Legislature(1993 - 1994)
04/18/1993 01:20 PM Senate FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
MINUTES SENATE FINANCE COMMITTEE April 18, 1993 1:20 P.M. TAPES SFC-93, #65, Side 1 (042-end) SFC-93, #65, Side 2 (575-end) SFC-93, #67, Side 1 (000-454) CALL TO ORDER Senator Drue Pearce, Co-chair, convened the meeting at approximately 1:20 p.m. PRESENT In addition to Co-chair Pearce, Senators Jacko, Kelly, Kerttula, and Sharp were present. Co-chair Frank and Senator Rieger arrived soon after the meeting began. ALSO ATTENDING: Senator Loren Leman; Kim Elton, Executive Director, Alaska Seafood Marketing Institute; Ken Boyd, Deputy Director, Division of Oil and Gas, Dept. of Natural Resources; Paul Quesnel, lobbyist for BP Exploration, Inc.; Mike Ford and Jack Chenoweth, Legislative Counsel, Legal Services, Legislative Affairs Agency; Dave Skidmore, aide to Senator Frank; Annette Kreitzer, Aide to Senator Leman; and aides to committee members and other members of the legislature. SUMMARY INFORMATION SB 58 - PHASE OUT LONGEVITY BONUS The committee rescinded previous action adopting the "E" version of CSSB 58 (Fin) and instead adopted and REPORTED OUT the "J" version of CSSB 58 (Fin) with a "do pass" recommendation, a fiscal note from DH&SS showing a ($5.3) savings in hold harmless payments, and two notes from DOA, one showing a longevity bonus grant savings of ($500.0) and the other evidencing $11.6 in administrative costs. SB 73 - LIABILITY OF DESIGN/CONSTRUCTION PROS Brief discussion was had with Senator Leman. CSSB 73 (Fin) was REPORTED OUT of committee with individual recommendations and zero fiscal notes from the Dept. of Law and Alaska Court System. SB 145 - POSITION OF STATE MEDICAL EXAMINER Brief discussion was had. The bill was subsequently HELD in committee pending resolution of concerns regarding the fiscal note. SB 150 - OIL & GAS EXPLORATION LICENSES/LEASES Discussion was had with Senator Leman, Annette Kreitzer, Ken Boyd, and Paul Quesnel. Amendments 1 through 5 were ADOPTED. The bill was subsequently HELD in committee at the request of Co-chair Frank. SB 151 - OIL & GAS EXPLORATION INCENTIVE CREDITS Discussion was had with Senator Leman and Ken Boyd. The bill was REPORTED OUT of committee with a "do pass" recommendation and zero fiscal notes from the Dept. of Revenue and Dept. of Natural Resources. SB 155 - USE OF RENTED PROPERTY/LAW VIOLATIONS Discussion was had with Dave Skidmore and Jack Chenoweth. CSSB 155 (Jud) was REPORTED OUT of committee with a "do pass" recommendation, a $19.0 fiscal note from Dept. of Public Safety, a $10.0 note from the Dept. of Law, and a zero note from the Alaska Court System. SB 176 - MUNICIPAL INVENTORY TAX EXEMPTION:EXPORTS Brief testimony was presented by Senator Leman. The bill was then REPORTED OUT of committee with individual recommendations, a zero Senate State Affairs fiscal note for the Dept. of Commerce and Economic Development and a zero note from the Dept. of Community and Regional Affairs. SB 177 - SALMON MARKETING, TAX;ASMI BOARD & DUTIES Brief discussion was had with Kim Elton. The bill was HELD in committee for additional review. SENATE BILL NO. 58 An Act relating to the longevity bonus program. Upon convening the meeting, Co-chair Pearce directed that SB 58 be brought on for discussion. She then referenced adoption of CSSB 58 (Fin) (8-GS1022\E, Cook, 4/16/93) and noted need to rescind that action. Senator Sharp MOVED to rescind committee action adopting CSSB 58 (Fin), version "E." No objection having been raised, IT WAS SO ORDERED. (Co-chair Frank and Senator Rieger arrived at this time.) Senator Sharp MOVED for adoption of CSSB 58 (Fin) (8- GS1022\J, Cook/Chenoweth, 4/17/93). Co-chair Pearce voiced her understanding that the difference between the two versions consists of inclusion of a severability clause in the new "J" version. Senator Sharp concurred, directing attention to language within Section 4. No objection to the motion having been raised, CSSB 58 (Fin), version "J," was ADOPTED. Co-chair Pearce referenced new fiscal notes from the Dept. of Administration for the longevity bonus program and pioneer benefits program as well as a ($5.3) fiscal note from the Dept. of Health and Social Services and advised that they should accompany the bill. Senator Sharp MOVED that CSSB 58 (Finance) pass from committee with individual recommendations and the appropriate fiscal notes. Senator Kerttula OBJECTED. Co- chair Pearce called for a show of hands. The motion carried on a vote of 6 to 1, and CSSB 58 (Fin) was REPORTED OUT of committee with a $11.6 fiscal note from the Dept. of Administration for the pioneer benefits program; a note from the Dept. of Administration, longevity bonus grants, showing a savings of ($500.0); and a note from the Dept. of Health and Social Services indicating a hold harmless savings of $5.3). SENATE BILL NO. 73 An Act relating to the time for filing certain civil actions; and providing for an effective date. Co-chair Pearce directed that SB 73 be brought on for discussion and referenced a work draft CSSB 73 (Fin) (8- LS0446\J, Ford, 4/17/93). Co-chair Frank MOVED for adoption of the work draft. No objection having been raised, CSSB 73 (Fin) was ADOPTED. SENATOR LOREN LEMAN came before committee in support of the bill. He explained that CSSB 73 (Fin) removes two amendments added in the Senate Judiciary Committee. The first amendment essentially defeated the purpose of the statute of repose. The second was either unnecessary or unconstitutional. Senator Leman recommended passage of CSSB 73 (Fin). Senator Rieger inquired concerning a six-year versus ten- year limit. Senator Leman explained that the ten-year limit applies to construction and actions by design professionals. The six-year limit covers other actions. The ten-year limit is an exception from the six-year provision. MIKE FORD, legal counsel, Legal Services, Legislative Affairs Agency, came before committee. He explained that language in Sec. 2, relating to the six-year limitation, is necessary to impose the ten-year limit in Sec. 3. Sec. 3 is the heart of the bill. Sec. 2 is a technical amendment to conform to requirements of Sec. 3. Co-chair Pearce called for additional questions or comments. None were forthcoming. Senator Rieger MOVED that CSSB 73 (Fin) pass from committee with individual recommendations and accompanying fiscal notes. No objection having been raised, CSSB 73 (Fin) was REPORTED OUT of committee with zero fiscal notes from the Dept. of Law and Alaska Court System. Co-chairs Pearce and Frank and Senator Kelly signed the committee report with a "do pass" recommendation. Senators Rieger, Jacko, and Sharp signed "no recommendation." Senator Kerttula signed "Do not pass." SENATE BILL NO. 150 An Act providing for oil and gas exploration licenses, and oil and gas leases, in certain areas of the state; and providing for an effective date. Co-chair Pearce directed that SB 150 be brought on for discussion and further directed attention to CSSB 150 (O&G) and Amendments 1 through 5. SENATOR LOREN LEMAN and ANNETTE KREITZER, aide to the Senate Oil and Gas Committee, came before committee. Ms. Kreitzer said that as backup material she was providing testimony from five Senate Oil and Gas Committee hearings as well as a synopsis of the differences between SB 150 and CSSB 150 (O&G). Co-chair Pearce directed that the meeting be briefly recessed. RECESS - 1:30 P.M. RECONVENE - 1:38 P.M. Senator Leman explained that the Governor's bill, SB 150, presents an alternative approach for exploration and exploration licensing. It expands available exploration options. It does not replace the existing competitive leasing program; it merely adds another option. The main objective of the bill is to "get exploration going in areas of the state that have drawn little or no attention under current leasing programs." The methodology would remove leasing requirements calling for "up-front cash" and instead devote financial input to exploration. Companies will propose a site for licensing and a work plan for the site. Licenses would issue based on the highest work commitment. Senator Leman next outlined differences between the original bill and CSSB 150 (O&G): 1. While the original bill placed no geographic restrictions on application of the bill, the Oil and Gas version excludes the North Slope and portions of Cook Inlet. Areas north of the Umiat baseline remain available for leasing under the regular lease program. The feeling was that excluded areas would not meet the requirement that the new license arrangement apply to large tracts about which little is known. 2. The original bill allowed the licensee to hold the entire licensed area for up to ten years. The Oil and Gas version requires relinquishment of 25% after the fourth year and 10% of the total land each year thereafter. Senator Leman acknowledged that the committee considered a less aggressive relinquishment schedule of 10% of remaining land but, in the end, opted for more rapid relinquishment. Relinquishment provisions are intended to prevent the hoarding of large tracts of land. 3. The original bill called for bonding of the total work commitment. The Oil and Gas version requires bonding of only 10% of the annual work commitment. Testimony indicated that bonding is extremely difficult for independent exploration to obtain. The state does not stand to lose much. If a licensee defaults, the tract of land would merely be available for license to someone else. 4. The original bill provided for an oral outcry auction and award on the highest work commitment. CSSB 150 (O&G) requires sealed competitive bids. It also defines what expenses can be charged as direct exploration expenditures. Concern was expressed that indirect exploration work performed somewhere outside the state could be charged. 