HB 192-FISHERIES BUSINESS LICENSE; BOND 8:35:50 AM CO-CHAIR LEDOUX announced that the first order of business would be HOUSE BILL NO. 192, "An Act relating to requirements to obtain and maintain a fisheries business license; relating to security required of fish processors and primary fish buyers; and providing for an effective date." 8:35:59 AM REPRESENTATIVE WILSON moved to adopt the committee substitute for HB 192, Version 24-GH1013\F, Utermohle, 3/17/05, as the working document. [There being no objection, Version F was before the committee.] 8:36:28 AM CHUCK HARLAMERT, Juneau Section Chief, Tax Division, Alaska Department of Revenue (DOR), presented the committee substitute for HB 192 on behalf of the governor. He reviewed the changes that the CS would make to the original bill. The first change is in Section 1, page 2, lines 7 and 22, which he said is "an additional requirement for licensure; ... it basically places local fisheries taxes among the list of obligations that must be paid by a processor in order to licensed." The second change is that a new Section 2 has been inserted which he said: gives processors a break during the period between January 1 and March 31. ... Under current law they are required to post security covering their unpaid estimated tax for the prior year, which is not paid yet, and the new license year. During that three- month window they essentially are stuck with posting security for two years of tax. This [bill] allows the [DOR] to accept ... the same security for both years during that short period if it's acceptable to [DOR], and that should provide a significant cash flow benefit to processors during that tight period. 8:38:04 AM MR. HARLAMERT, in response to Co-Chair LeDoux, said that the processors are not required to pay the prior year's tax until March 31, therefore, under current law the processor would have to either pay that tax before the due date or "pony up" an additional year's worth of security. He noted that for this change to apply, the processor must be current in its taxes and be licensed during January through March. MR. HARLAMERT pointed out that the third change to the original bill is in Section 3, which was previously Section 2; on page 4, line 7, tenders are added as bond beneficiaries. He noted that under current law, employees, fishermen, and the Alaska Department of Labor and Workforce Development can file a claim against the bond. He said, "This adds tender operators to that list. They are required to get a judgment; having done so, they can collect against the bond." 8:40:01 AM MR. HARLAMERT turned to the next change in the bill, which is on page 6, line 14. The word "may" was changed to "shall" so that the bill would conform to existing law and the commissioner would be required to waive the filing of a performance bond under certain conditions. 8:41:09 AM REPRESENTATIVE WILSON asked if the bill would prevent processors from not paying fishermen. MR. HARLAMERT replied that the bill wouldn't automatically prevent that from happening. He noted: Under existing law, you actually have to have a claim paid from the bond in order to affect the bonding requirement of the [processor], and ... in all cases, old and under this proposed law, fishermen have to pursue a claim. Under current law, if they pursued a claim, it could impact the processor's bonding requirement, and under this law it will impact it. REPRESENTATIVE WILSON asked if there is a simple procedure that all fishermen know to follow if they have not been paid by a processor. MR. HARLAMERT replied that he assumed that fishermen know, but they may not. Where they have to go, under current law and this bill, he said, is to the court to obtain a judgment. 8:43:08 AM CO-CHAIR LEDOUX remarked, "I thought somebody was going to look into the constitutionality of simply allowing a short, administrative hearing for tendermen and fishermen and employees to be able to go against the bond without going through a full court hearing." MR. HARLAMERT replied that he was not aware of that expectation. CO-CHAIR THOMAS noted that he had filed against a bond once and he didn't hire an attorney but instead went to a magistrate. CO-CHAIR LEDOUX commented that it depends on the amount a person is seeking; a small claims court action would be dealt with through a magistrate. 8:45:04 AM CO-CHAIR LEDOUX asked for confirmation that the bond is $10,000. MR. HARLAMERT replied that the basic bond level is $10,000, which is unchanged from prior law. He noted that this is the highest bond in the country for fish processors. He continued, "It makes the bonding requirements, stepping up to either the $50,000 or the $100,000 level, more responsive to [processor] behavior, so it's easier to have the bond increased under this bill than it is under current law." 8:46:11 AM CO-CHAIR LEDOUX closed public testimony. 8:47:02 AM CO-CHAIR THOMAS moved to adopt [Amendment 1], which read [original punctuation provided]: p.6, line 21: delete "employee or fishermen" add "employee, fishermen, or contracted raw fish transporter" p.8, line 7: delete "employee or fishermen" add "employee, fishermen, or contracted raw fish transporter" p.8, line 11: delete "employee or fishermen" add "employee, fishermen, or contracted raw fish transporter" IAN FISK, Staff to Representative Thomas, Alaska State Legislature introduced [Amendment 1] on behalf of Representative Thomas. He explained that the amendment would allow "contracted raw fish transporters" to obtain final judgment against a processor's bond. 8:48:06 AM There being no objection, Amendment 1 was adopted. 8:48:16 AM CO-CHAIR THOMAS moved to report CSHB 192, Version 24-GH1013\F, Utermohle, 3/17/05, as amended from committee with individual recommendations and the accompanying fiscal notes. There being no objection, CSHB 192(FSH) was reported from the House Special Committee on Fisheries.