Legislature(1993 - 1994)
04/18/1993 01:20 PM Senate FIN
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= 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The committee rescinded previous action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.
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