Legislature(1999 - 2000)

03/25/1999 08:05 AM House CRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
        HOUSE COMMUNITY AND REGIONAL AFFAIRS                                                                                    
                 STANDING COMMITTEE                                                                                             
                   March 25, 1999                                                                                               
                     8:05 a.m.                                                                                                  
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                                 
                                                                                                                                
Representative Andrew Halcro, Co-Chairman                                                                                       
Representative John Harris, Co-Chairman                                                                                         
Representative Carl Morgan                                                                                                      
Representative Lisa Murkowski                                                                                                   
Representative Fred Dyson                                                                                                       
Representative Reggie Joule                                                                                                     
                                                                                                                                
MEMBERS ABSENT                                                                                                                  
                                                                                                                                
Representative Albert Kookesh                                                                                                   
                                                                                                                                
COMMITTEE CALENDAR                                                                                                              
                                                                                                                                
*HOUSE BILL NO. 63                                                                                                              
"An Act relating to land use regulation in residential zones by                                                                 
home rule municipalities."                                                                                                      
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
HOUSE BILL NO. 40                                                                                                               
"An Act combining parts of the Department of Commerce and Economic                                                              
Development and parts of the Department of Community and Regional                                                               
Affairs by transferring some of their duties to a new Department of                                                             
Commerce and Rural Development; transferring some of the duties of                                                              
the Department of Commerce and Economic Development and the                                                                     
Department of Community and Regional Affairs to other existing                                                                  
agencies; eliminating the Department of Commerce and Economic                                                                   
Development and the Department of Community and Regional Affairs;                                                               
relating to the Department of Commerce and Rural Development and                                                                
the commissioner of commerce and rural development; adjusting the                                                               
membership of certain multi- member bodies to reflect the transfer                                                              
of duties among departments and the elimination of departments;                                                                 
creating the office of international trade and relating to its                                                                  
duties; and providing for an effective date."                                                                                   
                                                                                                                                
     - MOVED CSHB 40(CRA) OUT OF COMMITTEE                                                                                      
                                                                                                                                
*HOUSE BILL NO. 133                                                                                                             
"An Act relating to municipal service areas and providing for voter                                                             
approval of the formation, alteration, or abolishment of certain                                                                
service areas; and providing for an effective date."                                                                            
                                                                                                                                
     - BILL HEARING POSTPONED                                                                                                   
                                                                                                                                
(* First public hearing)                                                                                                        
                                                                                                                                
PREVIOUS ACTION                                                                                                                 
                                                                                                                                
BILL: HB  63                                                                                                                    
SHORT TITLE: LAND USE IN HOME RULE BOROUGH                                                                                      
SPONSOR(S): REPRESENTATIVES(S) HALCRO                                                                                           
                                                                                                                                
Jrn-Date    Jrn-Page           Action                                                                                           
 1/25/99        79     (H)  READ THE FIRST TIME - REFERRAL(S)                                                                   
 1/25/99        79     (H)  CRA                                                                                                 
 2/11/99               (H)  CRA AT  8:00 AM CAPITOL 124                                                                         
 2/11/99               (H)  <BILL CANCELED>                                                                                     
 3/25/99               (H)  CRA AT  8:00 AM CAPITOL 124                                                                         
                                                                                                                                
BILL: HB  40                                                                                                                    
SHORT TITLE: DEPT OF COMMERCE & RURAL DEVELOPMENT                                                                               
SPONSOR(S): REPRESENTATIVES(S) KOHRING, Cowdery, Austerman,                                                                     
Therriault,                                                                                                                     
Harris                                                                                                                          
                                                                                                                                
Jrn-Date    Jrn-Page           Action                                                                                           
 1/19/99        28     (H)  PREFILE RELEASED 1/15/99                                                                            
 1/19/99        28     (H)  READ THE FIRST TIME - REFERRAL(S)                                                                   
 1/19/99        29     (H)  CRA, L&C, FINANCE                                                                                   
 3/09/99               (H)  CRA AT  8:00 AM CAPITOL 124                                                                         
 3/16/99       484     (H)  COSPONSOR(S): COWDERY                                                                               
 3/18/99               (H)  CRA AT  8:00 AM CAPITOL 124                                                                         
 3/18/99               (H)  HEARD AND HELD                                                                                      
 3/24/99       561     (H)  COSPONSOR(S): AUSTERMAN, THERRIAULT,                                                                
 3/24/99       561     (H)  HARRIS                                                                                              
 3/25/99               (H)  CRA AT  8:00 AM CAPITOL 124                                                                         
                                                                                                                                
WITNESS REGISTER                                                                                                                
                                                                                                                                
REPRESENTATIVE KOHRING, Sponsor of HB 40                                                                                        
Alaska State Legislature                                                                                                        
Capitol Building, Room 421                                                                                                      
Juneau, Alaska  99801                                                                                                           
Telephone:  (907) 465-2186                                                                                                      
POSITION STATEMENT:  Testified as Sponsor of HB 40.                                                                             
                                                                                                                                
TOM LAWSON, Director                                                                                                            
Division of Administrative Services                                                                                             
Department of Commerce & Economic Development                                                                                   
PO Box 110803                                                                                                                   
Juneau, Alaska 99811-0803                                                                                                       
Telephone:  (907) 465-2505                                                                                                      
POSITION STATEMENT:  Discussed the fiscal note for HB 40.                                                                       
                                                                                                                                
YVONNE CHASE, Acting Administrative Director                                                                                    
Director, Division of Community & Rural Development                                                                             
Department of Community & Regional Affairs Director                                                                             
333 West 4th Avenue, Suite 220                                                                                                  
Anchorage, Alaska 99501-2341                                                                                                    
Telephone:  (907) 269-4610                                                                                                      
POSITION STATEMENT:  Testified on HB 40.                                                                                        
                                                                                                                                
REPRESENTATIVE KAPSNER                                                                                                          
Alaska State Legislature                                                                                                        
Capitol Building, Room 424                                                                                                      
Juneau, Alaska  99801                                                                                                           
Telephone:  (907) 465-4942                                                                                                      
POSITION STATEMENT:  Testified on HB 40.                                                                                        
                                                                                                                                
CARL BERGER                                                                                                                     
Lower Kuskokwim Economic Development Council                                                                                    
PO Box 2021                                                                                                                     
Bethel, Alaska 99559                                                                                                            
Telephone:  (907) 543-5967                                                                                                      
POSITION STATEMENT:  Expressed concern regarding the continuance of                                                             
                    DCRA service.                                                                                               
                                                                                                                                
MICHELLE DECORSO, Community Development Planner                                                                                 
Association of Village Council Presidents                                                                                       
PO Box 2347                                                                                                                     
Bethel, Alaska 99559                                                                                                            
Telephone:  (907) 543-1924                                                                                                      
POSITION STATEMENT:  Testified on HB 40.                                                                                        
                                                                                                                                