5. The original bill provided that up to 30,000 acre leases would not count against the existing 1 million aggregate limit. CSSB 150 (O&G) would count these leases against that limit. 6. The original bill set the license fee at $1 acre. The Oil and Gas version says "up to $1/acre." That provides the commissioner flexibility to allow for less than that in areas where it is difficult to attract exploration. Interior basins were specifically noted. The committee did not want to restrict exploration because of the license rental cost. 7. Proof of financial responsibility was not addressed in the original bill. Requirements proposed by Senator Sharp for inclusion in CSSB 150 (O&G) define these requirements based on the size of the production facility. It also reduces proof of financial provisions for on-shore exploration to $1 million. Discussion followed between Senator Rieger and Senator Leman concerning opportunities for speculation under the proposed bill. Senator Leman stressed that in order to receive an exploration license, the applicant must make a commitment for a total amount of work broken down in annual work commitments. The commissioner will then decide whether or not to issue the license. If there is competition for a particular tract of land, the license will issue on a best interest finding to the proposal offering the greatest work commitment. If the proposal is not in the best interest of the state, and there is no competition for the tract, the commissioner will not issue the license. Senator Leman also noted bond requirements attached to annual work commitments. Further discussion followed between Senator Rieger and Senator Leman regarding conversion of an exploration license to a lease under the existing lease program. Senator Leman noted that areas converted to lease would be "very much smaller" than exploration license areas. Leases are likely to encompass areas of discovery. Responding to an additional question by Senator Rieger, Senator Leman explained that the public process (the best interest finding) is conducted prior to issuance of the exploration license. Co-chair Frank inquired concerning need for license provisions allowing for exclusive right to explore an area as opposed to an arrangement analogous to mineral entry. Senator Leman voiced his understanding that something must be provided in return for the commitment to exploratory work. The actual value of such work might be comparable to what one would bid at a lease sale. KEN BOYD, Deputy Director, Division of Oil and Gas, Dept. of Natural Resources, came before committee in response to a question from Co-chair Frank. Mr. Boyd attested to need for lease arrangements to prevent chaos in administration of state lands. The five-year oil and gas leasing schedule is the most orderly and predictable nationwide. It provides industry a means of planning, allows the department opportunity to establish terms and conditions in the best interest of the state, and allows ample time for the public process. A helter-skelter approach where companies explore at will and subsequently lease areas of discovery would be extremely disorderly. It would also be difficult for the state to determine the value of the land in the best interest of the people. An orderly schedule allows the department to systematically evaluate lands as technology changes. It also provides the additional benefit of being able to review seismic data in the same time frame as industry. Extended discussion followed between Co-chair Frank and Mr. Boyd regarding differences between mineral drilling and oil and gas exploration. In the course of further discussion of conversion provisions, Mr. Boyd explained that a royalty--a minimum of 12.5%-- would be established, up front, in the lease. Responding to further questions from Co-chair Frank, Mr. Boyd spoke at length to the workings of the current lease program. Additional discussion followed regarding the size of lease and exploration areas as well as existing fields and productive zones. End, SFC-93, #65, Side 1 Begin, SFC-93, #65, Side 2 Co-chair Frank continued to voice concern over exclusive right provisions of the bill, asking if the department envisioned problems associated with interest by more than one entity in a particular area if exclusive provisions were removed. Mr. Boyd stressed that interested companies would all have the opportunity to compete for an exploration license. The one that commits to the most work on an annual basis would earn the right to explore. Minimal work commitment levels and a method for valuing proposed work will be established in regulations. Mr. Boyd explained that the bill is designed to attract "anyone who wants to do work