speak to anyone who wants
to work on economic development issues and many group
representatives currently approach him with ideas. He related
that the legislature already has a House Special Committee on
Economic Development, Trade, and Tourism. He asked if this is
actually the EDT committee's role and wondered about the
necessity of a commission sharing the same goal as other
committees.
REPRESENTATIVE LYNN asked whether it is necessary to enhance the
stage for economic development. He related that the fiscal note
is $130,000 for two years, which is a lot of money for something
that is already being done.
REPRESENTATIVE HOLMES agreed. She offered that this bill would
create a group, with one staff, comprised of unpaid people and
the volunteers that would meet three times a year. The
volunteers would have outside jobs. She stated that she
appreciates the idea of legislature's involvement and thinks the
concept is great. However, she is worried this bill would
create one more group that would "talk a little bit" but she
offered that she was not convinced the commission's efforts
would result in a product.
1:53:53 PM
CHAIR OLSON related that he did not intend to move the bill
today.
1:54:02 PM
REPRESENTATIVE HOLMES made a motion to adopt Amendment 1,
labeled 26-LS1446\P.1, Cook, 3/30/10, which read, as follows:
Page 2, line 30, following "designee":
Insert ";
(11) the president of the Alaska
Partnership for Economic Development, or the
president's designee"
CHAIR OLSON objected for purpose of discussion.
1:54:29 PM
MR. EARL offered his belief that president of the Alaska
Partnership for Economic Development would serve the proposed
commission well.
REPRESENTATIVE T. WILSON asked for clarification that this is to
add another person instead of the Commissioner of the Department
of Labor & Workforce Development.
MR. EARL answered this would be another person that would
automatically be added to serve on the proposed commission.
REPRESENTATIVE HOLMES assumed the goal was to further integrate
ongoing efforts.
MR. EARL agreed. He stated that this addition would integrate
the work performed by Alaska Forward with the proposed
commission.
1:55:56 PM
REPRESENTATIVE T. WILSON asked whether the Alaska Partnership
for Economic Development is a public or private group.
MS. HARRINGTON answered that the Alaska Partnership for Economic
Development is the umbrella organization formed by ARDORs. Up
until the formation of this group, the ARDORs did not have any
opportunity to meet and discuss work. This bill would provide
that ability. The Alaska Partnership for Economic Development
funds the Alaska Forward project.
CHAIR OLSON removed his objection.
There being no further objection, Amendment 1 was adopted
1:56:48 PM
REPRESENTATIVE HOLMES made a motion to adopt Amendment 2,
labeled 26-LS1446\P.2, Cook, 3/30/10, which read as follows:
Page 3, line 16:
Delete "and to the legislative budget and audit
committee"
Insert ", the Legislative Budget and Audit
Committee, the House Labor and Commerce Committee, and
the Senate Labor and Commerce Committee"
CHAIR OLSON objected.
MR. EARL related this was suggested by a member in the other
body. The suggestion was that the proposed commission report to
both of the Labor and Commerce Committees in addition to the
Legislative Budget and Audit Committee.
There being no objection, Amendment 2 was adopted.
[HCR 21 was held over.]
HB 389-COMMERCIAL FISHING LOAN ACT
1:57:49 PM
CHAIR OLSON announced that the next order of business would be
HOUSE BILL NO. 389, "An Act relating to loans made to commercial
fishermen under the Commercial Fishing Loan Act for energy
efficiency upgrades; and providing for an effective date."
1:58:45 PM
KATIE KOESTER, Staff, Representative Paul Seaton, Alaska State
Legislature, explained that this bill encourages the use of
Alaska manufactured products in Alaska's commercial fishing
vessel fleets. She paraphrased from the sponsor statement,
which read as follows [original punctuation provided]:
HB 389 allows the Department of Commerce Community and
Economic Development to give Commercial Fishing Loan
Fund borrowers a reduction in the interest rate on
their loan if 50% of their loan is spent on a product
produced or manufactured in the State of Alaska. The
Commercial Fishing Loan Fund was created by the State
of Alaska to aid commercial fishermen in securing new
equipment, quota shares and upgrades to their vessels.
The Department already allows reductions in interest
rates for borrowers who pay on time, make engine and
fuel efficiency upgrades or product quality
improvements.
The Department needs to have the discretion to
institute this rate reduction program when the market
allows it, which is why HB 389 does not make the
reduction mandatory. For example, in today's market
the interest rates are so low, if the Department were
required to issue the loan it would jeopardize the
solvency of the fund.
To be eligible for the rate reduction under HB 389 at
least 50% of borrower's purchases with the loan fund
have to be manufactured in the State of Alaska. The
definition of manufacture is "processing, developing,
or making an item into a new item with a distinct
character and use."
HB 389 promotes economic development in Alaska by
encouraging Alaska fisherman to purchase equipment
manufactured in the State of Alaska when using
Commercial Fishing Loan Fund dollars.
MS. KOESTER explained that a two percent reduction would be
offered. This would apply to two or the seven or eight programs
in the Commercial Fishing Loan Fund: the Product Quality and
Engine Efficiency Replacement Programs. The product quality
program is for purchasing items that improve the quality of the
catch, such as "slush bags" or refrigeration units. The Engine
Efficiency Replacement Program allows for engine replacement for
fuel efficiency. She emphasized this is a voluntary program.
When the market improves the reductions would be allowed since
currently reducing the interest rate would jeopardize the fund.
2:02:17 PM
GREG WINEGAR, Director, Division of Investments, Department of
Commerce, Community, & Economic Development (DCCED), offered
that the DCCED supports the concept. This would not "kick in"
right away, but anticipates that at some point interest rates
will go up. This bill will allow the department time to develop
regulations and provide lower rates for products manufactured in
the state.