SHARON CLARK                                                                                                                    
Clarks Point, Alaska                                                                                                            
Telephone:  (907) 236-1427                                                                                                      
POSITION STATEMENT:  Supported maintaining DCRA as a separate                                                                   
                       entity.                                                                                                  
                                                                                                                                
RAYMOND AGUVULUK, Mayor                                                                                                         
City of Wainwright                                                                                                              
PO Box 9                                                                                                                        
Wainwright, Alaska 99782                                                                                                        
Telephone:  (907) 763-2815                                                                                                      
POSITION STATEMENT:  Testified on HB 40.                                                                                        
                                                                                                                                
TIM GILMARTIN, Mayor and City Manager                                                                                           
Metlakatla Indian Community                                                                                                     
PO Box 8                                                                                                                        
Metlakatla, Alaska 99926                                                                                                        
Telephone:  (907) 886-4441                                                                                                      
POSITION STATEMENT:  Commented on HB 40.                                                                                        
                                                                                                                                
PERRY AHSOGEAK, Director                                                                                                        
Community & National Resources                                                                                                  
Tanana Chiefs Conference                                                                                                        
122 First Avenue                                                                                                                
Fairbanks, Alaska 99701                                                                                                         
Telephone:  (907) 452-8251                                                                                                      
POSITION STATEMENT:  Opposed HB 40.                                                                                             
                                                                                                                                
MARVIN YODER, City Manager                                                                                                      
City of Galena                                                                                                                  
PO Box 149                                                                                                                      
Galena, Alaska 99741                                                                                                            
Telephone:  (907) 656-1301                                                                                                      
POSITION STATEMENT:  Opposed HB 40.                                                                                             
                                                                                                                                
JOHN EASTAN                                                                                                                     
PO Box 849                                                                                                                      
Dillingham, Alaska 99576                                                                                                        
Telephone:  (907) 842-3366                                                                                                      
POSITION STATEMENT:  Opposed HB 40.                                                                                             
                                                                                                                                
LARRY DICKERSON, Executive Director                                                                                             
Copper Valley Economic Development Council                                                                                      
PO Box 9                                                                                                                        
Glennallen, Alaska 99588                                                                                                        
Telephone:  (907) 822-5001                                                                                                      
POSITION STATEMENT:  Emphasized the need to maintain the essential                                                              
                     functions, services and resources provided by                                                              
                     DCRA to remain no matter the organization.                                                                 
                                                                                                                                
JONATHON LACK, Legislative Assistant                                                                                            
     to Representative Halcro                                                                                                   
Alaska State Legislature                                                                                                        
Capitol Building, Room 418                                                                                                      
Juneau, Alaska  99801                                                                                                           
Telephone:  (907) 465-4939                                                                                                      
POSITION STATEMENT:  Answered questions.                                                                                        
                                                                                                                                
ACTION NARRATIVE                                                                                                                
                                                                                                                                
TAPE 99-20, SIDE A                                                                                                              
Number 0001                                                                                                                     
                                                                                                                                
CO-CHAIRMAN HARRIS called the House Community and Regional Affairs                                                              
Standing Committee meeting to order at 8:05 a.m.  Members present                                                               
at the call to order were Representatives Halcro, Harris, Morgan,                                                               
Murkowski, Dyson and Joule.  Representative Kookesh was not                                                                     
present.                                                                                                                        
                                                                                                                                
HB 63 - LAND USE IN HOME RULE BOROUGH                                                                                           
                                                                                                                                
Number 0050                                                                                                                     
                                                                                                                                
CO-CHAIRMAN HARRIS announced that the first order of business                                                                   
before the committee would be HOUSE BILL NO. 63, "An Act relating                                                               
to land use regulation in residential zones by home rule                                                                        
municipalities."                                                                                                                
                                                                                                                                
CO-CHAIRMAN HALCRO, Sponsor of HB 63, Alaska State Legislature,                                                                 
said that he would explain the proposed committee substitute (CS).                                                              
He informed the committee that a little over 10 years ago, his                                                                  
neighbors took a case regarding gravel extraction all the way to                                                                
the Alaska Supreme Court.  The Alaska Supreme Court ruled that                                                                  
gravel extraction was not compatible with the designated land use                                                               
development; therefore, the developers were shut down.  This seems                                                              
to be a constant battle.  Co-Chairman Halcro acknowledged that Sand                                                             
Lake gravel pit had served the community, but in the past 15 to 20                                                              
years subdivisions have developed around the border of the gravel                                                               
pit.  Approximately 15 years ago, the Sand Lake gravel pit was                                                                  
rezoned as residential R1.  This legislation merely establishes in                                                              
statute that extraction of gravel for commercial purposes from                                                                  
areas zoned residential is illegal.  The legislation further                                                                    
provides for a public hearing if municipalities want to change a                                                                
land use designation or use land for something other than allowed                                                               
under the land's current classification.  He pointed out that this                                                              
legislation ensures that there is adequate public testimony which                                                               
has not always been the case in the past.                                                                                       
                                                                                                                                
CO-CHAIRMAN HALCRO explained that on the Hillside, it is sometimes                                                              
necessary for developers to go in and take out gravel for the                                                                   
foundation which is allowed under a building permit.  Some                                                                      
developers may develop large tracts, this bill allows the developer                                                             
to extract and utilize gravel on-site for infrastructure                                                                        
improvements.  However, the legislation prohibits the transfer of                                                               
the gravel off-site.  Co-Chairman Halcro noted that last year in                                                                
his area, several neighborhood meetings were held due to a                                                                      
developer's proposal which would have resulted in a gravel truck                                                                
being on the streets in his district every five minutes for about                                                               
three years.  Although the Alaska Supreme Court has ruled that                                                                  
gravel extraction is not compatible with residential land use, the                                                              
temptation remains.  Co-Chairman Halcro stated that this is a                                                                   
municipal issue.  The municipality does have zoning enforcement                                                                 
rules, but those are not set in statute.  Co-Chairman Halcro noted                                                              
that this statute merely provides the municipality and the                                                                      
neighbors the right to say "No, that is a prohibited land use."                                                                 
There are a number of demands on the municipality's zoning                                                                      
enforcement.  Over the last few years, Co-Chairman Halcro's                                                                     
district has found it difficult to get the municipality to respond                                                              
and further the current rules are not clear.  This legislation                                                                  
merely clarifies what is acceptable and what is not.  This                                                                      
legislation allows a home rule borough to fine a violator up to                                                                 
$500 per day.  More importantly, this legislation provides the                                                                  
community with a set of guidelines in order to know what is                                                                     
acceptable and not acceptable with regard to land that is prezoned                                                              
residential.                                                                                                                    
                                                                                                                                
