Legislature(2013 - 2014)SENATE FINANCE 532

04/01/2014 01:30 PM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Bills Previously Heard/Scheduled TELECONFERENCED
= SB 178 PASSENGER VEHICLE RENTAL TAX
Heard & Held
= HB 305 JUNK DEALER & METAL SCRAPPER LICENSING
Heard & Held
= HB 297 HOME ENERGY RATING SYSTEMS
Heard & Held
                 SENATE FINANCE COMMITTEE                                                                                       
                       April 1, 2014                                                                                            
                         1:40 p.m.                                                                                              
                                                                                                                                
                                                                                                                                
1:40:23 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Meyer  called the Senate Finance  Committee meeting                                                                    
to order at 1:40 p.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Pete Kelly, Co-Chair                                                                                                    
Senator Kevin Meyer, Co-Chair                                                                                                   
Senator Anna Fairclough, Vice-Chair                                                                                             
Senator Click Bishop                                                                                                            
Senator Mike Dunleavy                                                                                                           
Senator Lyman Hoffman                                                                                                           
Senator Donny Olson                                                                                                             
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Rudy VonImhof,  President, Delta  Leasing, LLC;  Tom Wright,                                                                    
Staff,  Representative  Mike Chenault;  Representative  Mike                                                                    
Chenault;  Representative Lance  Pruitt; Dirk  Craft, Staff,                                                                    
Representative   Lance  Pruitt;   Robert  Brean,   Director,                                                                    
Research  and  Rural  Development,  Alaska  Housing  Finance                                                                    
Corporation (AHFC);                                                                                                             
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Matt Fonder, Director, Tax  Division, Department of Revenue;                                                                    
Jon  Cook,   Chief  Financial  Officer,   Airport  Equipment                                                                    
Rentals  Inc.,  Fairbanks;   Randy  Johnson,  Tyler  Rental,                                                                    
Ketchikan; Louise Bray,  Shnitzer Steel, Tacoma, Washington;                                                                    
Phil  Steyer,  Chugach  Electrical  Association,  Anchorage;                                                                    
John  MacKinnon, Executive  Director, Alaska  Association of                                                                    
General   Contractors,   Anchorage;   Al   Barrette,   Self,                                                                    
Fairbanks.                                                                                                                      
                                                                                                                                
SUMMARY                                                                                                                       
SB 178    PASSENGER VEHICLE RENTAL TAX                                                                                          
                                                                                                                                
          SB 178 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
                                                                                                                                
CSHB 297(FIN)                                                                                                                   
          HOME ENERGY RATING SYSTEMS                                                                                            
                                                                                                                                
          CSHB 297(FIN) was HEARD and HELD in committee for                                                                     
          further consideration.                                                                                                
                                                                                                                                
CSHB 305(FIN)                                                                                                                   
          JUNK DEALER & METAL SCRAPPER LICENSING                                                                                
                                                                                                                                
          CSHB 305(FIN) was HEARD and HELD in committee for                                                                     
          further consideration.                                                                                                
                                                                                                                                
SENATE BILL NO. 178                                                                                                           
                                                                                                                                
     "An Act relating to the application of the passenger                                                                       
     vehicle rental tax; and providing for an effective                                                                         
     date."                                                                                                                     
                                                                                                                                
1:42:13 PM                                                                                                                    
                                                                                                                                
Senator Hoffman  inquired how  the passenger  vehicle rental                                                                    
tax would  be implemented, particularly for  vehicles rented                                                                    
for use only on the North Slope.                                                                                                
                                                                                                                                
MATT FONDER,  DIRECTOR, TAX DIVISION, DEPARTMENT  OF REVENUE                                                                    
(via  teleconference), responded  that all  vehicles on  the                                                                    
North Slope, rented for a period  of at least 28 days, would                                                                    
be exempt from the tax.                                                                                                         
                                                                                                                                
Senator Hoffman surmised  that a vehicle rented  for 21 days                                                                    
would be subject to the tax.                                                                                                    
                                                                                                                                
Mr. Fonder replied in the affirmative.                                                                                          
                                                                                                                                