in Alaska." Bonding requirements and the small up-front application fee should accommodate small companies. Small companies also have the opportunity to compete in the state's five-year leasing schedule. Senator Leman added that CSSB 150 (O&G) makes exploration licensing more attractive to smaller companies without disadvantaging larger companies. The intent of the legislation is to make the opportunity available to any company wishing to do the work. Annette Kreitzer explained that relinquishment provisions, bonding of only 10% of the annual work commitment, and definition of what expenditures would be allowed under competitive bid made the bill "more palatable" to smaller companies. Discussion followed between Co-chair Frank and Mr. Boyd regarding philosophies associated with the current lease program versus proposed exploration licensing. Mr. Boyd noted that leasing works well in areas of high potential-- known oil and gas. He attested to benefits of exploration licensing in remote areas where companies may have differing ideas on methods of exploration. Co-chair Frank spoke to proposals from constituents that the department lower the lease and bonus bid, reduce the annual lease rental, and lease more land. Mr. Boyd said that such a proposal was not discussed when the bill was before Senate Oil and Gas Committee. He then questioned ability to compete without the bonus bid and noted that leases at $5 and $10 an acre are the lowest available anywhere. Senator Sharp voiced his understanding that, under the Oil and Gas version of the bill, a company or individual may apply for an exploration license on lands anywhere in Alaska (with the exception of the North Slope and Cook Inlet) at a cost of $1 an acre or $3 per acre when the license is converted to a lease. He noted that relinquishment provisions allow the licensee, after ten years, to end up with as much acreage as an original federal lease. Senator Sharp said he was more comfortable with the Oil and Gas version than the original bill because it promotes commitments of exploration dollars in areas where there is presently no activity. In response to a question from Senator Rieger, Mr. Boyd acknowledged that leases are assignable with permission from the Dept. of Natural Resources. Further discussion ensued regarding costs and operations of the current lease program and statutory provisions contained within AS 38.05.180(m) and (t). Referring back to the bill, Senator Rieger voiced his understanding that the exploration license would not entail a plan of development. Mr. Boyd concurred. Since the license applies to tracts of land about which little is known, it would be difficult to develop such a plan. In response to comments by Senator Kerttula regarding lease rates, Mr. Boyd stressed that the philosophy is to allow as many dollars as possible to be "put into the ground." The goal of the program is exploration rather than collection of fees. Co-chair Pearce directed attention to Amendment No. 1 which she explained was proposed by the administration. She further directed attention to associated correspondence from James Eason, Director of the division of oil and gas. Senator Sharp MOVED for adoption of Amendment No. 1 for discussion purposes. Senator Kerttula OBJECTED. Mr. Boyd explained that under provisions of the current oil and gas lease program, if a sale is postponed past the quarter in which it was scheduled to occur, the department must "go through the whole process again." It thus takes two years to get the sale back on the schedule. The amendment provides the commissioner a 90-day period in which to move the sale. The statute was originally written in response to oil company concern that the commissioner might remove lease sales from the schedule. In actuality, under current provisions, those with no interest in the state's leasing program, in a pro-development sense, could litigate and cause the state to miss its scheduled date. Once that occurs, the sale is effectively delayed for two years. Co-chair Pearce asked if the title of the legislation would have to be amended to accommodate Amendment No. 1. Both Senator Sharp and Mr. Boyd responded affirmatively and directed attention to Amendment No. 4 which would effect the needed title change. Senator Sharp then AMENDED his motion for adoption of Amendment no. 1 to include the title change within Amendment No. 4. Senator Kerttula asked that representatives of the oil and gas industries speak to the amendment. PAUL QUESNEL, B P Exploration, came before committee, voicing support for both CSSB 150 (O&G) and the proposed amendment. Co-chair Pearce called for a show of hands on the motion for adoption of Amendments 1 and 4. The motion carried on a vote of 4 to 1, and Amendments 1 and 4 were ADOPTED. Senator Sharp MOVED for adoption of Amendment No. 2. Senator Leman