Number 0571                                                                                                                     
                                                                                                                                
CO-CHAIRMAN HARRIS asked for clarification on the difference                                                                    
between HB 63 and the proposed CS.                                                                                              
                                                                                                                                
CO-CHAIRMAN HALCRO explained that the proposed CS permits the home                                                              
rule borough to fine a violator and allows the developer to extract                                                             
gravel from the site under a building permit.  The building permit                                                              
would note the amount of gravel acceptable to be taken off-site.                                                                
The proposed CS establishes the fine per day.                                                                                   
                                                                                                                                
CO-CHAIRMAN HALCRO agreed with Co-Chairman Harris that the                                                                      
legislation was targeting commercial users.  Co-Chairman Halcro                                                                 
informed the committee that last summer a developer purchased a                                                                 
57-acre tract of land on which to build homes.  A week later, the                                                               
developer wanted to extract some gravel in order to move for                                                                    
foundations, although the 57-acre tract is relatively flat.                                                                     
Through other industry sources it was discovered that this                                                                      
developer intended to take the gravel off-site and utilize it in                                                                
different subdivisions as well as to bid low on public works jobs.                                                              
That would have resulted in yet another large hole in the ground as                                                             
well as lowering property values in the neighborhood.                                                                           
                                                                                                                                
Number 0774                                                                                                                     
                                                                                                                                
REPRESENTATIVE DYSON moved to adopt the proposed CS, LS0239\D,                                                                  
Cook, 3/5/99 as the working document before the committee.  There                                                               
being no objection, it was so ordered.                                                                                          
                                                                                                                                
REPRESENTATIVE DYSON noted that he has had much experience with                                                                 
this.  He believed that Co-Chairman Halcro fairly accurately frames                                                             
the argument.  He asked if the proposed CS has a by-pass provision                                                              
which would permit the use of gravel off-site, if the developer                                                                 
would not be impacting the neighborhood.                                                                                        
                                                                                                                                
CO-CHAIRMAN HALCRO replied no.  The proposed CS prohibits the                                                                   
extraction of gravel in those areas zoned residential.                                                                          
                                                                                                                                
REPRESENTATIVE DYSON asked if the legislation would prohibit a land                                                             
owner from "ruining" his land even when no harm is done to anyone                                                               
else.                                                                                                                           
                                                                                                                                
CO-CHAIRMAN HALCRO pointed out that the developer can always go                                                                 
before the local planning and zoning board or the local commission                                                              
to request the land be rezoned to allow such.                                                                                   
                                                                                                                                
REPRESENTATIVE DYSON asked if the committee would hear from anyone                                                              
from Anchorage Municipal Zoning.                                                                                                
                                                                                                                                
CO-CHAIRMAN HALCRO did not believe so.  He noted that this                                                                      
legislation was sent out to a number of contacts from which there                                                               
was no response.                                                                                                                
                                                                                                                                
REPRESENTATIVE DYSON stated that it would have been appropriate to                                                              
invite Anchorage zoning enforcement to comment on this legislation.                                                             
                                                                                                                                
CO-CHAIRMAN HALCRO commented that Steve Ellis, Manager of                                                                       
Codes/Land Use Enforcement, Department of Public Works,                                                                         
Municipality of Anchorage has been very frustrated and overworked.                                                              
Co-Chairman Halcro reiterated that the rules are not clear and                                                                  
there is no monitoring.  Co-Chairman Halcro said that he had talked                                                             
with Mr. Ellis about introducing something on this issue and Mr.                                                                
Ellis seemed very supportive.                                                                                                   
                                                                                                                                
REPRESENTATIVE DYSON wondered if while the committee is meeting,                                                                
Anchorage Municipal Zoning could be invited to testify.                                                                         
                                                                                                                                
Number 1207                                                                                                                     
                                                                                                                                
REPRESENTATIVE MURKOWSKI posed the following situation.  If a                                                                   
developer of a residential area that has extracted gravel does not                                                              
have a legitimate purpose in using the gravel elsewhere, would the                                                              
developer be restricted from moving that gravel from his land.                                                                  
                                                                                                                                
CO-CHAIRMAN HALCRO clarified that the legislation would restrict                                                                
the developer from moving the gravel off-site without a building                                                                
permit.  However, the developer could use the gravel elsewhere on                                                               
that property.  In further response to Representative Murkowski,                                                                
Co-Chairman Halcro agreed that the developer could get individual                                                               
permits to remove the gravel.                                                                                                   
                                                                                                                                
REPRESENTATIVE MURKOWSKI appreciated the frustration of those in                                                                
the Sand Lake area.  Has there been contact with other home rule                                                                
areas regarding this issue?                                                                                                     
                                                                                                                                
CO-CHAIRMAN HALCRO pointed out that the sponsor statement has an                                                                
article from the Peninsula Clarion attached which discusses a                                                                   
similar problem in the Kenai Peninsula.  The concerns in the Kenai                                                              
Peninsula are regarding the property value as well as the effects                                                               
on the drinking water.  He anticipated, with the diminishing                                                                    
availability of land, that this will continue to be a problem.                                                                  
Co-Chairman Halcro emphasized that the legislation does protect                                                                 
legitimate gravel operations.  In further response to                                                                           
Representative Murkowski, Co-Chairman Halcro said that he had not                                                               
had any input from the Fairbanks area.                                                                                          
                                                                                                                                
Number 1413                                                                                                                     
                                                                                                                                
REPRESENTATIVE DYSON pointed out that another problem surfaces                                                                  
after gravel extraction takes place and no residential development                                                              
occurs.  In such cases, the pits end up being unattractive and when                                                             
full of water, a dangerous area for children as well as a breeding                                                              
ground for mosquitos.  Also when these pits are dry, the dirt                                                                   
bikers congregate in the pit resulting in injuries and annoyed                                                                  
residents.  Representative Dyson indicated that the difficulty is                                                               
holding the developer to his commitment, especially when gravel is                                                              
so valuable in Southcentral Alaska.                                                                                             
                                                                                                                                
CO-CHAIRMAN HALCRO agreed.  Co-Chairman Halcro noted that in the                                                                
aforementioned incident, one of the partners in the development                                                                 
company owned a paving company.  The word is that when that                                                                     
development company bid on the public works project to repair the                                                               
coastal trail, the company bid approximately $26,000 less than the                                                              
next bidder.  The savings would be achieved due to the gravel from                                                              
the lot that the developer already owned.  Co-Chairman Halcro                                                                   
stated that remediation is a huge problem.  In another situation in                                                             
Co-Chairman Halcro's area, there is a pit that has been remediated                                                              
and filled in every summer for seven or eight years and it will be                                                              
another 10 years before the pit is filled.  The land itself is lost                                                             
because the fill is overburden and tree stumps.  Co-Chairman Halcro                                                             
said that there are a number of issues.                                                                                         
                                                                                                                                