Co-Chair Meyer understood that  vehicles that were purchased                                                                    
on the  North Slope did not  need to be registered  and were                                                                    
not subject to a registration tax.                                                                                              
Mr. Fonder  responded that  the question  was not  under the                                                                    
per-view of the Department of Revenue.                                                                                          
                                                                                                                                
1:43:58 PM                                                                                                                    
Senator  Olson inquired  if Co-Chair  Meyer referencing  the                                                                    
road system that was maintained by the North Slope Borough.                                                                     
                                                                                                                                
Co-Chair Meyer responded in the affirmative.                                                                                    
                                                                                                                                
Senator  Olson explained  that the  North Slope  Borough did                                                                    
not require the  tax on roads that it  owned and maintained,                                                                    
but that  not all roads  were included; the  Dalton Highway,                                                                    
for example, was part of  the state system and would require                                                                    
payment of a registration tax.                                                                                                  
                                                                                                                                
Co-Chair Meyer  thought that roads at  Prudhoe Bay, Kuparuk,                                                                    
and Alpine were all exempt from having registered vehicles.                                                                     
                                                                                                                                
Senator Olson pointed out that those were private roads.                                                                        
                                                                                                                                
1:44:33 PM                                                                                                                    
                                                                                                                                
Senator Hoffman inquired whether  the legislation applied to                                                                    
all  the vehicles  that were  rented  regardless of  whether                                                                    
they were driven on borough or state roads.                                                                                     
                                                                                                                                
Mr. Fonder believed  that there was a  provision in existing                                                                    
statute that pertained to driving  on a public right-of-way.                                                                    
He thought that  if a vehicle was rented in  Anchorage for a                                                                    
three  week  period,  traveled  up  the  Dalton  Highway  to                                                                    
Deadhorse,  the  passenger  vehicle   rental  tax  would  be                                                                    
applied regardless of the roads taken.                                                                                          
                                                                                                                                
Senator   Hoffman    requested   that   DOR    clarify   the                                                                    
interpretation of the law and get back to him.                                                                                  
                                                                                                                                
1:46:08 PM                                                                                                                    
                                                                                                                                
Co-Chair  Meyer thought  that  if the  vehicle  was used  on                                                                    
private roads  on the North  Slope, the Department  of Motor                                                                    
Vehicles did not require vehicle registration.                                                                                  
                                                                                                                                
Vice-Chair Fairclough  referenced a prior fiscal  note which                                                                    
had proposed a  higher cost due to  retroactivity. She noted                                                                    
that the current fiscal note before that was zero.                                                                              
                                                                                                                                
Mr.  Fonder  replied  that  the  original  fiscal  note  had                                                                    
addressed   legislation   that   had  a   retroactivity   of                                                                    
approximately 10  years; the burden  would have been  on the                                                                    
department  to  ensure  that  any  taxes  paid  during  that                                                                    
period, that should  not have been paid,  would be refunded.                                                                    
The current  draft of  the bill  had an  immediate effective                                                                    
date, which had resulted in the new fiscal note.                                                                                
                                                                                                                                
1:48:19 PM                                                                                                                    
                                                                                                                                
Vice-Chair Fairclough understood  that individual tax payers                                                                    
had paid vehicle rental tax in the past.                                                                                        
                                                                                                                                
Mr. Fonder responded  in the affirmative. He  and added that                                                                    
the tax was paid through  the rental companies and submitted                                                                    
to the department on a quarterly basis.                                                                                         
                                                                                                                                
Vice-Chair   Fairclough   asked   if  the   proposition   of                                                                    
retroactivity would mean  that the state would  be forced to                                                                    
seek  individual   tax  payers,   rather  than   the  rental                                                                    
entities.                                                                                                                       
                                                                                                                                
Mr.Fonder said yes.                                                                                                             
                                                                                                                                
Vice-Chair Fairclough  asserted that the tax  should be fair                                                                    
and  equitable and  that the  funds from  the tax  should be                                                                    
used to maintain state roads.                                                                                                   
                                                                                                                                
