Legislature(1999 - 2000)
04/03/2000 02:00 PM House FIN
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 333
"An Act relating to the accounting for and
appropriations of the dive fishery management
assessment; and providing for an effective date."
HOUSE BILL NO. 334
"An Act relating to the establishment of and accounting
for an administrative cost charge for the state's role
in the community development quota program and to the
appropriation of receipts from the charge; and
providing for an effective date."
Co-Chair Therriault noted that HB 334 and HB 333 were
combined into one proposed committee substitute, work draft
1-GH2069\H Utermohle, 4/3/00.
BYRCE EDGMON, CDQ MANAGER, DEPARTMENT OF COMMUNITY AND
ECONOMIC DEVELOPMENT provided information on the
legislation. The legislation would switch the funding source
for the CDQ program from general funds to statutory
designated program receipts. The fee would allow the program
to be self-supporting.
(The tape resumed at this point.)
Mr. Edgmon observed that there is a $400 thousand dollar
ceiling (on the amount that can be reappropriated for
administrative costs) in the legislation. The cost of
oversight is currently approximately $250 thousand dollars.
He noted that the state does not anticipate that a level of
$400 thousand dollars would be reached but observed that
legislation would be required to remove the ceiling. The fee
would be administered by the Department of Community and
Economic Development. He observed that the House Labor and
Commerce Committee amended the legislation to allow new CDQ
groups to be exempted from the fee for the first two years
of their existence.
Representative Austerman questioned the intent behind the
exemption of new CDQ's from the fee. Mr. Edgmon reiterated
that the provision was added by the Senate Labor and
Commerce Committee and stated that the state is neutral on
the issue. He observed that existing CDQ groups have
expressed concern with the provision.
Representative Austerman asked for information on the
program. Mr. Edgmon explained that the CDQ staff is charged
with working with CDQ groups to assure that they meet the
mission of the program to create sustainable fisheries
related economies in Western Alaska. He noted that CDQ
groups have community development plans on file with the
state of Alaska. Staff works with groups to assure that they
comply with state and federal program standards. Staff also
allocates quota for the groups. Groups are growing and
making more investments on the Bering Sea. The CDQ staff
reviews: plans for due diligence on new investments,
performance measures and compliance with program standards.
In response to a question by Co-Chair Therriault, Mr. Bryce
stated that the department was not concerned over the
merging of HB 333 and HB 334.
Representative Phillips noted that there is a difference in
fiscal notes. Co-Chair Therriault observed that new notes
would be requested.
GERON BRUCE, LEGISLATIVE LIAISON, DEPARTMENT OF FISH AND
GAME stated that it would be appropriate to roll HB 333 and
HB 334 into one bill. He noted that both bills deal with the
classification of program receipts. He stressed that HB 333
only deals with classification of program receipts; HB 333
does not establish a fee structure. He explained the issue
arose from legislation passed in 1997. A group of commercial
fishermen that wanted to start a new fisheries worked with
Representative Williams on legislation, which allowed them
to form an association and conduct an election to place an
assessment on people harvesting the dive fishery resource in
the area represented by the association. The assessment of
the Southeast Regional Dive Fishers Association went into
effect and the revenue has been flowing into the treasury.
The department has requested appropriation of the funds in
FY01. At the current time they are classified as general
funds. The legislation would classify the funds as statutory
designated program receipts. He emphasized that it is a case
of an industry group that wants additional services from
government and is willing to pay for them. The department
and the industry group would jointly develop a plan.
In response to comments by Co-Chair Mulder regarding the
Department of Fish and Game's fiscal note, Mr. Bruce
explained that the revenue is going to be available in FY01.
It is not yet an on-going program. He explained that there
are expenditures funded through the class of revenue. The
funds are being reclassified. They are requested in the
2001-operating budget and are currently in the language
section.
Representative J. Davies clarified that the funds would be
statutory designated program receipts.
Co-Chair Therriault stressed that the conference committee
can resolve issues relating to the location of the funding.
He emphasized that he did not want to double fund the
request.
Co-Chair Mulder asked if the department would have the
authority to assess against CDQ participants for the
administrative cost without the bill. Mr. Edgmon stated that
they would not have the authority without the bill. Co-Chair
Mulder noted that section 4 provides the statutory
authority.
Representative Austerman asked how the fees are determined.
Mr. Edgmon explained that there is a two-tiered approach.