REPRESENTATIVE MURKOWSKI inquired as to whether there is currently                                                              
a requirement that if gravel is extracted there shall be                                                                        
remediation.                                                                                                                    
                                                                                                                                
CO-CHAIRMAN HALCRO replied no.                                                                                                  
                                                                                                                                
Number 1631                                                                                                                     
                                                                                                                                
REPRESENTATIVE MURKOWSKI pointed out that there is a provision in                                                               
the proposed CS that states that the "... borough may by ordinance                                                              
require remediation".  She asked if Co-Chairman Halcro intended for                                                             
that to be retrospective as well as prospective.                                                                                
                                                                                                                                
CO-CHAIRMAN HALCRO stated that it would be difficult to have it                                                                 
retrospective because these pits are large.  Therefore, the                                                                     
remediation would be prospective.                                                                                               
                                                                                                                                
CO-CHAIRMAN HARRIS asked if the legislation only referred to home                                                               
rule boroughs.                                                                                                                  
                                                                                                                                
CO-CHAIRMAN HALCRO clarified that the legislation referred to home                                                              
rule municipalities as is in the title.                                                                                         
                                                                                                                                
CO-CHAIRMAN HARRIS asked if it would be appropriate to change the                                                               
language in the body to be consistent with the title because there                                                              
is a difference between home rule municipalities and home rule                                                                  
boroughs.                                                                                                                       
                                                                                                                                
CO-CHAIRMAN HALCRO informed the committee that the Ms. Cook,                                                                    
Legislative Counsel, Legislative Legal and Research, drafted the                                                                
legislation.  He agreed with Co-Chairman Harris that the                                                                        
legislation refers to home rule boroughs.                                                                                       
                                                                                                                                
CO-CHAIRMAN HARRIS indicated that it would be appropriate to change                                                             
the language in the title to be consistent and refer to the home                                                                
rule borough.                                                                                                                   
                                                                                                                                
REPRESENTATIVE MURKOWSKI asked whether the sponsor's intent was to                                                              
have this legislation speak to the home rule borough or the home                                                                
rule municipality.                                                                                                              
                                                                                                                                
CO-CHAIRMAN HALCRO was uncertain as to why the title and language                                                               
of the bill were not consistent.  The legislation was supposed to                                                               
refer to home rule boroughs.  Co-Chairman Halcro explained that                                                                 
Alaska statute specifies that first and second class boroughs shall                                                             
provide for planning and platting.  Therefore, first and second                                                                 
class boroughs are the only boroughs mandated to have zoning to                                                                 
which this legislation would apply.  This legislation would not                                                                 
apply in a community without zoning.                                                                                            
                                                                                                                                
REPRESENTATIVE MURKOWSKI moved a conceptual amendment that the                                                                  
title of the proposed CS be changed to refer to home rule boroughs.                                                             
There being no objection, it was so ordered.                                                                                    
                                                                                                                                
Number 1846                                                                                                                     
                                                                                                                                
REPRESENTATIVE MURKOWSKI asked if the zoning office in Anchorage                                                                
was contacted.                                                                                                                  
                                                                                                                                
CO-CHAIRMAN HARRIS informed the committee that Don Alspach was                                                                  
contacted and Mr. Alspach said that he would like to submit written                                                             
testimony.                                                                                                                      
                                                                                                                                
REPRESENTATIVE DYSON stated that he liked the intent of the                                                                     
legislation.  He indicated the need to postpone the action on the                                                               
proposed CS until hearing from the Municipality of Anchorage.  He                                                               
further indicated the need to formally notice the Alaska Municipal                                                              
League and the contractor community regarding the proposed CS.                                                                  
Representative Dyson noted that it was not his intention to delay                                                               
the process, but he believed those folks should have the                                                                        
opportunity to review this legislation.                                                                                         
                                                                                                                                
CO-CHAIRMAN HARRIS asked if Co-Chairman Halcro had contacted those                                                              
people mentioned by Representative Dyson.                                                                                       
                                                                                                                                
CO-CHAIRMAN HALCRO reiterated that he had spoken with Steve Ellis,                                                              
folks in the municipality, folks in his district, and the community                                                             
council.  Co-Chairman Halcro noted that he had not spoken with Mr.                                                              
Alspach.  Co-Chairman Halcro did not have a problem with waiting                                                                
for the municipality to comment.                                                                                                
                                                                                                                                
CO-CHAIRMAN HARRIS suggested that other home rule boroughs such as                                                              
Fairbanks and Juneau be contacted for comment as well.                                                                          
                                                                                                                                
REPRESENTATIVE MURKOWSKI commented that after recognizing                                                                       
Representative Dyson's comments and the fact that HB 63 only has                                                                
one committee of referral, the legislation should receive a full                                                                
and fair hearing.                                                                                                               
                                                                                                                                
CO-CHAIRMAN HARRIS announced that HB 63 would be held and heard                                                                 
Tuesday, March 30, 1999 in order to receive more input.  He noted                                                               
his support of the legislation.                                                                                                 
                                                                                                                                
REPRESENTATIVE JOULE agreed with Co-Chairman Harris' comments that                                                              
all home rule boroughs be contacted for comment.                                                                                
                                                                                                                                
REPRESENTATIVE DYSON pointed out that the Alaska Municipal League                                                               
should be able to notice this bill for comment per its mission.  He                                                             
commented that if he were an Anchorage resident, he would wonder                                                                
where his lobbyist was.                                                                                                         
                                                                                                                                
CO-CHAIRMAN HALCRO noted that HB 63 was on the schedule over a                                                                  
month ago, although it was taken off for changes.  He agreed with                                                               
Representative Dyson and said, "The silence is deafening."                                                                      
                                                                                                                                
The committee stood at-ease from 8:36 a.m. to 8:40 a.m.                                                                         
                                                                                                                                
HB 40 - DEPARTMENT OF COMMERCE & RURAL DEVELOPMENT                                                                              
                                                                                                                                
Number 2140                                                                                                                     
                                                                                                                                
CO-CHAIRMAN HARRIS announced the next order of business before the                                                              
committee as HOUSE BILL NO. 40, "An Act combining parts of the                                                                  
Department of Commerce and Economic Development and parts of the                                                                
Department of Community and Regional Affairs by transferring some                                                               
of their duties to a new Department of Commerce and Rural                                                                       
Development; transferring some of the duties of the Department of                                                               
Commerce and Economic Development and the Department of Community                                                               
and Regional Affairs to other existing agencies; eliminating the                                                                
Department of Commerce and Economic Development and the Department                                                              
of Community and Regional Affairs; relating to the Department of                                                                
Commerce and Rural Development and the commissioner of commerce and                                                             
rural development; adjusting the membership of certain multi-                                                                   
member bodies to reflect the transfer of duties among departments                                                               
and the elimination of departments; creating the office of                                                                      
international trade and relating to its duties; and providing for                                                               
an effective date."                                                                                                             
                                                                                                                                