explained that it would add "in total and for each year of the license" to commitment language at page 3, line 11. The amending language was actually adopted by the Senate Oil and Gas Committee but inadvertently omitted from CSSB 150 (O&G). Co-chair Pearce called for objections to the motion. No objection having been raised, Amendment No. 2 was ADOPTED. Senator Sharp MOVED for adoption of Amendment No. 3. Senator Leman explained that deletion of the word "minimum" at page 7, line 12, would conform language relating to the annual work commitment to like language throughout the bill. No objection having been raised, Amendment No. 3 was ADOPTED. Senator Sharp MOVED for adoption of Amendment No. 5. Senator Leman indicated that deletion of "the remaining land" at page 5, line 4, would apply 10% relinquishment provisions to the total land area. It provides a more aggressive relinquishment schedule. Senator Rieger inquired concerning whether relinquishment percentages could mathematically be accomplished over the ten-year time period. Senator Leman explained that at the end of nine years, a licensee would have relinquished 75% of the tract and 85% at the end of the tenth year. The licensee could then convert the remaining acreage to lease. No objection having been raised, Amendment No. 5 was ADOPTED. Senator Rieger directed attention to conversion provisions at page 7, line 19, and inquired regarding application of AS 38.05.180 subsections not spelled out within the bill. Annette Kreitzer said that she advised the drafter of Senate Oil and Gas Committee intent that leases not be subject to subsections other than those cited in the legislation. The drafter did not indicate need for specific exclusions within the bill. Co-chair Pearce called for additional testimony on the bill. None was forthcoming. She then announced that Co-chair Frank had asked that SB 150 be HELD in committee for additional review. SENATE BILL NO. 151 An Act providing for oil and gas exploration incentive credits for certain activities on certain land in the state; and providing for an effective date. Co-chair Pearce directed that SB 151 be brought on for discussion and noted accompany zero fiscal notes and a letter from the Governor. SENATOR LOREN LEMAN again came before committee. He explained that SB 151 was heard by Senate Oil and Gas and passed from committee in its original form. KEN BOYD, Director, Division of Oil and Gas, Dept. of Natural Resources, spoke in support of the bill. He explained that exploration incentive credits for state lands presently exist in Title 38. They have been used to encourage exploration. The program allows the state to provide relief for the cost of drilling wells, up to a maximum of 50%. In the ten years the program has been in place, the state has forgiven approximately $40 million in revenue. The incentive credit can be applied against certain taxes and royalty or rental payments. SB 151 extends exploration incentive credits to all lands in Alaska--federal, state, private, etc. End, SFC-93, #65, Side 2 Begin, SFC-93, #67, Side 1 Mr. Boyd noted that well data received by the state would be held confidential for 25 months from the date of receipt and then released. That is a departure from Title 38 which allows for extended confidentiality. Seismic or other geophysical data provided to the state may be used by the state and shown by the state (in a marketing sense to promote state lands) but may not be given away. At the present time, the amount of the exploration incentive credit is up to 50%. Under SB 151 it is 50% on state-owned land and 25% on other land. Exploration on non-state land would not be as beneficial to the state. Co-chair Pearce asked if opposition to the bill had been raised when it was before Senate Oil and Gas. Senator Leman responded negatively but advised that Senator Adams had moved to amend the bill to apply up to 50% credit to all lands. That amendment did not pass. Co-chair Pearce called for additional testimony on the bill. None was forthcoming. Senator Sharp MOVED that SB 151 pass from committee with individual recommendations and accompanying zero fiscal notes. No objection having been raised, SB 151 was REPORTED OUT of committee with zero notes from the Dept. of Revenue and Dept. of Natural Resources. Co-chair Pearce and Senators Jacko, Kelly, Rieger, and Sharp signed the committee report with a "do pass" recommendation. Senator Kerttula signed "Do not pass." Co-chair Frank was temporarily absent from the meeting and did not sign. Co-chair Pearce directed that the meeting be briefly recessed. RECESS - 3:00 P.M. RECONVENE - 3:20 P.M. SENATE BILL NO. 176 An Act relating to the municipal tax exemption for inventories intended for export. Upon reconvening the meeting, Co-chair Pearce directed that SB 176 be brought on for discussion. SENATOR LOREN LEMAN