2:03:02 PM
REPRESENTATIVE T. WILSON asked whether the two percent reduction
in interest rates would apply each year or if it only would
apply to new loans.
MR. WINEGAR explained that basically the rate is established at
the time the initial loan is taken out. If the loan met the
criteria at that point, the rate would stay in effect for the
life of the loan. Additionally, the division offers a "Pay on
Time Program, which allows for a one percent interest rate
reduction.
2:03:55 PM
MR. WINEGAR, in response to Representative Holmes, answered that
the one percent interest rate for the "Pay on Time Program" and
the two percent proposed reduction for purchasing the state
manufactured products would be cumulative.
2:04:20 PM
CHAIR OLSON, after first determining no one else wished to
testify, closed public testimony on HB 389.
[HB 389 was held over.]
SB 269-ECON. STIMULUS BONDS: REALLOCATION/WAIVER
2:04:57 PM
CHAIR OLSON announced that the next order of business would be
CS FOR SENATE BILL NO. 269(FIN), "An Act relating to the waiver
of volume cap of recovery zone economic development bonds
authorized by 26 U.S.C. 1400U-2 and reallocation by the Alaska
Municipal Bond Bank Authority of the waived volume cap; relating
to the waiver of volume cap of recovery zone facility bonds
authorized by 26 U.S.C. 1400U-3 and reallocation by the Alaska
Industrial Development and Export Authority of the waived volume
cap; increasing the total amount of bonds and notes that the
Alaska Municipal Bond Bank Authority may have outstanding;
relating to revenue bonds and to obligations secured by lease
that are issued by the Alaska Municipal Bond Bank Authority;
relating to allocations of tax credit and bonding limits imposed
by the federal government; and providing for an effective date."
[Before the Committee was CSSB 269(FIN)]
2:05:29 PM
DEVEN MITCHELL, Alaska Municipal Bond Bank Authority, Department
of Revenue (DOR), related that this bill contains the same
language as the bill the committee previously heard last week.
2:05:56 PM
KATHERINE DODGE, Fairbanks North Star Borough (FNSB), stated
that the FNSB supports the bill as amended.
2:06:40 PM
CHAIR OLSON, after first determining no one else wished to
testify, closed public testimony on SB 269.
REPRESENTATIVE T. WILSON moved to report CSSB 269(FIN) out of
committee with individual recommendations and the accompanying
fiscal notes. There being no objection, CSSB 269(FIN) was
reported from House Labor and Commerce Standing Committee.
2:07:27 PM
The committee took an at-ease from 2:07 p.m. to 2:10 p.m.
SB 272-RENTAL CAR CHARGES
2:10:24 PM
CHAIR OLSON announced that the final order of business would be
SENATE BILL NO. 272, "An Act relating to charges for rented
motor vehicles, including cost recovery fees, and making a
violation of the rented motor vehicle charge provisions an
unfair trade practice."
2:10:32 PM
EDRA MORLEDGE, Staff, Senator Charlie Huggins, Alaska State
Legislature, paraphrased from the sponsor statement, as follows
[original punctuation provided]:
SB 272 is a technical bill that would allow rental car
companies to do in Alaska what they already do in thirty
other states. Alaska law is currently silent on the issue
of separately-listed charges on rental car statements for
the recovery of fees. This bill would require those fees to
be listed separately and clearly identified on the rental
car agreement.
The industry standard is to turn over the rental car fleet
every twelve months and to associate the costs of licensing
the vehicles, concessions, and airport or facility-related
costs with the vehicles themselves. In addition to
government taxes and surcharges, rental car companies
assess additional "cost recovery fees" to offset those
costs. Consumers should be made aware, and be able to see
the fees they are charged, on both the rental bill and in
an online quote. This bill would provide full disclosure
and transparency of "cost recovery fees" included in rental
car agreements. In addition, this legislation would make
violating the provision an unfair trade practice.
MS. MORLEDGE stated that this bill is a consumer protection bill
modeled on car rental legislation that has passed in 30 other
states, 10 of which have passed similar legislation in past
three years. The bill previously passed the Alaska Senate
unanimously and has industry support and is supported by the
Department of Law. She encouraged the committee to support SB
272.
2:12:19 PM
REPRESENTATIVE BUCH recalled a disclosure bill that applied to
documentation fees by car dealers on sales of vehicle
documentation fee. It seemed to him that car dealers were able
to charge a fee for basically "not doing anything."
CHAIR OLSON pointed out the referenced bill applied to car
dealers and not car rental agencies.
REPRESENTATIVE BUCH suggested this bill requires similar
disclosure which would only apply to car rental agencies.
MS. MORLEDGE referred to page 2, line 19 to the definition of
car which read, "(1) "car" means motor vehicle." She related
that the bill drafter indicated this would apply to all motor
vehicle rentals.
2:13:46 PM
SHANE SKINNER, Controller/Business Manager, Enterprise Rental
Cars, clarified the car rental charges. He stated that
currently there is "nothing on the books" in Alaska on car
rental charges. This bill would clarify the allowable charges
plus it would limit the charges to those remitted to the state
for car rental taxes, airport taxes and fees, which are remitted
to airports to run the facilities, and vehicle registration
fees. This bill would cap the amount that is allowable to be
collected to the state or airport authority.
2:14:33 PM
CHAIR OLSON, after first determining no one else wished to
testify, closed public testimony on SB 272.
2:14:50 PM
REPRESENTATIVE T. WILSON moved to report SB 272 out of committee
with individual recommendations and the accompanying fiscal
notes. There being no objection, SB 272 was reported from the
House Labor and Commerce Standing Committee.
2:15:19 PM
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
2:15 p.m.