Mr. Fonder agreed.                                                                                                              
                                                                                                                                
Mr. Fonder returned to  Senator Hoffman's question regarding                                                                    
the  public  right-of-way.  He stated  that  current  statue                                                                    
defined a  passenger vehicle  in AS  28.90.990 as  a vehicle                                                                    
that  was driven,  or moved  on a  highway, or  other public                                                                    
right-of-way in the state.                                                                                                      
                                                                                                                                
Co-Chair Meyer OPENED public testimony.                                                                                         
                                                                                                                                
1:52:03 PM                                                                                                                    
                                                                                                                                
JON  COOK,   CHIEF  FINANCIAL  OFFICER,   AIRPORT  EQUIPMENT                                                                    
RENTALS  INC.,  FAIRBANKS  (via  teleconference),  spoke  in                                                                    
support of  SB 178. He  pointed out that the  bill addressed                                                                    
several unintended consequences of  the original vehicle tax                                                                    
legislation. He  believed that  issues regarding  the rental                                                                    
tax on the North Slope should  not be addressed in the bill.                                                                    
He noted that  rentals under 28 days out  of Deadhorse would                                                                    
be subject  to the  tax. He asserted  that his  business was                                                                    
located on  a private road  system should not be  subject to                                                                    
the tax.  He believed that  the DOR  had no right  to impose                                                                    
the tax on the North Slope.                                                                                                     
                                                                                                                                
1:59:05 PM                                                                                                                    
                                                                                                                                
RUDY  VONIMHOF,  PRESIDENT,  DELTA LEASING,  LLC,  spoke  in                                                                    
support  of SB  178. He  relayed that  his company  had been                                                                    
corresponding with DOR on the  issue since 2010. In 2013 the                                                                    
department had asked the company  to file returns on the tax                                                                    
and the company had responded that  they did not need to pay                                                                    
the  tax. He  noted  that he  had written  a  letter to  the                                                                    
department  detailing  the   2010  correspondence  (copy  on                                                                    
file). He said that on November  2, 2013 his Prudhoe Bay and                                                                    
Anchorage  offices  were  the  subject  of  a  raid  by  the                                                                    
Department of  Revenue the  results of  which were  that DOR                                                                    
confiscated 70 boxes  of files and computers.  The files had                                                                    
not been  returned. He opined  that BP had written  a letter                                                                    
to DOR explaining that the  DMV did not consider the greater                                                                    
Prudhoe Bay area taxable for  vehicle registration; a map of                                                                    
operations was included with the  letter that detailed where                                                                    
state maintenance began and ended  on the Dalton Highway. He                                                                    
shared  that  the  checkpoints between  public  and  private                                                                    
roads were monitored by strong  security and required badges                                                                    
for access.  He expressed  concern with the  current version                                                                    
of the  bill and  opined that  DOR maintained  possession of                                                                    
the files confiscated in 2013.                                                                                                  
                                                                                                                                
2:06:24 PM                                                                                                                    
                                                                                                                                
Mr. VonImhof  related that his  company had never  felt that                                                                    
the  tax  was applicable  to  its  customers and  had  never                                                                    
collected the tax.                                                                                                              
                                                                                                                                
2:08:53 PM                                                                                                                    
                                                                                                                                
Co-Chair   Meyer  assumed   that  Mr.   VonImhof's  business                                                                    
operated out of Deadhorse.                                                                                                      
                                                                                                                                
Mr. VonImof replied in the affirmative.                                                                                         
                                                                                                                                
2:09:06 PM                                                                                                                    
                                                                                                                                
Senator  Olson  wondered  if  the  security  guards  at  the                                                                    
checkpoints were armed.                                                                                                         
                                                                                                                                
Mr. VonImof replied that he was unsure.                                                                                         
                                                                                                                                
2:09:54 PM                                                                                                                    
                                                                                                                                
Senator Hoffman spoke to an  intent letter and asked whether                                                                    
the contents of the letter were  meant to be included in the                                                                    
legislation.                                                                                                                    
                                                                                                                                
