Legislature(2007 - 2008)SENATE FINANCE 532

05/11/2007 09:00 AM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 104 NATURAL GAS PIPELINE PROJECT TELECONFERENCED
Moved Out of Committee 5/10/07
+ HB 87 CITIZEN ADVISORY COMM ON FEDERAL AREAS TELECONFERENCED
Moved CSHB 87(FIN)am Out of Committee
+= SB 144 TOURISM CONTRACT MATCHING FUNDS TELECONFERENCED
Moved CSSB 144(STA) Out of Committee
+= HB 162 MORTGAGE LENDING TELECONFERENCED
Scheduled But Not Heard
+ Bills Previously Heard/Scheduled TELECONFERENCED
                            MINUTES                                                                                           
                    SENATE FINANCE COMMITTEE                                                                                  
                          May 11, 2007                                                                                        
                           9:18 a.m.                                                                                          
                                                                                                                                
                                                                                                                              
CALL TO ORDER                                                                                                               
                                                                                                                                
Co-Chair Bert Stedman convened the meeting at approximately                                                                     
9:18:51 AM.                                                                                                                   
                                                                                                                                
PRESENT                                                                                                                     
                                                                                                                                
Senator Bert Stedman, Co-Chair                                                                                                  
Senator Charlie Huggins, Vice Chair                                                                                             
Senator Kim Elton                                                                                                               
Senator Joe Thomas                                                                                                              
Senator Fred Dyson                                                                                                              
                                                                                                                                
Also Attending:  REPRESENTATIVE MIKE KELLY;                                                                                   
                                                                                                                                
Attending via Teleconference:  From an offnet location: DICK                                                                  
MYLIUS, Director, Division of Mining, Land and Water, Department                                                                
of Natural Resources;                                                                                                           
                                                                                                                                
SUMMARY INFORMATION                                                                                                         
                                                                                                                                
HB  87-CITIZEN ADVISORY COMM ON FEDERAL AREAS                                                                                   
                                                                                                                                
The Committee heard from the sponsor and the Department of                                                                      
Natural Resources. The bill was reported from Committee.                                                                        
                                                                                                                                
SB 144-TOURISM CONTRACT MATCHING FUNDS                                                                                          
                                                                                                                                
The bill was reported from Committee.                                                                                           
                                                                                                                                
9:19:40 AM                                                                                                                    
                                                                                                                                
                                                                                                                                
     CS FOR HOUSE BILL NO. 87(FIN) am                                                                                           
     "An Act relating to the Citizens' Advisory Commission on                                                                   
     Federal Management Areas in Alaska; and providing for an                                                                   
     effective date."                                                                                                           
                                                                                                                                
                                                                                                                                
This was  the first hearing for  this bill in the  Senate Finance                                                               
Committee.                                                                                                                      
                                                                                                                                
9:19:43 AM                                                                                                                    
                                                                                                                                
Co-Chair  Stedman  announced  intent  to report  this  bill  from                                                               
Committee at this hearing.                                                                                                      
                                                                                                                                
9:19:51 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MIKE  KELLY, Sponsor  of the bill,  testified that                                                               
in  the  year  1981  Senator Bettye  Fahrenkamp  facilitated  the                                                               
creation  of   the  Citizens   Advisory  Commission   on  Federal                                                               
Management Areas.  During the 1990s  oil prices declined  to nine                                                               
dollars per  barrel and  when the  scheduled termination  date of                                                               
the  Commission neared,  then Governor  Frank Murkowski  chose to                                                               
allow the program "sunset" rather than  be extended as part of an                                                               
effort to reduce State expenditures.                                                                                            
                                                                                                                                
Representative   Kelly  stated   that   this  legislation   would                                                               
reinstate the Commission  with a reduced staff  of two positions.                                                               
This should assist in containing costs.                                                                                         
                                                                                                                                
9:21:14 AM                                                                                                                    
                                                                                                                                
Representative  Kelly  reported  that  in  response  to  concerns                                                               
raised by Representative Mary  Nelson regarding representation on                                                               
the Commission from  all areas of the state,  the legislation was                                                               
amended  to specify  that the  Commission would  be comprised  of                                                               
members from each geographic region.                                                                                            
                                                                                                                                
