Legislature(1999 - 2000)

03/28/2000 02:04 PM Senate L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
         SB 240-CHARGE FOR COMMUNITY DEVELOPMENT QUOTA                                                                          
                                                                                                                                
MR. JEFF BUSH, Deputy Commissioner of the Department of Community                                                               
& Economic Development, stated SB 240 creates a fee structure for                                                               
the Community Development Quota (CDQ) groups to make them self-                                                                 
sufficient and displaces $250,000 of general funds with an                                                                      
equivalent amount from Native groups.  CDQ is a federal program                                                                 
delegated to the Governor of Alaska, from there it is delegated to                                                              
the Department of Community & Economic Development (DCED) and                                                                   
Department of Fish & Game (DFG).  This has created over 1,000 jobs                                                              
annually and $20-30 million in royalty income to the groups.                                                                    
                                                                                                                                
DCED agreed that a program this profitable should become self-                                                                  
sufficient.  DCED approached the groups about creating a self-                                                                  
sufficient plan.  In some situations, State approval is required of                                                             
investment decisions that the groups are making.  They need to have                                                             
DCED staffed and capable of responding to those requests for                                                                    
approval.  The federal program requires the State to approve these                                                              
investment decisions.                                                                                                           
                                                                                                                                
Half of the fee is set at an equal rate for each CDQ group, and the                                                             
other half is based upon the amount of the allocation the groups                                                                
received.  The actual allocation amount does not always reflect the                                                             
same amount as the administrative cost associated with the program.                                                             
If a group receives a larger allocated amount, that group is more                                                               
likely to have more investment options and decisions that will                                                                  
require State oversight.  Each group will require some                                                                          
administrative overhead, the larger groups may require more than                                                                
the smaller groups.                                                                                                             
                                                                                                                                
The federal government authorized a fee program of its own, part of                                                             
the fee program is allocated to the State.  It will be an                                                                       
additional two years before the fee structure is in place.  If any                                                              
fees are collected and received by the State, those become an                                                                   
offset directly against the fees charged under this program.                                                                    
                                                                                                                                
The administration supports the proposed amendment relating to a                                                                
neutral position of the State with the FCC creating new CDQ groups.                                                             
Mr. Bush suggested adding to the amendment on page 3, line 6,  the                                                              
word "new" before "CDQ groups", and on page 3, line 8, insert                                                                   
"newly formed" before "CDQ group."  Those changes have been adopted                                                             
in the House, and Mr. Bush suggested the Senate make the same                                                                   
changes.                                                                                                                        
                                                                                                                                
SENATOR LEMAN moved amendment number one, making the changes Mr.                                                                
Bush suggested.  Without objection, the amendment was adopted.                                                                  
                                                                                                                                
SENATOR HOFFMAN moved amendment number two (a conceptual                                                                        
amendment).  Senator Leman objected.                                                                                            
                                                                                                                                
SENATOR HOFFMAN stated Mr. Robin Samuelson suggested a change in                                                                
language so the State would not get into discussions, leaving the                                                               
issues to the federal government of whether to support the                                                                      
expansion of the CDQ program.                                                                                                   
                                                                                                                                
CHAIRMAN MACKIE asked if the groups were comfortable with the                                                                   
language in the amendment.                                                                                                      
                                                                                                                                
SENATOR LEMAN stated he objected to hear the explanation of the                                                                 
amendment but will maintain the objection because he does not                                                                   
believe the amendment should be put forth for the State to maintain                                                             
neutrality.  The legislature should try to keep language as simple                                                              
as possible, without inserting language where it does not serve a                                                               
purpose.                                                                                                                        
                                                                                                                                
SENATOR HOFFMAN stated the CDQ groups he spoke with support the                                                                 
amendment.                                                                                                                      
                                                                                                                                
MR. BUSH stated federal legislation is required to expand the                                                                   
program.  The existing CDQ groups would oppose expansion of the                                                                 
program because it might cause a reduction in their allocation of                                                               
fish.  Those groups can get federal authorization to do that and                                                                
can receive an increase in allocation.                                                                                          
                                                                                                                                
CHAIRMAN MACKIE stated he supports Senator Hoffman because the                                                                  
legislature cannot take a position on this issue.  The amendment                                                                
does not hurt SB 240, the current language could make the State                                                                 
appear that it is advocating for the expansion of the CDQ program.                                                              
Amendment number two was adopted with Senators Hoffman, T. Kelly,                                                               
and Mackie voting "Yea", and Senator Leman voting "Nay."                                                                        
                                                                                                                                
MR. JOE KYLE, Aleutian Pribilof Island Group, stated support for SB
240 and the amendments.                                                                                                         
                                                                                                                                
MR. PETE SCHAEFFER, representing himself, stated all attempts at                                                                
participating in the CDQ program are economically driven.  Some                                                                 
fish have been completely wiped out and some groups do not qualify                                                              
for federal or State aid to remedy that situation.  The difference                                                              
in Kotzebue is that the numbers of fish are somewhat biologically                                                               
sound,  it is the market that has disappeared.  The marine animals                                                              
do not pay attention to boundaries for the CDQ groups, and CDQ                                                                  
groups are being penalized because of boundaries.  Mr. Schaeffer                                                                
stated support for SB 240 and the amendments.                                                                                   
                                                                                                                                
MR. GORDON ITO, representing himself, stated he would like to be                                                                
included in the CDQ program.  The State should support expansion                                                                
because it is getting harder to survive in Alaska.  Mr. Ito stated                                                              
he supports SB 240, but does not support Senator Hoffman's neutral                                                              
position.                                                                                                                       
                                                                                                                                
CHAIRMAN MACKIE stated Senator Adams had requested the committee                                                                
consider including language that would allow for the new approved                                                               
CDQ groups not to pay fees for two years.  Senator Hoffman offered                                                              
that amendment on Northwestern Alaska's behalf.  SB 240 would not                                                               
be used as a vehicle of support for other CDQ groups.                                                                           
                                                                                                                                
MR. ITO stated he understood when the CDQ program started many                                                                  
aspects were experimental.  Adopting a neutral amendment portrays                                                               
that the State does not support the CDQ program.                                                                                
                                                                                                                                
SENATOR LEMAN moved CSSB 240 (L&C) with individual recommendations                                                              
and accompanying fiscal notes.  Without objection, the motion                                                                   
carried.                                                                                                                        

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