Mr. VonImof believed  that an intent letter  had been slated                                                                    
to  be drafted  into the  legislation, but  that it  had not                                                                    
been written into the current version.                                                                                          
                                                                                                                                
2:10:24 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Fairclough   inquired  whether   the  electronic                                                                    
information seized in the raid had been returned.                                                                               
                                                                                                                                
Mr. VonImhof stated that the  company maintained the server,                                                                    
which  was imaged.  He said  that front  desk computers  and                                                                    
technician  computers in  the maintenance  facility had  not                                                                    
been  seized.  He relayed  that  the  hard drives  of  three                                                                    
computers had been returned in January 2014.                                                                                    
                                                                                                                                
Vice-Chair  Fairclough  probed  whether when  the  computers                                                                    
were seized, the company had  been able to perform a back-up                                                                    
and  if  the  business  had been  totally  disabled  by  the                                                                    
seizure.                                                                                                                        
                                                                                                                                
Mr.  VonImhof  replied  that  the  IT  conversion  had  been                                                                    
unexpected. He said that most  of the information resided on                                                                    
a  server and  that his  business  was allowed  to keep  its                                                                    
server. Employees  personal downloads on work  computers had                                                                    
not been returned.                                                                                                              
                                                                                                                                
2:12:31 PM                                                                                                                    
                                                                                                                                
Mr. VonImof reiterated that he supported the current bill.                                                                      
                                                                                                                                
Co-Chair Meyer  believed that the  current bill  would still                                                                    
charge a tax on private roads on the North Slope.                                                                               
                                                                                                                                
Mr.  VonImhof  responded  that   he  was  surprised  at  the                                                                    
Department  of   Revenue's  position  on  Prudhoe   Bay.  He                                                                    
expressed concern for that aspect of the legislation.                                                                           
                                                                                                                                
2:13:25 PM                                                                                                                    
                                                                                                                                
Co-Chair  Meyer asked  whether the  company leased  vehicles                                                                    
for longer than a 30 day period.                                                                                                
                                                                                                                                
Mr. VonImhof responded  that it varied. He  offered that the                                                                    
vast majority of business  operations were long-term leases,                                                                    
meaning  more  than 6  months.  He  opined that  there  were                                                                    
outstanding issues between industry and DOR on the topic.                                                                       
                                                                                                                                
2:15:36 PM                                                                                                                    
                                                                                                                                
RANDY    JOHNSON,     TYLER    RENTAL,     KETCHIKAN    (via                                                                    
teleconference), spoke  in support  of SB 178.  He expressed                                                                    
reservations  regarding truck  rentals  on non-public  roads                                                                    
and support for a retroactivity  clause. He related that his                                                                    
company  had never  received  notice on  the  tax since  its                                                                    
inception in  2004 and as  a result had never  collected the                                                                    
tax  from its  customers.  He understood  that  most of  the                                                                    
vehicle rental companies had received  notice of the tax and                                                                    
that  he  could only  assume  that  the  reason it  was  not                                                                    
notified was  because it  was not  originally the  intent to                                                                    
tax businesses like Tyler Rental.                                                                                               
                                                                                                                                
2:19:11 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer CLOSED public testimony.                                                                                         
                                                                                                                                
Senator Hoffman questioned whether  the sponsor had intended                                                                    
that the legislation would not apply to certain vehicles.                                                                       
                                                                                                                                
2:19:53 PM                                                                                                                    
                                                                                                                                
Senator  Bishop  stated that  the  sponsor's  intent was  to                                                                    
clarify that Prudhoe Bay would be exempt from the tax.                                                                          
                                                                                                                                
2:20:21 PM                                                                                                                    
                                                                                                                                
Senator Hoffman  offered that  if the  DOR thought  that the                                                                    
intent  was that  the  Prudhoe Bay  should  be taxed,  there                                                                    
needed to be clarification.                                                                                                     
                                                                                                                                
Senator Olson  asked whether only  vehicles rented  on state                                                                    
maintained roads should be taxed.                                                                                               
                                                                                                                                