again came before committee. He explained that, under current statutes, municipalities may provide tax exemptions on personal property inventories intended for export. However, the exemption is limited to the portion of the tax to accrue to the municipality and may not be applied to tax dollars that would flow to school districts. The proposed bill would delete that prohibition and allow municipalities to exempt the full amount of tax on inventories held for export outside of Alaska. This change was requested by the Anchorage Development Corporation because it feels the state will not be able to attract export business unless this impediment is removed. Co-chair Pearce called for additional testimony. None was forthcoming. Senator Sharp MOVED that SB 176 pass from committee with individual recommendations. No objection having been raised, SB 176 was REPORTED OUT of committee with a zero fiscal note from the Dept. of Community and Regional Affairs and a zero Senate State Affairs note for the Dept. of Commerce and Economic Development. Co-chairs Pearce and Frank signed the committee report with a "do pass" recommendation. Senators Jacko, Kelly, Rieger, and Sharp signed "no recommendation." Senator Kerttula was absent from the meeting and did not sign. SENATE BILL NO. 145 An Act establishing the position of state medical examiner; and relating to preparation of death certificates. Co-chair Pearce directed that SB 145 be brought on for discussion. Senator Rieger explained that responsibility for autopsies presently rests with a coroner. He or she determines whether the autopsy is necessary, a physician performs the examination, and the Dept. of Health and Social Services pays associated costs. Courts may also order autopsies. In instances where it seems clear that an autopsy is not warranted, there is no one to say "no." Courts are in a bind because the benefit of the doubt favors performing the autopsy. SB 145 would allow a physician in the Dept. of Health and Social Services to perform autopsies and decide whether or not to perform them. This approach will reduce costs by eliminating unnecessary exams. The FY 94 Senate budget for the Dept. of Health and Social Services is predicated upon passage of SB 145. Co-chair Pearce referenced a $429.0 fiscal note from the Dept. of Health and Social Services and asked if it would be in addition to funding included in the budget. Senator Rieger responded affirmatively but acknowledged that he was not comfortable with the note. He concurred, however, that the full amount of the medical examiner position would have to be paid. The request in the H&SS budget was reduced from over $900.0 to approximately $450.0. Senator Rieger and Co- chair Frank agreed upon need to work on the note. SB 145 was HELD in committee pending that effort. SENATE BILL NO. 155 An Act relating to landlords and tenants, to termination of tenancies and recovery of rental premises, to tenant responsibilities, to the civil remedies of forcible entry and detainer and nuisance abatement, and to the duties of peace officers to notify landlords of arrests involving certain illegal activity on rental premises. Co-chair Pearce directed that SB 155 be brought on for discussion. Co-chair Frank explained that the bill was introduced to continue previous legislative work on landlord tenant law and in response to constituent requests for greater balance in the law. The proposed would make the following changes: 1. It reduces from ten days to five days the time a landlord must wait prior to commencing the eviction process when a tenant fails to pay rent. 2. It amends nuisance abatement statutes to include drug and alcohol offenses as grounds for relief. 3. It requires peace officers to notify landlords if a tenant has been arrested for a drug and/or alcohol crime. 4. It makes legal obligations of tenants more stringent and rewords the statutory definition of damages. 5. It adds to a landlord's ability to seek removal of an abusive tenant through inclusion of a premises condition statement and contents inventory in the rental agreement through the summary eviction process for extremely destructive tenants. Co-chair Frank acknowledged that some individuals characterize any changes in landlord tenant law as detrimental to tenants. He voiced his belief that the foregoing is not true and cautioned that statutes making it difficult for landlords to remove nonpaying or destructive tenants result in higher security deposits and increased background and credit scrutiny. Restrictions on landlords result in less availability for low-income tenants and young people seeking to rent. Senator Rieger asked for an explanation of Sec. 9 provisions relating to "action against tenant occupying premises abated as nuisance." JACK CHENOWETH, legal counsel, Legal Services, Legislative Affairs Agency, came