Legislature(1997 - 1998)

04/17/1997 01:34 PM Senate L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
               SENATE LABOR AND COMMERCE COMMITTEE                             
                         April 17, 1997                                        
                           1:34 P.M.                                           
 MEMBERS PRESENT                                                               
 Senator Loren Leman, Chairman                                                 
 Senator Mike Miller                                                           
 Senator Tim Kelly                                                             
 Senator Lyman Hoffman                                                         
  MEMBERS ABSENT                                                               
 Senator Jerry Mackie                                                          
  COMMITTEE CALENDAR                                                           
 SENATE BILL NO. 159                                                           
 "An Act relating to the new business incentive program."                      
  -HEARD AND HELD                                                              
 SENATE BILL NO. 169                                                           
 "An Act relating to an exemption from the requirement for payment             
 for overtime under a voluntary work hour plan for work performed by           
 employees at certain mines; and providing for an effective date."             
  -MOVED SB 169 OUT OF COMMITTEE                                               
 CS FOR HOUSE BILL NO. 117(L&C)                                                
 "An Act relating to boiler and pressure vessel inspection                     
 standards; relating to elevator safety and inspection standards;              
 and providing for an effective date."                                         
  -HEARD AND HELD                                                              
 HOUSE BILL NO. 118 am                                                         
 "An Act relating to reporting and other requirements of certain               
 employment accidents; and providing for an effective date."                   
  -HEARD AND HELD                                                              
 SENATE JOINT RESOLUTION NO. 27                                                
 Endorsing the Working Families Flexibility Act and the Family                 
 Friendly Workplace Act.                                                       
  -SCHEDULED, BUT NOT HEARD                                                    
  PREVIOUS SENATE COMMITTEE ACTION                                             
 SB 159 - No previous action to consider.                                      
 SB 169 - See Labor and Commerce minutes dated 4/15/97.                        
 HB 117 - No previous action to consider.                                      
 HB 118 - No previous action to consider.                                      
 SJR 27 - No previous action to consider.                                      
  WITNESS REGISTER                                                             
 Mr. Jordan Koko, Intern                                                       
 Senator Drue Pearce                                                           
 State Capitol Bldg.                                                           
 Juneau AK 99801-1182                                                          
  POSITION STATEMENT:   Staff to sponsor of SB 159.                            
 Ms. Patty DeMarco, President                                                  
 Anchorage Economic Development Corporation (AEDC)                             
 550 W 7th Ave. #1400                                                          
 Anchorage AK 99501                                                            
  POSITION STATEMENT:   Supported SB 159.                                      
 Mr. Mike Brady, Chairman                                                      
 Anchorage Economic Development Corporation (AEDC)                             
 550 W 7th Ave. #1400                                                          
 Anchorage AK 99501                                                            
  POSITION STATEMENT:   Supported SB 159.                                      
 Mr. Scott Thompson, CEO                                                       
 Alaska Power Systems                                                          
 8300 King St.                                                                 
 Anchorage AK 99518                                                            
  POSITION STATEMENT:   Supported SB 159.                                      
 Ms. Donna Tollman                                                             
 P.O. Box 9                                                                    
 Glennallen AK 99588                                                           
  POSITION STATEMENT:   Supported SB 159.                                      
 Ms. Katelyn Obner-Markley                                                     
 Alaska Industrial Development and Export Authority                            
 480 W. Tudor                                                                  
 Anchorage AK 99503                                                            
  POSITION STATEMENT:   Supported SB 159.                                      
 Mr. Greg Wolf                                                                 
 Anchorage Economic Development Corporation (AEDC)                             
 550 W. 7th Ave., #1400                                                        
 Anchorage AK 99518                                                            
  POSITION STATEMENT:   Supported SB 159.                                      
 Mr. Tom Lawson                                                                
 Division of Trade and Development                                             
 Department of Commerce and Economic Development                               
 P.O. Box 110804                                                               
 Juneau AK 99811-0804                                                          
  POSITION STATEMENT:   Supported SB 159.                                      
 Mr. Dwight Perkins, Special Assistant                                         
 Department of Labor                                                           
 P.O. Box 21149                                                                
 Juneau AK 99802-1149                                                          
  POSITION STATEMENT:   Supported HB 117 and HB 118.                           