Senator Bishop noted  that the original intent  had been for                                                                    
passenger  vehicles during  the  summer  tourist season  and                                                                    
that it had  never been to target rentals in  Prudhoe Bay or                                                                    
remote mine sites.                                                                                                              
                                                                                                                                
2:21:24 PM                                                                                                                    
                                                                                                                                
Senator  Olson inquired  if the  bill's original  intent had                                                                    
been  to tax  people on  private mining  roads in  Southeast                                                                    
Alaska.                                                                                                                         
                                                                                                                                
Senator Bishop responded that it  had not been the intent to                                                                    
do so.                                                                                                                          
                                                                                                                                
Senator Olson  stressed the  need for  further clarification                                                                    
in order to stave future raids on small businesses.                                                                             
                                                                                                                                
2:22:15 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Fairclough asserted  that ignorance  of the  law                                                                    
was not defensible in court  and that it would be impossible                                                                    
for the state to notify every single business of every law.                                                                     
                                                                                                                                
Co-Chair Meyer  thought that his  staff needed to  work with                                                                    
Senator  Bishop's staff  in order  to craft  a comprehensive                                                                    
piece of  legislation. He  believed that  the 28  day rental                                                                    
period was workable.                                                                                                            
                                                                                                                                
Vice-Chair   Fairclough   urged   communication   with   the                                                                    
Department of Law  in order to draft language  that spoke to                                                                    
the  North Slope  but also  addressed  mining operations  in                                                                    
Southeast Alaska.                                                                                                               
                                                                                                                                
Co-Chair Meyer said  that DMV already knew  which roads were                                                                    
private or public.                                                                                                              
                                                                                                                                
Vice-Chair Fairclough  believed that the work  would need to                                                                    
be done by both DOT and DMV.                                                                                                    
                                                                                                                                
2:25:55 PM                                                                                                                    
                                                                                                                                
SB  178  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
2:26:00 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:28:03 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
CS FOR HOUSE BILL NO. 305(FIN)                                                                                                
                                                                                                                                
     "An  Act relating  to the  records of  metal scrappers;                                                                    
     repealing the  requirement that a junk  dealer or metal                                                                    
     scrapper  obtain  a  license;   and  providing  for  an                                                                    
     effective date."                                                                                                           
                                                                                                                                
TOM WRIGHT, STAFF, REPRESENTATIVE MIKE CHENAULT, read from                                                                      
a sponsor statement:                                                                                                            
                                                                                                                                
     HB 305  as originally  introduced proposed to  repeal a                                                                    
     pre-statehood  requirement for  junk dealers  and metal                                                                    
     scrappers  to obtain  a state  license. Research  could                                                                    
     not identify  any licenses which were  issued under the                                                                    
     statute and  therefore, it was felt  the statute served                                                                    
     no public purpose and should  be repealed. Although the                                                                    
     original intent of the legislation  was to eliminate an                                                                    
     unneeded law  from the  books, the  process led  to the                                                                    
     identification of  an area where  Alaska state  law was                                                                    
     deficient and needed improvement.                                                                                          
                                                                                                                                
     The   junk  dealer   statute   was  discovered   during                                                                    
     discussions   by  a   working  group   of  contractors,                                                                    
     utilities and  scrap metal dealers looking  for ways to                                                                    
     deter metal  theft in Alaska.  Due to the  higher value                                                                    
     of  metals  such  as  copper,   metal  theft  has  been                                                                    
     increasing nationwide.  However, Alaska remains  as the                                                                    
     only state  without a law specifically  targeting metal                                                                    
     theft.                                                                                                                     
                                                                                                                                
     Thieves  often  target utilities,  construction  sites,                                                                    
     and  other   locations  with  significant   volumes  of                                                                    
     copper. In  some cases,  the value  of the  scrap metal                                                                    
     stolen  pales  in  comparison to  the  damage  done  by                                                                    
     thieves.  For  utilities,  theft  can  result  in  life                                                                    
     threatening  situations,   service  outages   for  many                                                                    
     customers,   and  be   very  costly   to  repair.   For                                                                    
     construction  sites,  significant   costs  and  project                                                                    
     delays can result from theft.                                                                                              
                                                                                                                                