9:21:33 AM                                                                                                                    
                                                                                                                                
Representative Kelly told of the  approximately 230 million acres                                                               
of federally-owned  land in  the state.  The Commission  would be                                                               
tasked to provide knowledge and  resources for Alaskans utilizing                                                               
federally owned lands. The Commission  would be familiar with the                                                               
rules and regulations governing these  lands, as well as having a                                                               
personal  relationship with  the  land  managers. The  Commission                                                               
would  have the  experience and  expertise to  advise land  users                                                               
whether their claims for usage were valid.                                                                                      
                                                                                                                                
9:22:27 AM                                                                                                                    
                                                                                                                                
Representative  Kelly  summarized   that  the  Commission  "could                                                               
actually help us with access issues no matter who the party is."                                                                
                                                                                                                                
9:22:45 AM                                                                                                                    
                                                                                                                                
Senator  Olson asked  the reason  the Executive  Branch chose  to                                                               
allow the Commission to expire.                                                                                                 
                                                                                                                                
9:22:52 AM                                                                                                                    
                                                                                                                                
Representative  Kelly reiterated  the  primary  reason to  reduce                                                               
State spending given  the lower revenue generated as  a result of                                                               
lower oil prices.                                                                                                               
                                                                                                                                
Senator  Olson clarified  that no  problems were  associated with                                                               
the Commission's actions or decisions.                                                                                          
                                                                                                                                
9:23:13 AM                                                                                                                    
                                                                                                                                
Representative Kelly confirmed and  noted that the Commission had                                                               
no  adjudication  authority  and   only  served  in  an  advisory                                                               
capacity.                                                                                                                       
                                                                                                                                
9:23:26 AM                                                                                                                    
                                                                                                                                
DICK  MYLIUS,  Director,  Division  of Mining,  Land  and  Water,                                                               
Department  of Natural  Resources,  testified via  teleconference                                                               
from  an offnet  location  in support  of  this legislation.  The                                                               
Commission could  assist Alaskans  with issues  regarding federal                                                               
land  management.   Although  the  Division   currently  includes                                                               
positions charged with such relationships,  the focus is on State                                                               
government  interests  with no  time  or  resources available  to                                                               
address citizens'  concerns. The Commission would  assist private                                                               
Alaskan citizens  in several aspects of  interaction with federal                                                               
land management.                                                                                                                
                                                                                                                                
9:24:43 AM                                                                                                                    
                                                                                                                                
Mr.   Mylius  acknowledged   the  "significant"   estimated  cost                                                               
reflected  on   the  fiscal  note.  To   adequately  conduct  the                                                               
Commission's  activities,  a  staff  of two  positions  would  be                                                               
necessary. Those positions would be located in Fairbanks.                                                                       
                                                                                                                                
9:25:05 AM                                                                                                                    
                                                                                                                                
Senator Elton  spoke to a  resolution addressed by the  Senate in                                                               
response to a ruling by  the federal subsistence board pertaining                                                               
to preference  for subsistence activity  on the  Kenai Peninsula.                                                               
He   asked   whether   such  reactions   to   subsistence   board                                                               
determinations would be in the purview of the Commission.                                                                       
                                                                                                                                
9:25:30 AM                                                                                                                    
                                                                                                                                
Mr. Mylius replied  that the Commission would not  be involved in                                                               
activities  related solely  to  fish and  game  use. Instead  the                                                               
Commission  would address  land use  issues unless  it determined                                                               
that subsistence board actions affected land use.                                                                               
                                                                                                                                
9:26:14 AM                                                                                                                    
                                                                                                                                
Co-Chair  Stedman   asked  if   the  Department   supported  this                                                               
legislation.                                                                                                                    
                                                                                                                                
Mr. Mylius repeated his earlier affirmation of the bill.                                                                        
                                                                                                                                
9:26:22 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman directed the witness to detail the fiscal note.                                                                
                                                                                                                                
9:26:31 AM                                                                                                                    
                                                                                                                                
Mr. Mylius responded  that most of the funding  would be required                                                               
for positions  to staff the  Commission consisting of  a director                                                               
compensated  at a  Range 20  and  an assistant  compensated at  a                                                               
Range  16. The  salaries would  be  adjusted to  provide for  the                                                               
higher  cost  of   living  in  Fairbanks  compared   to  that  of                                                               
Anchorage.  Travel  expenses  would  be significant  due  to  the                                                               
disbursement  of  membership to  all  regions  of the  state  and                                                               
because the Commission  would meet three to  four times annually.                                                               
Additional funding would  be utilized to lease  office space, for                                                               
utilities and other equipment.                                                                                                  
                                                                                                                                