REPRESENTATIVE JOULE referred to Section 75, page 44, line 12 of HB
40 and suggested that the language in subsection (b) be changed                                                                 
from "may" to "shall".                                                                                                          
                                                                                                                                
REPRESENTATIVE KOHRING, Sponsor of HB 40, Alaska State Legislature,                                                             
noted that he had discussed this change with Representative Joule                                                               
yesterday.  Representative Kohring said that he would be open to                                                                
the modification if the committee feels it is necessary.  He                                                                    
pointed out that the language in HB 40 is reflective of the                                                                     
language in the statutes.                                                                                                       
                                                                                                                                
Number 2281                                                                                                                     
                                                                                                                                
TOM LAWSON, Director, Division of Administrative Services,                                                                      
Department of Commerce & Economic Development, commented that much                                                              
work went into this fiscal note although it was an update from the                                                              
fiscal note for HB 400 last year.  He noted that the fiscal note                                                                
before the committee includes one-time costs as well as savings.                                                                
The fiscal note includes input from the following agencies:  the                                                                
Department of Commerce & Economic Development (DCED), the                                                                       
Department of Community & Regional Affairs (DCRA), the Department                                                               
of Health & Social Services (DHSS), the Department of Labor, and                                                                
the Department of Administration.  The Department of Administration                                                             
is involved due to the department's leasing specialist, Keith                                                                   
Gerken.  Mr. Lawson emphasized that the fiscal note is a best                                                                   
guess.  He pointed out that HB 40 would impact four separate                                                                    
agencies, over $200 million worth of programs, and approximately                                                                
500 state employees.                                                                                                            
                                                                                                                                
MR. LAWSON directed the committee to the first page of the fiscal                                                               
note.  The total cost of HB 40 is $718,700 for the first year.                                                                  
Savings are realized beginning in the second year, therefore                                                                    
savings in the second year amount to $189,000 which grows to a                                                                  
savings of $221,100 in the third year and thereafter.  He noted                                                                 
that there are two major elements to HB 40:  the savings from staff                                                             
cuts, and the capital cost.                                                                                                     
                                                                                                                                
CO-CHAIRMAN HARRIS understood Mr. Lawson to say that in fiscal year                                                             
(FY) 2000 it will cost $718,700 to implement HB 40.  Does that cost                                                             
span all the departments?                                                                                                       
                                                                                                                                
MR. LAWSON replied yes.                                                                                                         
                                                                                                                                
CO-CHAIRMAN HARRIS asked if in the following years the same amount                                                              
of money would be saved or would it be a zero increase every year.                                                              
He noted that the fiscal note projects a savings of $221,100 in FY                                                              
2002; would an additional $221,100 be saved in FY 2003?                                                                         
                                                                                                                                
MR. LAWSON said that it would be the same savings each year.                                                                    
                                                                                                                                
CO-CHAIRMAN HARRIS stated, "So, in reality, it's zero those next                                                                
years.  You're not actually saving anything from the previous                                                                   
year."                                                                                                                          
                                                                                                                                
MR. LAWSON agreed.                                                                                                              
                                                                                                                                
Number 2475                                                                                                                     
                                                                                                                                
MR. LAWSON directed the committee to page 2 of the fiscal note                                                                  
which discusses the staff reductions.  The first staff reductions                                                               
are one commissioner and one secretary.  Mr. Lawson believed that                                                               
the work load would increase for the first two years while                                                                      
adjustments are made to the integration of the two departments.                                                                 
Therefore, Mr. Lawson did not believe any further staff could be                                                                
cut at that point.  He pointed out that three of the directors are                                                              
downgraded from which some savings would result.  The third year                                                                
savings is the result of a personnel rule which states that                                                                     
personnel in a frozen salary situation would have to absorb the pay                                                             
cut in the third year of the freeze.  Mr. Lawson understood the                                                                 
need to reduce staff.  Therefore, in the first twelve months a                                                                  
comprehensive review of all staff will occur and focus on the need                                                              
to have a second deputy commissioner and a special assistant.  In                                                               
the second twelve months of HB 40, the focus would shift the                                                                    
administrative services staff in order to determine if there is any                                                             
duplication.  Mr. Lawson informed the committee that his                                                                        
administrative staff is swamped virtually all the time.  Although                                                               
the staff may be doing the same tasks under the merger, the work                                                                
from one agency is not eliminated.                                                                                              
                                                                                                                                
REPRESENTATIVE MURKOWSKI asked if after the first 24 months, does                                                               
the fiscal note reflect a reduction in staff.                                                                                   
                                                                                                                                
MR. LAWSON replied no, but indicated that it would be probable that                                                             
there would be more staff reductions.                                                                                           
                                                                                                                                
Number 2659                                                                                                                     
                                                                                                                                
MR. LAWSON moved on to the second major element of the fiscal note,                                                             
the capital cost.  The capital cost includes the moving costs, the                                                              
one time network services changes, and space planning.  The total                                                               
capital costs are $907,700.  He explained that they felt the best                                                               
way to estimate the moving costs was to establish a moving cost                                                                 
factor.  Mr. Lawson informed the committee that Mr. Gerken                                                                      
determined a moving cost factor of $6,100 which is outlined on page                                                             
six.  The next step was to create the Anchorage and Juneau space                                                                
allocation worksheet which lead to the inventory of the Anchorage                                                               
and Juneau staff, the determination of where that staff was                                                                     
located, and where that staff should move.  He noted that  the                                                                  
staff inventory is based on current year staffing levels and                                                                    
therefore, does not include any budgeted increments that may be                                                                 
included in the Governor's FY 2000 budget request.  He pointed out                                                              
that no new leasing costs are included in the capital costs.  Mr.                                                               
Lawson explained that the reason for referring to the costs as                                                                  
capital costs is because he did not believe everything could be                                                                 
accomplished in one year which would necessitate the money carrying                                                             
forward into future years.  The money should be budgeted in the                                                                 
budget of the Office of Management and Budget due to HB 40's impact                                                             
on four different agencies.                                                                                                     
                                                                                                                                