     The main  goal of  metal theft laws  is to  provide law                                                                    
     enforcement with  additional tools to track  down metal                                                                    
     thieves as well as provide  a deterrent to the crime by                                                                    
     closing down  avenues to sell stolen  property. In many                                                                    
     cases,  other states  have  adopted very  comprehensive                                                                    
     laws,  which  are  costly  to   implement  as  well  as                                                                    
     burdensome to  businesses. This bill takes  a different                                                                    
     approach.  Through  the  input   of  a  those  impacted                                                                    
     (utilities,  contractors,  law enforcement,  and  scrap                                                                    
     metal dealers), the  legislation implements those tools                                                                    
     the working  group felt  would be  most effective  in a                                                                    
     manner which add as little burden as possible.                                                                             
                                                                                                                                
     Specifically,  the  bill  adds  new  recording  keeping                                                                    
     requirements  on   the  sale  of  scrap   metal.  Basic                                                                    
     information  includes date,  time, location,  and value                                                                    
     of the  metal as well  as information about  the seller                                                                    
     including the  name, address, driver's  license number,                                                                    
     and   vehicle  plate   number.  The   legislation  also                                                                    
     requires the seller to sign  a statement that the metal                                                                    
     is not stolen.                                                                                                             
                                                                                                                                
2:31:43 PM                                                                                                                    
                                                                                                                                
Co-Chair  Meyer clarified  that  the  committee was  working                                                                    
with version R of the bill.                                                                                                     
                                                                                                                                
Mr. Wright replied in the affirmative.                                                                                          
                                                                                                                                
Senator Dunleavy understood that  the bill would not prevent                                                                    
someone from selling wire or metal to someone else.                                                                             
                                                                                                                                
Mr. Wright replied that it would not.                                                                                           
                                                                                                                                
Senator Dunleavy  thought that there  could be a  way around                                                                    
the law.                                                                                                                        
                                                                                                                                
Mr.  Wright agreed.  He  surmised that  there  were ways  to                                                                    
circumvent nearly any law.                                                                                                      
                                                                                                                                
2:33:01 PM                                                                                                                    
                                                                                                                                
Co-Chair  Meyer asked  how many  junk  dealers or  scrappers                                                                    
there were in the state.                                                                                                        
                                                                                                                                
Mr.  Wright deferred  the question  to available  experts in                                                                    
the field.                                                                                                                      
                                                                                                                                
Co-Chair Meyer  wondered if a scrappers/junk  dealer license                                                                    
was the same as business license.                                                                                               
                                                                                                                                
Mr. Wright replied in the affirmative.                                                                                          
                                                                                                                                
2:33:33 PM                                                                                                                    
                                                                                                                                
LOUISE  BRAY,   SHNITZER  STEEL,  TACOMA,   WASHINGTON  (via                                                                    
teleconference), spoke in  support of HB 305.  She felt that                                                                    
the bill  was a first small  step to combat metal  theft and                                                                    
to  provide additional  tools for  law enforcement  to track                                                                    
thieves.  She  believed  that there  would  always  be  non-                                                                    
compliant dealers,  but once the  law was  implemented those                                                                    
dealers would be easier to locate.                                                                                              
                                                                                                                                
2:36:47 PM                                                                                                                    
                                                                                                                                
PHIL STEYER, CHUGACH  ELECTRICAL ASSOCIATION, ANCHORAGE (via                                                                    
teleconference), testified  in support of HB  305. He stated                                                                    
that the Chugiak Electrical Association  had been the victim                                                                    
of  theft and  property damage.  He  said that  the cost  of                                                                    
repairs  for  the damage  and  lost  business was  expensive                                                                    
inconvenient.                                                                                                                   
                                                                                                                                