9:27:42 AM                                                                                                                    
                                                                                                                                
Mr. Mylius compared  the operating expenses to  past budgets. The                                                               
Commission  initially had  three to  four staff  positions, which                                                               
were reduced to two and  then to one executive director position.                                                               
At that point, the Commission was difficult to function.                                                                        
                                                                                                                                
Mr.  Mylius affirmed  Representative Kelly's  statement that  the                                                               
Commission had been eliminated for budgetary reasons.                                                                           
                                                                                                                                
9:28:50 AM                                                                                                                    
                                                                                                                                
Co-Chair  Stedman  established  that  no  further  testimony  was                                                               
forthcoming.                                                                                                                    
                                                                                                                                
9:28:58 AM                                                                                                                    
                                                                                                                                
Senator  Thomas  requested  an   explanation  of  the  membership                                                               
representing each region  of the state as  provided in subsection                                                               
(b)  of  Sec.  41.37.170.  Membership  and  officers.,  added  in                                                               
Section 1. He asked if the regions were already delineated.                                                                     
                                                                                                                                
9:29:32 AM                                                                                                                    
                                                                                                                                
Representative Kelly  responded that the original  version of the                                                               
bill provided that  representation would consist of  at least one                                                               
person  from  each  of  the   state's  four  judicial  districts.                                                               
Representative  Nelson expressed  concern that  rural communities                                                               
might not be  represented. The regions provided  in the committee                                                               
substitute   were  satisfactory   to   the  representative   from                                                               
Southwestern Alaska.                                                                                                            
                                                                                                                                
9:30:06 AM                                                                                                                    
                                                                                                                                
Co-Chair  Stedman  directed  the  sponsor  to  elaborate  on  the                                                               
regions.                                                                                                                        
                                                                                                                                
9:30:12 AM                                                                                                                    
                                                                                                                                
Representative Kelly  relayed the concern that  if the membership                                                               
was  based on  judicial  districts, the  Commission could  become                                                               
comprised exclusively  of members from major  population centers.                                                               
He  agreed this  should not  occur. Subsequently  in consultation                                                               
with the Division of Legal  and Research Services, the geographic                                                               
regions were selected.  He noted these regions  are also codified                                                               
elsewhere in statute as pertaining to other subjects.                                                                           
                                                                                                                                
9:30:49 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman understood the  amendment language would provide                                                               
for better representation on the Commission from remote areas.                                                                  
                                                                                                                                
9:30:58 AM                                                                                                                    
                                                                                                                                
Representative Kelly affirmed.                                                                                                  
                                                                                                                                
9:31:00 AM                                                                                                                    
                                                                                                                                
Senator  Huggins  alluded to  the  complexity  of veterans'  land                                                               
claims.  He  asked  whether the  Commission  would  address  this                                                               
issue.                                                                                                                          
                                                                                                                                
9:31:23 AM                                                                                                                    
                                                                                                                                
Representative  Kelly  conceived  of  a  situation  in  which  an                                                               
Alaskan resident could be in  dispute with a federal land manager                                                               
over these lands and the Commission could become involved.                                                                      
                                                                                                                                
9:32:01 AM                                                                                                                    
                                                                                                                                
Co-Chair  Hoffman  offered  a  motion to  report  the  bill  from                                                               
Committee  with   individual  recommendations   and  accompanying                                                               
fiscal notes.                                                                                                                   
                                                                                                                                
9:32:28 AM                                                                                                                    
                                                                                                                                
Senator  Elton objected.  He requested  the  sponsor provide  him                                                               
with information  regarding the intended  scope of duties  of the                                                               
Commission. He considered the Department  of Natural Resources an                                                               
advocate for Alaskans in matters  pertaining to use of federally-                                                               
owned lands. He expressed concern  that the Commission could have                                                               
expanded  duties  that include  advocating  for  a specific  user                                                               
group or  individual, which may  be in contradiction to  the best                                                               
interest of the majority of residents.                                                                                          
                                                                                                                                