MR. LAWSON directed the committee to page four of the fiscal note                                                               
which is the space allocation worksheet for Juneau.  Per HB 40, the                                                             
job training staff would be moved to the Department of Labor.  The                                                              
Department of Labor feels it important that the nine job training                                                               
staff be physically moved into the Department of Labor.  However,                                                               
the current space for the Department of Labor does not allow for                                                                
extra staff.  There is a commerce office, the Alaska Seafood                                                                    
Marketing Institute (ASMI), in that building.  Therefore, the ASMI                                                              
staff would be moved to the DCRA offices and the labor staff would                                                              
be moved in.  Since he believed it vital that the DCRA programs be                                                              
integrated into the DCED programs, Mr. Lawson said that the DCRA                                                                
staff left should be moved into the State Office Building.                                                                      
However, the ninth floor which houses DCED is filled.  In order to                                                              
achieve this integration,  the Division of Occupational Licensing                                                               
staff would have to be moved to the DCRA building.  Mr. Lawson                                                                  
pointed out that the worksheet specifies that the Head Start                                                                    
program, three staff, would be moved from DCRA to DHSS, but that is                                                             
not reflected in the options listed at the bottom of page four of                                                               
the fiscal note.  With that error, the total number of positions                                                                
being moved, 96, does not change.                                                                                               
                                                                                                                                
Number 2953                                                                                                                     
                                                                                                                                
REPRESENTATIVE MURKOWSKI pointed out that the fiscal note allocates                                                             
$25,000 for Juneau to contract an architect to design office                                                                    
facilities.  She understood that the architect would not be                                                                     
designing new offices, but rather placing staff in the current                                                                  
space.                                                                                                                          
                                                                                                                                
MR. LAWSON replied yes.                                                                                                         
                                                                                                                                
TAPE 99-20, SIDE B                                                                                                              
                                                                                                                                
CO-CHAIRMAN HALCRO inquired as to what are tenant improvements.                                                                 
                                                                                                                                
MR. LAWSON deferred to Mr. Gerken who is currently out of town.                                                                 
Mr. Gerken is comfortable that this is a real cost estimate.                                                                    
                                                                                                                                
CO-CHAIRMAN HALCRO pointed out that the construction of tenant                                                                  
improvements amounts to over 50 percent of the moving costs.                                                                    
Co-Chairman Halcro indicated that the cost for the construction of                                                              
tenant improvements is a variable and has some flexibility.                                                                     
                                                                                                                                
MR. LAWSON again deferred to Mr. Gerken.                                                                                        
                                                                                                                                
Number 2900                                                                                                                     
                                                                                                                                
MR. LAWSON directed the committee to the Anchorage space allocation                                                             
worksheet.  He noted that the Anchorage worksheet is a radical                                                                  
change from last year's fiscal note which is good news.  The major                                                              
difference is that the move into the Atwood Building is 12 months                                                               
further along.  The Atwood Building was purchased by the state and                                                              
money was appropriated for the move of all state employees into the                                                             
building.  Therefore, the costs for moving staff into the Atwood                                                                
Building is already appropriated and is not included in the fiscal                                                              
note.  At this point, almost all of DCED's offices as well as the                                                               
Governor's offices in the Frontier Building are scheduled to move                                                               
into the Atwood Building this summer.  He noted that the Department                                                             
of Natural Resources has already started to move into the Atwood                                                                
Building.  Mr. Lawson informed the committee that due to the                                                                    
leasing situation in the Atwood Building, everyone cannot be moved                                                              
at once.  Moving the DCRA staff into the Atwood Building would                                                                  
possibly take up to six or seven years.  In Anchorage, 15 job                                                                   
training staff in DCRA would be moved to the Department of Labor.                                                               
The child care program, 14 staff, would be moved to DHSS. A total                                                               
of 29 staff moving in Anchorage would need to be paid for through                                                               
HB 40.  Mr. Lawson informed the committee that the total moving                                                                 
cost for the staff in Juneau and Anchorage is $762,500.                                                                         
                                                                                                                                
Number 2760                                                                                                                     
                                                                                                                                
MR. LAWSON moved to the second aspect of the capital cost, the                                                                  
network services.  The challenge is to convert various systems.                                                                 
Due to the movement of the Anchorage labor staff and child care                                                                 
staff out of DCRA, new hardware and software systems are necessary.                                                             
The cost of those systems are estimated on the last page of the                                                                 
fiscal note.  The network software for DCRA and DCED are not the                                                                
same which resulted in the component in the fiscal note to transfer                                                             
the system hardware and software in order to have the same kinds of                                                             
systems.  If the goal is to truly integrate all the programs, the                                                               
network systems must be integrated as well.                                                                                     
                                                                                                                                
CO-CHAIRMAN HALCRO inquired as to why different divisions utilized                                                              
different software.                                                                                                             
                                                                                                                                
MR. LAWSON explained that different state agencies utilize                                                                      
different software.  For example, DCRA uses a Windows NT server                                                                 
while DCED uses a NetWare server.  Mr. Lawson did not believe there                                                             
is a statewide policy on network software.  There are standards for                                                             
software on individual work stations.                                                                                           
                                                                                                                                
MR. LAWSON continued on with the last element of the capital costs,                                                             
space planning.  This would require a space planner to work with                                                                
the Juneau staff.  A space planner has been utilized for months in                                                              
Anchorage due to the planned move to the Atwood Building.  He said                                                              
that it is a challenge to make the most efficient use of the space,                                                             
especially when the space is limited.                                                                                           
                                                                                                                                
Number 2548                                                                                                                     
                                                                                                                                
YVONNE CHASE, Acting Administrative Director, Director, Division of                                                             
Community & Rural Development, Department of Community & Regional                                                               
Affairs, pointed out that there are costs that can be quantified                                                                
which are included in the fiscal note while other costs are                                                                     
difficult to measure.  Ms. Chase said that one could argue that as                                                              
programs move from one department to another, the services to the                                                               
community will be continued.  However, the notion of similar                                                                    
services being placed together is debatable.  She noted that DCRA                                                               
spans the spectrum from fuel to babies which to many would seem                                                                 
incompatible.  She pointed out that with DHSS for example, families                                                             
need more than just social services.  In DCRA, one of the most                                                                  
effective things is working with communities on the basic survival                                                              
needs in energy.  Further, through the Division of Municipal &                                                                  
Regional Assistance there is assistance provided to communities to                                                              
identify problems and work to change those problems.  One of the                                                                
important pieces for that is the support for children and families                                                              
through job training and the early childhood programs.                                                                          
                                                                                                                                
MS. CHASE emphasized that the costs for communities that do not                                                                 
receive that combined service delivery system often results in an                                                               
increase in child abuse and juvenile delinquency.  Ms. Chase                                                                    
reiterated that the services will remain no matter the                                                                          
organization, but there is about a five year window for people to                                                               
settle again.  Ms. Chase identified the issue at hand as which way                                                              
saves money in the long-run.                                                                                                    
                                                                                                                                