The current cost is $250 thousand dollars. The state of
Alaska developed a fee with the CDQ groups. Half of the $250
thousand dollars is paid with a flat fee that applies to all
six groups. The remaining 50 percent is portioned out to the
groups based on their allocation of the quota.
Representative Austerman questioned if the CDQ groups must
approve the flat fee before it can be raised. Mr. Edgmon
responded that the CDQ staff has an understanding that they
would work with the groups and honor any changes. The state
does not anticipate any changes to the current management
structure or the fee. The fee could be changed at anytime up
to the $400 thousand dollar limit.
Co-Chair Mulder asked what is expended to manage the
program. Mr. Edgmon stated that the cost is $251 thousand
dollars. The program costs have remained stable for 6 or 7
years. Representative Austerman expressed concern with the
provision, which would allow statutory designated program
receipts to grow from $250 thousand dollars to $400 thousand
dollars.
Co-Chair Mulder stressed that the state maintains the
oversight and can place a limit on the amount of money that
can be received. Representative Austerman questioned, if
there is going to be oversight, why there should be a $400
thousand dollar cap. Co-Chair Mulder agreed and suggested
that the limit was included to provide comfort to the
groups.
Representative J. Davies expressed concern that the state
would be forced to amend the statute if the limit was
retained. He referred to section (f), page 3, line 23 and
questioned why a two year exemption was chosen.
Mr. Edgmon noted that the language was added in the Senate
Labor and Commerce Committee. He did not know the intent. He
noted that Senator Stevens does not support expansion of new
CDQ groups. The amendment would allow any new CDQ group, in
theory, to be exempted from the fee for two years. The
current fee is approximately $250 thousand dollars divided
by six.
Representative G. Davis questioned if there was discussion
regarding expansion. Mr. Edgmon stated that expansion is an
on-going issue. He added that the $400 thousand dollar
ceiling was agreed on by the CDQ groups, in the event that
extra staff were needed to keep pace with the groups'
growth. He stated that he did not anticipate a fee increase.
Mr. Bruce referred to the fiscal note that was submitted by
the Department of Fish and Game for HB 333. He clarified
that both the legislative classification of funds and the
appropriation are needed. He added that the fiscal note was
prepared before the funds were included in the language
section of the operating budget.
Co-Chair Mulder MOVED to ADOPT the proposed committee
substitute work draft 1-GH2069\H Utermohle, 4/3/00. There
being NO OBJECTION, it was so ordered.
Co-Chair Mulder MOVED to delete lines 5 and 6 on page 3:
"and cannot exceed $400,000". He stressed that the language
is unnecessary
(Tape Change, HFC 00 - 00, Side 2)
There being NO OBJECTION, it was so ordered.
Representative J. Davies MOVED to ADOPT Amendment 2: delete
"two" on page 3, line 26 and insert "one". Co-Chair
Therriault OBJECTED for the purpose of discussion.
In response to a question by Co-Chair Therriault, Mr. Edgmon
stated that he did not have an objection to the amendment.
Representative Phillips spoke in support of retaining the
two-year period. She pointed out that it takes a lot of
money and effort for startup.
Representative Austerman spoke in support of the amendment.
He pointed out that the program gives away the resource and
stated that he would strike the whole section.
Representative G. Davis noted that existing CDQs would be
paying for new programs.
Co-Chair Mulder felt that it would be unfair to charge one
group for the administrative cost of another group for more
than one year.
Representative J. Davies observed that the state paid for
the previous program startup.
Representative Austerman MOVED to amend the amendment by
deleting subsection (f). Co-Chair Mulder OBJECTED. He argued
that new groups should probably be allowed time to find out
if they can "sink or swim."
Representative Grussendorf questioned if a new CDQ community
could form without subsection (f).
Co-Chair Therriault stressed that the language is
permissive, but does not authorize new CDQ's. Representative
J. Davies agreed and thought that it was up to the federal
government to authorize new CDQ communities.
Representative Austerman stressed that the dive fisheries
are being told to pay before they go fishing, while new
CDQ's would be given a resource and not charged for its
management.
Co-Chair Mulder withdrew his objection to the amendment to
Amendment 2. There being NO OBJECTION, Amendment 2 was
amended.
There being NO OBJECTION, Amendment 2 was adopted.
Co-Chair Mulder MOVED to report CSHB 334 (FIN) out of
Committee with the accompanying fiscal notes. There being NO
OBJECTION, it was so ordered.
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