before committee. He explained that the bill opens up forcible entry and detainer provisions and allows a landlord to evict tenants if the premises is used for purposes such as prostitution, illegal drug or alcohol activity, etc. In situations where a tenant is illegally using the premises or condoning illegal use of the premises for one or more of those purposes, the landlord may take advantage of the abatement mechanism. Under that mechanism the landlord may ask that use of the premises be abated as a nuisance. Section 9 says that when such an order is obtained from the court, the landlord may use the order as prima facie evidence in eviction proceedings. Senator Rieger voiced need to review SB 178 (CIVIL NUISANCE ACTIONS) to ensure that provisions therein would not preclude an action to evict a tenant as a nuisance. Mr. Chenoweth said he had not reviewed the bill. Co-chair Pearce directed that the meeting be briefly recessed for that review. RECESS - 3:00 P.M. RECONVENE - 3:10 P.M. Upon reconvening, Mr. Chenoweth observed that SB 178 substantially changes the law relating to private nuisance actions. An exception is made, however, for abatements. Mr. Chenoweth advised that his reading indicates that abatement law, AS 09.51.070-240 is not affected by CSSB 178 (Jud). Co-chair Pearce called for additional questions or testimony on SB 155. None were forthcoming. Co-chair Frank MOVED for passage of CSSB 155 (Jud) with individual recommendations and the accompany fiscal notes. Senator Sharp OBJECTED for the purpose of a question. He then REMOVED his objection. Senator Jacko subsequently voiced his OBJECTION. Co-chair Pearce called for a show of hands. The motion carried on a vote of 5 to 1, and CSSB 155 (Jud) was REPORTED OUT of committee with a $19.0 note from the Dept. of Public Safety, $10.0 note from the Dept. of Law, and zero note from the Alaska Court System. Co-chairs Pearce and Frank and Senators Kelly, Rieger, and Sharp signed the committee report with a "do pass" recommendation. Senator Jacko signed "Do not pass." Senator Kerttula was absent from the meeting and did not sign. SENATE BILL NO. 177 An Act relating to salmon marketing, a salmon marketing tax, and the Alaska Seafood Marketing Institute; and providing for an effective date. Co-chair Pearce directed that SB 177 be brought on for discussion and noted that it was introduced by the Senate Finance Committee. It relates to an additional marketing tax in an effort to make the Alaska Seafood Marketing Institute fully self-supporting. The legislation is also tied to the Senate version of the operating budget. Co- chair Pearce voiced her further understanding that general fund moneys for ASMI were originally deleted from the Governor's budget. The Dept. of Commerce subsequently requested that they be reinstated while the department works with fishing groups in an effort to make ASMI self- supporting. The general fund dollars were thus returned to the budget with the expectation that something will happen within the year. KIM ELTON, Executive Director, Alaska Seafood Marketing Institute, came before committee. He said that the bill would establish a 1% tax on salmon processors. The tax would flow to the general fund for legislative reappropriation back to ASMI. At least 90% of the funds would be used for domestic marketing of salmon. Up to 10% would establish a market price information service for salmon fishermen. The legislation also increases the ASMI board of directors from eighteen to twenty-five to establish equity (12 fishermen and 12 processors). The bill also includes provisions for a public member on the board. Since the effective date is July 1, 1993, most of the 1993 salmon fishing season would be covered by the bill. Expected revenue is estimated at between $3 to $5.7 million. Mr. Elton concluded his remarks by observing that the impetus for the bill comes from the previous legislature. It has substantially evolved since that time due, largely, to the efforts of individuals in the salmon harvesting community. He advised that he was comfortable with the legislation and voiced his understanding that the United Fishermen of Alaska are also. He acknowledged that the industry is not completely united behind the tax bill. Senator Kelly asked how passage or failure to pass the bill would impact the budget. Co-chair Pearce explained that the Senate budget for the Dept. of Commerce and Economic Development is predicated upon passage. It replaces approximately $900.0 in general funds with revenues from the proposed tax. The House did not proceed in that manner. A final decision on funding will be made at conference. Similar House legislation is presently in House Rules. Co-chair Pearce directed that SB 177 be HELD in committee for additional review. ADJOURNMENT The meeting was adjourned at approximately 3:50 p.m.