Number 2333                                                                                                                     
                                                                                                                                
REPRESENTATIVE KAPSNER, Alaska State Legislature, testifying via                                                                
teleconference from Bethel,  expressed concern that rural Alaska                                                                
not lose or have diminished service in those services that were                                                                 
previously provided by DCRA.  She noted that DCRA has been very                                                                 
helpful with the fish disaster.                                                                                                 
                                                                                                                                
CARL BERGER, Lower Kuskokwim Economic Development Council (LKEDC),                                                              
testified via teleconference from Bethel.  He explained that the                                                                
Lower Kuskokwim Economic Development Council is an Alaska Regional                                                              
Development Organization (ARDOR) which serves 27 communities on the                                                             
Lower Kuskokwim.  Mr. Berger expressed the need to continue the                                                                 
service provided through state agencies as in the past.  The                                                                    
continuation of service no matter the organization is of importance                                                             
not only for disaster situations, but also for normal everyday                                                                  
services provided to the rest of the state.                                                                                     
                                                                                                                                
MICHELLE DECORSO, Community Development Planner, Association of                                                                 
Village Council Presidents, testified via teleconference from                                                                   
Bethel.  She believed that DCRA has always been a vital link to                                                                 
villages in the region.  She described DCRA as a sort of clearing                                                               
house of information even for services that DCRA does not provide.                                                              
Ms. Decorso wondered if DCRA would maintain its presence.                                                                       
                                                                                                                                
REPRESENTATIVE KOHRING reiterated that the primary intent of HB 40                                                              
is to focus on economic development.  This legislation also                                                                     
attempts to preserve and protect the integrity of programs                                                                      
currently in DCRA because Representative Kohring believed that if                                                               
such restructuring was not attempted, departments would be open to                                                              
substantial budget cuts.  He did not feel that staff administering                                                              
these programs would be overburdened because only the oversight of                                                              
the management structure is being increased.                                                                                    
                                                                                                                                
MS. DECORSO asked if Representative Kohring intended to keep the                                                                
Bethel office open.                                                                                                             
                                                                                                                                
REPRESENTATIVE KOHRING clarified that there is no language in HB 40                                                             
that would eliminate the Bethel office or any other office.  Any                                                                
modifications to programs and the location of the offices will be                                                               
left to the discretion of the new department.                                                                                   
                                                                                                                                
Number 1990                                                                                                                     
                                                                                                                                
SHARON CLARK, testifying via teleconference from Clarks Point,                                                                  
believed that DCRA has established a great relationship and                                                                     
provided much responsibility to the Bush.  She did not want the                                                                 
efficiencies or services of DCRA to be diminished in any way if the                                                             
consolidation should occur.  With regard to the cost savings of                                                                 
moving staff, Ms. Clark was concerned that the staff reduction                                                                  
savings are not realistic to the cost of space planning and the                                                                 
conversion of network services.  She noted that DCED does not                                                                   
really deal with the social problems of the communities.  Ms. Clark                                                             
did agree with the move of child care and job training due to the                                                               
significant savings that could be realized from the elimination of                                                              
duplicative services.  Ms. Clark supported maintaining DCRA as a                                                                
separate entity.                                                                                                                
                                                                                                                                
RAYMOND AGUVULUK, Mayor, City of Wainwright, testified via                                                                      
teleconference from Wainwright.  He inquired as to why the                                                                      
consolidation of DCRA and DCED was wanted.                                                                                      
                                                                                                                                
REPRESENTATIVE KOHRING explained that HB 40 would save on upper                                                                 
management costs when the departments are consolidated.                                                                         
Representative Kohring noted that there are nine programs within                                                                
DCRA and DCED that are similar in nature.  Therefore, consolidation                                                             
of programs similar in nature would create more efficiency. He                                                                  
reiterated that HB 40 would also focus on economic development.                                                                 
                                                                                                                                
MR. AGUVULUK asked if HB 40 would be passed this year.                                                                          
                                                                                                                                
CO-CHAIRMAN HARRIS stated that HB 40 would go through the process.                                                              
The legislation has two more committee referrals, House Labor &                                                                 
Commerce and House Finance.                                                                                                     
                                                                                                                                
Number 1616                                                                                                                     
                                                                                                                                
TIM GILMARTIN, Mayor and City Manager, Metlakatla Indian Community,                                                             
testified via teleconference from Metlakatla.  He noted that his                                                                
experience has taught him that paring down is not always the                                                                    
answer.  Mr. Gilmartin said that he was trying to keep informed.                                                                
                                                                                                                                
CO-CHAIRMAN HARRIS said that the committee wanted to ensure that                                                                
rural communities are not forgotten and are not hurt by HB 40.                                                                  
                                                                                                                                
PERRY AHSOGEAK, Director, Community & National Resources, Tanana                                                                
Chiefs Conference (TCC), testified via teleconference from                                                                      
Fairbanks.  He said, "We oppose this legislation."  He noted that                                                               
DCRA has always been a voice for the rural areas and has always                                                                 
listened and worked for the villages.                                                                                           
                                                                                                                                
MARVIN YODER, City Manager, City of Galena, testified via                                                                       
teleconference from Galena.  Mr. Yoder opposed HB 40.  He discussed                                                             
his time working with the City of Craig which is doing well now,                                                                
however other small communities need the services provided by DCRA.                                                             
He said, "For these small communities, having a friendly agency                                                                 
dedicated to their needs may make the difference between survival                                                               
and dissolution."  Mr. Yoder pointed out that there is uncertainty                                                              
regarding the status of second class cities, village councils, and                                                              
other organized boroughs.  The state is at a critical point in                                                                  
planning for what a municipality is.  Mr. Yoder believed there                                                                  
should be an agency dedicated to finding solutions to such.                                                                     
                                                                                                                                
REPRESENTATIVE KOHRING explained that under the new organization                                                                
established by HB 40, there would be a new Rural Affairs Division                                                               
which is essentially the former DCRA.  There would also be a                                                                    
Statewide Economic Development Division which is essentially the                                                                
former DCED.  The programs of the departments remain in tact.                                                                   
Representative Kohring reiterated the improvements that would be                                                                
found in scoping and planning due to this centralized approach with                                                             
regard to centralized expert staff and financial support for rural                                                              
areas.  This is closer to the one-stop shop concept.                                                                            
                                                                                                                                
MR. YODER said that he was in favor of the efficiency, but the                                                                  
concern remains that the small communities need a department such                                                               
as DCRA.                                                                                                                        
                                                                                                                                
REPRESENTATIVE KOHRING stated that the plan is to retain that                                                                   
connection.                                                                                                                     
                                                                                                                                