9:33:45 AM                                                                                                                    
                                                                                                                                
Representative Kelly offered examples  of previous cases in which                                                               
the Commission had been involved.                                                                                               
                                                                                                                                
9:34:18 AM                                                                                                                    
                                                                                                                                
Senator Elton withdrew his objection to the motion.                                                                             
                                                                                                                                
9:34:24 AM                                                                                                                    
                                                                                                                                
Without further  objection, CS  HB 87  (FIN)am was  REPORTED FROM                                                               
COMMITTEE with zero  fiscal note #2 from  the Legislative Affairs                                                               
Agency and  fiscal note  #4 for $246,200  from the  Department of                                                               
Natural Resources.                                                                                                              
                                                                                                                                
9:34:37 AM                                                                                                                    
                                                                                                                                
                                                                                                                                
     CS FOR SENATE BILL NO. 144(STA)                                                                                            
     "An  Act  relating  to  matching   funds  in  state  tourism                                                               
     marketing  contracts with  trade associations;  establishing                                                               
     the  Alaska  Tourism  Marketing   Funding  Task  Force;  and                                                               
     providing for an effective date."                                                                                          
                                                                                                                                
                                                                                                                                
This was the  second hearing for this bill in  the Senate Finance                                                               
Committee.                                                                                                                      
                                                                                                                                
9:34:55 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman  directed attention  to a  new fiscal  note from                                                               
the Department of Commerce, Community and Economic Development.                                                                 
                                                                                                                                
9:35:08 AM                                                                                                                    
                                                                                                                                
Senator Elton  announced he  would not  object to  reporting this                                                               
bill  from Committee.  However he  would  object to  implications                                                               
that the cruise ship industry  might not contribute to the Alaska                                                               
Travel  Industry  Association in  protest  of  the passenger  tax                                                               
approved by voters in the  last general election. The cruise ship                                                               
industry  has  contributed  approximately   $2  million  to  this                                                               
"generic marketing program" and should  continue to do so. To not                                                               
participate would "bootstrap" small businesses.                                                                                 
                                                                                                                                
Senator Elton spoke  of the "market test" in  which State funding                                                               
would be  appropriate. He exampled  the Alaska  Seafood Marketing                                                               
Institute's promotion  of certain fisheries, such  as winter king                                                               
salmon.                                                                                                                         
                                                                                                                                
9:37:46 AM                                                                                                                    
                                                                                                                                
Senator  Elton  stressed  the  need   to  market  to  independent                                                               
travelers. He reiterated his disapproval  of the possibility that                                                               
the  cruise industry  could "withdraw"  $2  million from  generic                                                               
marketing of travel to Alaska.                                                                                                  
                                                                                                                                
9:38:19 AM                                                                                                                    
                                                                                                                                
Senator Elton  considered this  legislation a  one-year temporary                                                               
solution,  which he  was  willing to  tolerate.  However, he  was                                                               
critical of  any future  action to appropriate  State funds  to a                                                               
generic marketing program if all  participants do not contribute.                                                               
Cruise ship industry participation is "extremely important."                                                                    
                                                                                                                                
9:39:05 AM                                                                                                                    
                                                                                                                                
Co-Chair  Hoffman  offered  a  motion to  report  the  bill  from                                                               
Committee with individual recommendations and new fiscal note.                                                                  
                                                                                                                                
9:39:29 AM                                                                                                                    
                                                                                                                                
Senator Huggins  objected to the  motion to thank the  sponsor on                                                               
behalf of  constituents in the  Mat-Su Valley region that  do not                                                               
have the benefit of large  cruise ships bringing many visitors to                                                               
the area. He removed his objection.                                                                                             
                                                                                                                                
9:40:07 AM                                                                                                                    
                                                                                                                                
There was no  further objection and CS SB 144  (STA) was REPORTED                                                               
FROM  COMMITTEE with  a new  fiscal  note dated  5/9/07 from  the                                                               
Department of Commerce, Community and Economic Development.                                                                     
                                                                                                                                
                                                                                                                                
ADJOURNMENT                                                                                                                 
                                                                                                                                
Co-Chair Bert Stedman adjourned the meeting at 9:40:42 AM                                                                     

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