2:39:19 PM                                                                                                                    
                                                                                                                                
JOHN  MACKINNON, EXECUTIVE  DIRECTOR, ALASKA  ASSOCIATION OF                                                                    
GENERAL   CONTRACTORS,   ANCHORAGE   (via   teleconference),                                                                    
testified in  support of HB  305. He stated that  the Alaska                                                                    
Association   of  General   Contractors'   hoped  that   the                                                                    
legislation  would make  to more  difficult  for thieves  to                                                                    
sell  scrap   metal  without  adding  more   regulations  or                                                                    
requirements for dealers.                                                                                                       
                                                                                                                                
2:41:17 PM                                                                                                                    
                                                                                                                                
AL  BARRETTE, SELF,  FAIRBANKS  (via teleconference),  spoke                                                                    
against the reporting requirements  in HB 305. He questioned                                                                    
the constitutionality of the portion  of the bill that would                                                                    
require  that records  be kept  available for  inspection by                                                                    
law  enforcement during  normal  business  hours. He  opined                                                                    
that  he should  have  to collect  data  or file  burdensome                                                                    
paperwork for the sake of public safety.                                                                                        
                                                                                                                                
2:44:27 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer CLOSED public testimony.                                                                                         
                                                                                                                                
Senator  Bishop inquired  whether  the  metal scrappers  and                                                                    
dealers had been involved in crafting the bill.                                                                                 
                                                                                                                                
Mr. Wright replied yes.                                                                                                         
                                                                                                                                
Vice-Chair  Fairclough queried  to  what  extent the  record                                                                    
keeping  proposed  in  the legislation  would  inconvenience                                                                    
business owners.                                                                                                                
                                                                                                                                
2:46:46 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MIKE  CHENAULT, replied  that it was  not the                                                                    
sponsor's  intent make  the  reporting  any more  burdensome                                                                    
than  what   was  considered  good  business   practice.  He                                                                    
asserted  that  it would  be  best  for businesses  to  keep                                                                    
accurate records. He  noted that if enforcement  came into a                                                                    
pawn shop and found that  things were stolen, the items were                                                                    
confiscated and given back to  the rightful owner, resulting                                                                    
in a loss for the  store owner; proper record keeping offers                                                                    
the proprietor the ability to  recoup the costs from whoever                                                                    
pawned  the item.  He understood  that there  would be  more                                                                    
paperwork  and acknowledged  the concerns;  however, it  was                                                                    
better business  practice to keep the  information regarding                                                                    
customers. He  stressed that the legislation  was an attempt                                                                    
to  address  theft  concerns  in   the  most  innocuous  way                                                                    
possible.                                                                                                                       
                                                                                                                                
2:48:49 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Fairclough   questioned  the   reasoning  behind                                                                    
repealing  the licensing  requirement  of  junk dealers  and                                                                    
metal scrappers.                                                                                                                
                                                                                                                                
Mr. Wright replied that it was  handed over as an arcane law                                                                    
that pre-dated statehood. He  cited the Legislative Research                                                                    
Services Research Brief (copy on file):                                                                                         
                                                                                                                                
     Because  the  licensing  of   junk  dealers  and  metal                                                                    
     scrappers involved the payment  of fees, the Department                                                                    
     of Revenue  inherited the provision through  passage of                                                                    
     duties from  territorial offices  to the  newly created                                                                    
     state offices.                                                                                                             
                                                                                                                                
Mr. Wright  furthered that the  law was not enforced  by DOR                                                                    
and that  the issue was now  the per view of  the Department                                                                    
of  Commerce,  Community  and Economic  Development  (DCCED)                                                                    
under their business license division.                                                                                          
                                                                                                                                
Vice-Chair  Fairclough   stated  if  the  number   of  metal                                                                    
scrappers/dealers  was unknown,  and  there were  increasing                                                                    
instances  of  metal  scrappers buying  stolen  merchandise,                                                                    
then it  would be  in the state's  best interest  to require                                                                    
then to hold a license under DOR.                                                                                               
                                                                                                                                
Representative Chenault replied that  the state did know how                                                                    
many  there  were and  that  they  were all  licensed  under                                                                    
DCCED. He said  that the original intent  of the legislation                                                                    
was  to terminate  the  section pertaining  to  DOR and  not                                                                    
DCCED.                                                                                                                          
                                                                                                                                