  ACTION NARRATIVE                                                             
  TAPE 97-20, SIDE A                                                           
 Number 001                                                                    
             SB 159 NEW BUSINESS INCENTIVE PROGRAM                             
  CHAIRMAN LEMAN  called the Senate Labor and Commerce Committee               
 meeting to order at 1:39 p.m. and announced  SB 159  to be up for             
  MR. JORDAN KOKO,  Intern to Senator Pearce, sponsor, said she                
 introduced this as a program that would encourage economic                    
 development in the State of Alaska, especially in industries that             
 are unrepresented.  This program would be used under the Alaska               
 Industrial Development and Export Authority and will be used to               
 allocate funds every year to help develop certain programs in the             
 State.  There is a need to generate cargo and cargo capabilities,             
 including capitalizing on Alaska's locational advantages in                   
 transferring cargo and encouraging that sort of development.  This            
 would hopefully diversify Alaska's corporate tax base and encourage           
 more manufacturing in the State through other sorts of development            
 than oil.  This would also encourage high value jobs that encourage           
 full time employment in the State.                                            
  MS. PATTY DEMARCO,  President, Anchorage Economic Development                
 Corporation, said she does accept the amendment offered by CHAIRMAN           
 LEMAN.  The dollar amount up to or not to exceed $3 million would             
 be no deterrent to the bill.  This legislation is a way to                    
 establish net new jobs in Alaska for manufacturing and other value            
 added kinds of activities.  It doesn't require any expansion of               
 existing government staff and will be a divided responsibility                
 among the private sector proponent and the municipality that will             
 be host to the business, and hopefully the State of Alaska as well.           
 She said this is a bill that is a catalyst for action and it's a              
 way to give us a broader base for future growth of our economy.               
 There are a number of safeguards drafted into this legislation.               
 MS. DEMARCO said that there are 32 programs in other states that              
 compete with us for the same businesses.  Statements from Federal             
 Express and Alyeska Alloys give the committee an idea of the                  
 implications this program would have on the future growth of these            
  SENATOR HOFFMAN  asked how she thought this would help rural areas           
 of the State.  MS. DEMARCO replied that they are hopeful that by              
 having a way for broad areas of the State to attract a business in            
 the form of making land available and helping to support                      
 infrastructure development.                                                   
  MR. MIKE BRADY  said this program allows infrastructure to be                
 created which is not necessarily economically viable   without it.            
 He explained that Alaska, when viewed in the context of being the             
 cheapest place possible in which to establish a business, comes out           
 less favorable than a lot of other areas.  This program would allow           
 the State to make up that difference for a period of time in order            
 to allow a business decision to be made that would be favorable to            
 the business position.  Development in Anchorage is very expensive.           
 They have to move a lot of dirt and there is no value in moving it            
 until there is a facility there.                                              
  MR.   SCOTT THOMPSON , CEO, Alaska Power Systems, said they are              
 currently in the middle of a project that's rather unique.  Through           
 the Alaska Science and Technology Foundation they have developed a            
 power generation operating system that's being looked at throughout           
 the world for reduction in power cost in a deregulation                       
 environment.  They've got about 70 people employed in Anchorage now           
 and they are looking for a place to assemble this product.  It's              
 basically a microprocessor board which is a value added product               
 that has an operating system or firmware and software added to it             
 after the board is assembled.  This is what Federal Express and UPS           
 needs to anchor a transportation area.                                        
  MR. THOMPSON  said one of the problems they have found, and has been         
 pointed out to them by Emerson, is that they do not have an                   
 economic development partnership program with industry.  Most                 
 countries in the world today actually have a development                      
 infrastructure program which basically offsets the cost for                   
 industry to develop products within their country.  These                     
 countries, such as Ireland and Malaysia, actually host large                  
 companies to do assembly of product.  The development money that is           
 put forth puts the infrastructure in and the return to the country            
 or state is the jobs that are guaranteed over a certain period of             
 Emerson has indicated to them on their 40,000 unit order per year,            
 that they don't care where they build the system.  They just don't            
 want to pay any extra for it.  This forces them to look off-shore             
 to build the hardware.  Once the hardware has been established, for           
 instance in Mexico or Malaysia, it makes the most sense to move all           
 of the software and firmware jobs to where the hardware is being              
 developed.  It's easier to move management to where the hardware              
 core is.                                                                      
 The problem with developing this concept here is that there's                 
 absolutely no infrastructure to build the facilities to move the              
 dirt, to get the people from the lower 48, if they are qualified to           
 do board assembly.  He said there is a great logistics organization           
 here which has to do with the northern polar route for Federal                
 Express and UPS, but there's no infrastructure to provide this.               
 He said these are good paying jobs like $80,000 - $130,000.  Most             
 of the assembly process is all automated along with the handling              
 and shipping.                                                                 
 MR. THOMPSON said that in Kodiak, for instance, it would make sense           
 for Tyson to do value added breading of fish sticks.                          
 Number 190                                                                    
  MS. DONNA TOLLMAN,  Glennallen, supported SB 159 and said they just          
 had a meeting where a large representation from Cordova talked                
 about value added and the cost of site development in rural                   
 communities and the difficulty they are having in coming up with              
 higher value jobs.  In dealing with welfare to work issues, their             
 residents are finding it difficult to see the value in coming off             
 of welfare when the jobs they can get are for less money.                     
 She said they have been approached by a number of businesses and              
 the first question they are asked is what sort of business                    
 incentive program they have.  She said they welcome the opportunity           
 to compete with other states.                                                 
 Number 237                                                                    
  MS. KATELYN OBNER-MARKLEY,  Alaska Industrial Development and Export         
 Authority, supported SB 159.  They believe it is a very good                  
 concept and there are specific things that need to be put in in               
 terms of objective standards.                                                 
  CHAIRMAN LEMAN  asked her if she had suggestions for objective               
 standards.  She said she would provide that to the committee.                 
  MR. GREG WOLF , AEDC, said he spends a good part of his time talking         
 to companies about establishing new businesses in the Anchorage               
 area in the area of distribution, manufacturing, and final assembly           
 which aren't very well represented now.  He said that it is                   
 inevitable that the question of community incentives is raised.               
 It's the way the game is played; it's a competitive world.  This              
 program is a way of leveling the playing field and pointed out that           
 they are talking with large companies and small, alike.                       
  MR. TOM LAWSON,  Department of Commerce and Economic Development,            
 said they supported this bill; however, they are concerned about              
 where the money comes from.  He had one technical point in Section            
 45.81.010 (a)(3) to clarify if a local government doesn't have the            
 resources to provide any financial backing and supports the bill,             
 that they don't have to put up money.  He thought this bill worked            
 great for the urban areas, but in other areas, like Glennallen and            
 Copper River Valley, there aren't any local governments at all.               
 He thought it shouldn't be limited to just cash from local                    
 governments, but to include land and property tax abatement.                  
 CHAIRMAN LEMAN asked if he had seen the proposed amendments.  MR.             
 LAWSON replied he had and supported both of them.  CHAIRMAN LEMAN             
 said in the second amendment he was trying to create flexibility              
 within the department so they may put in the grant terms a                    
 repayment plan, if that were to be appropriate.                               
  MS. DEMARCO  added that she supported them also.                             
 CHAIRMAN LEMAN said he would set aside SB 159 and work on it until            
 another meeting.                                                              
              SB 169 VOLUNTARY FLEX TIME FOR MINES                            
   CHAIRMAN LEMAN  announced  SB 169  to be up for consideration.             
  SENATOR MILLER  moved to pass SB 169 out of committee with                   
 individual recommendations.  There were no objections and it was so           
 CHAIRMAN LEMAN announced a recess at 2:00 p.m.                                
          HB 117 ELEVATOR/BOILER/PRESSURE VESSEL STDS                         
 /CHAIRMAN LEMAN called the meeting back to order at 4:37 p.m. and             
 announced  HB 117  to be up for consideration.                                
  MR. DWIGHT PERKINS,  Special Assistant, Department of Labor, said HB
 117 would simplify the process of adopting new additions of the               
 boiler and elevator code.  New additions are issued every three               
 years requiring legislative action to update the enforcement codes            
 for the State.  There has never been any opposition to the new                
 codes.  By transferring the adoption authority to the department,             
 the process of updating codes will be streamlined and the matter              
 will not have to take up legislative time and attention.                      
  CHAIRMAN LEMAN  asked Mr. Perkins to check with the committee aide           
 regarding the recent court decision about the adoption of codes to            
 make sure they have correctly identified what has to be done by               
 public process.  MR. PERKINS agreed.                                          
 CHAIRMAN LEMAN said he would hold the bill until next Tuesday.                
            HB 118 REPORTING OF EMPLOYMENT ACCIDENTS                          
 CHAIRMAN LEMAN announced  HB 118  to be up for consideration.                 
  MR. PERKINS  said that HB 118 would shorten the time frame for an            
 employer's reporting of an accident that is fatal to an employee or           
 that requires inpatient hospitalization.  Changes would also be               
 made regarding the manner in which the report is to be made and the           
 information that is to be included.  To maintain our State                    
 Occupational Safety and Health (OSHA) Program, our standards must             
 be at least as effective as federal standards and these changes               
 will bring us into compliance with federal law and there is no                
 fiscal note.                                                                  
 CHAIRMAN LEMAN asked if there had been any opposition expressed.              
 MR. PERKINS replied no.                                                       
 CHAIRMAN LEMAN asked if federal law required reporting of a fatal             
 accident within eight hours.  MR. PERKINS replied yes.  CHAIRMAN              
 LEMAN asked if that had ever been a problem with businesses in                
 Alaska before.  MR. PERKINS replied no and agreed this did not                
 exclude use of a short wave radio.                                            
 CHAIRMAN LEMAN said he would hold HB 118 until next Tuesday.                  
 CHAIRMAN LEMAN adjourned the meeting at 4:40 p.m.                             

Document Name Date/Time Subjects