2:51:43 PM                                                                                                                    
                                                                                                                                
CSHB 305(FIN)  was HEARD and  HELD in committee  for further                                                                    
consideration.                                                                                                                  
                                                                                                                                
2:51:54 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:52:20 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
CS FOR HOUSE BILL NO. 297(FIN)                                                                                                
                                                                                                                                
     "An   Act  recognizing   the  Alaska   Housing  Finance                                                                    
     Corporation as  the authorizing agency to  approve home                                                                    
     energy rating systems for the  state; and providing for                                                                    
     an effective date."                                                                                                        
                                                                                                                                
2:52:41 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LANCE  PRUITT, introduced  HB 297.  He stated                                                                    
that the  Alaska Finance Housing Corporation  (AHFC) was the                                                                    
state's  home energy  rating system  authorizing agency  for                                                                    
the purpose of  approving home energy rating  systems in the                                                                    
state.  He  relayed that  the  bill  sought to  protect  the                                                                    
state's  investment via  AHFC in  developing its  own rating                                                                    
system, AkWarm.  He shared that  the AkWarm system  had been                                                                    
in use  since 1996,  and was  designed specifically  for the                                                                    
unique  climate and  environment of  Alaska. The  bill would                                                                    
highlight that AHFC was the  authorizing agency in charge of                                                                    
approving Home Energy Rating Systems (HERS).                                                                                    
                                                                                                                                
2:54:19 PM                                                                                                                    
                                                                                                                                
Senator  Dunleavy inquired  whether  and authorizing  agency                                                                    
was currently recognized.                                                                                                       
                                                                                                                                
Representative Pruitt said no.                                                                                                  
                                                                                                                                
Co-Chair  Meyer  noted the  zero  fiscal  note. He  inquired                                                                    
whether there  were federal funds  available to  assist this                                                                    
program.                                                                                                                        
                                                                                                                                
DIRK  CRAFT, STAFF,  REPRESENTATIVE LANCE  PRUITT, responded                                                                    
that the  intent of  the bill was  to protect  any potential                                                                    
federal funds.                                                                                                                  
                                                                                                                                
2:56:25 PM                                                                                                                    
                                                                                                                                
ROBERT  BREAN,  DIRECTOR,  RESEARCH AND  RURAL  DEVELOPMENT,                                                                    
ALASKA HOUSING  FINANCE CORPORATION  (AHFC), added  that the                                                                    
corporation did  not receive additional  federal funds  as a                                                                    
result  of  exercising  the program,  but  by  formula  AHFC                                                                    
received approximately 300 thousand  dollars from the United                                                                    
States  Department of  Energy.  The corporation  anticipated                                                                    
that to use  any federal funds on an analysis  of any rating                                                                    
systems introduced that might benefit the state.                                                                                
                                                                                                                                
2:57:09 PM                                                                                                                    
                                                                                                                                
Senator Bishop  wondered whether  AHFC would  interface with                                                                    
the  Cold  Climate  Research  Housing  in  Fairbanks  as  it                                                                    
developed the regulations.                                                                                                      
                                                                                                                                
Mr. Brean  replied that it  was possible. He said  that AHFC                                                                    
had extended a great deal  of time and energy developing the                                                                    
current software rating system.  He relayed that the current                                                                    
system had weather  regimes and weather systems  built in as                                                                    
well as  construction techniques in the  state. He concluded                                                                    
that  AHFC  planned on  working  closely  with Cold  Climate                                                                    
Housing on the project.                                                                                                         
                                                                                                                                
Co-Chair Meyer CLOSED public testimony.                                                                                         
                                                                                                                                
2:59:07 PM                                                                                                                    
                                                                                                                                
HB  297(FIN) was  HEARD and  HELD in  committee for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
ADJOURNMENT                                                                                                                   
3:00:05 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 3:00 p.m.                                                                                          

Document Name Date/Time Subjects
CSSB 178 BP Backup.pdf SFIN 4/1/2014 1:30:00 PM
SB 178