Number 1190                                                                                                                     
                                                                                                                                
JOHN EASTAN, testifying via teleconference from Dillingham, opposed                                                             
HB 40.  Mr. Eastan understood the need for consolidation of                                                                     
duplicative services, but the overlapping missions of DCRA and DCED                                                             
seem to be a bit different in some areas.  For example, the mission                                                             
of DCED for growth differs from the infrastructure development that                                                             
DCRA has in place.  The DCRA has a more aggressive approach towards                                                             
the development of resources that may not take rural areas into                                                                 
consideration.  Mr. Eastan expressed concern that the grant                                                                     
programs assistance to obtain grants, municipal assistance and                                                                  
revenue sharing, capital grants to tribal governments, training,                                                                
and technical assistance to governments may be interrupted or                                                                   
severed.  He also indicated concern with the loss of a cabinet                                                                  
position who is the advocate for the rural areas.                                                                               
                                                                                                                                
Number 1042                                                                                                                     
                                                                                                                                
LARRY DICKERSON, Executive Director, Copper Valley Economic                                                                     
Development Council, testified via teleconference from Glennallen.                                                              
Mr. Dickerson said that he favored improving efficiency and                                                                     
effectiveness of the state delivery of programs.  Mr. Dickerson                                                                 
noted that there are some essential functions that DCRA provides                                                                
that no one in the state organization provides.  No matter what                                                                 
happens with regard to the consolidation of programs, he expressed                                                              
the need to ensure that those essential functions of DCRA not be                                                                
eliminated.  Through his experience with reorganization or                                                                      
consolidation, the delivery of services, resources and/or functions                                                             
are harmed.                                                                                                                     
                                                                                                                                
MR. DICKERSON pointed out that DCRA is the one organization that                                                                
not only does economic development, but also helps to build the                                                                 
capacities needed for economic development in the state.  As part                                                               
of the unorganized borough, Glennallen does not have many of the                                                                
organizational capacities to manage the growth and change                                                                       
occurring.  He noted that he has had a 20 year or so relationship                                                               
with DCRA due to his various positions over the state.  Mr.                                                                     
Dickerson emphasized the need for the essential functions,                                                                      
services, and resources to remain for those in the rural areas.                                                                 
                                                                                                                                
REPRESENTATIVE MORGAN expressed the need for DCRA to maintain its                                                               
identity through this merger due to the department's importance to                                                              
all of rural Alaska.                                                                                                            
                                                                                                                                
There being no further public testimony, the public testimony was                                                               
closed.                                                                                                                         
                                                                                                                                
Number 0805                                                                                                                     
                                                                                                                                
REPRESENTATIVE JOULE referred to page 44, line 12, Section 75 (b).                                                              
He proposed an amendment that "may" be changed to "shall".  He                                                                  
recognized that the language, "may", was taken from the DCRA                                                                    
statute, but the language for DCED is "shall".  If these two                                                                    
departments are to be consolidated and further budget reductions                                                                
are reviewed, the "may" language leaves the door open as far as                                                                 
what the department can and cannot do.  Representative Joule urged                                                              
the committee to change the language.  Representative Joule offered                                                             
the amendment which follows:                                                                                                    
          Page 44, line 12                                                                                                      
               Delete "may"                                                                                                     
               Insert "shall"                                                                                                   
                                                                                                                                
REPRESENTATIVE KOHRING concurred with the proposed amendment which                                                              
he believed would make the former DCRA stronger.                                                                                
                                                                                                                                
REPRESENTATIVE MURKOWSKI said that she supported Representative                                                                 
Joule's amendment.  She derived from the testimony today that the                                                               
concern is that the services of DCRA be maintained.  The proposed                                                               
language change could alleviate that concern.                                                                                   
                                                                                                                                
REPRESENTATIVE JOULE asked if the committee was working off the                                                                 
committee substitute; did the committee adopt the proposed CS,                                                                  
Version LS0056\D, Lauterbach, 3/16/99, at the last meeting?                                                                     
                                                                                                                                
CO-CHAIRMAN HARRIS said that the proposed CS, Version D, was                                                                    
adopted at the last meeting.  Co-Chairman Harris asked if there was                                                             
any objection to Representative Joule's amendment.  There being no                                                              
objection, the amendment was adopted.                                                                                           
                                                                                                                                
Number 0504                                                                                                                     
                                                                                                                                
CO-CHAIRMAN HALCRO noted that he had a proposed amendment,                                                                      
Amendment 2, for the committee's consideration.  He pointed out                                                                 
that part of the fear with the merger of the two departments is                                                                 
that the effectiveness of DCRA would be diminished.  The overall                                                                
goal of the sponsor is well-intended and Co-Chairman Halcro                                                                     
supported the concept, but care must be taken in this endeavor.  He                                                             
informed everyone that the committee heard from Byron Mallott                                                                   
regarding his work with communities and the concerns expressed by                                                               
those communities.                                                                                                              
                                                                                                                                
CO-CHAIRMAN HALCRO explained that Amendment 2 would establish a                                                                 
rural affairs advocate in the Office of the Governor.  This notion                                                              
developed after discussions regarding the Rural Governance                                                                      
Commission who wanted a point person for rural Alaska.  Amendment                                                               
2 would create a rural affairs advocate, a cabinet-level position,                                                              
that would be appointed by the governor.  This advocate would work                                                              
out of the governor's office and be subject to the same rules of                                                                
ethics as commissioners.  Co-Chairman Halcro noted that the rural                                                               
affairs advocate will have statutory duties which are listed in                                                                 
Section 44.19.012 of Amendment 2.  Co-Chairman Halcro believed that                                                             
the rural affairs advocate could be a good source of information                                                                
for the legislature in years to come.                                                                                           
                                                                                                                                
CO-CHAIRMAN HALCRO moved that Amendment 2 be adopted.  Amendment 2                                                              
reads as follows:                                                                                                               
                                                                                                                                
     Page 1, line 9, following "development":                                                                                   
          Insert "; establishing in the Office of the Governor the                                                              
          position of rural affairs advocate"                                                                                   
                                                                                                                                
     Page 26, following line 4:                                                                                                 
          Insert a new bill section to read:                                                                                    
     "*Sec. 50. AS 39.20 is amended by adding a new section to                                                                  
     read:                                                                                                                      
               Sec.39.20.085. Salary of rural affairs advocate.                                                                 
               The monthly salary of the rural affairs advocate                                                                 
               appointed under AS 44.10.012 is equal to Step E,                                                                 
               Range 28, of the salary schedule in AS 39.27.011(a)                                                              
               for Juneau, Alaska ."                                                                                            
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 26, following line 6:                                                                                                 
          Insert new bill sections to read:                                                                                     
     "*Sec.52. AS 39.52.170(c) is amended to read:                                                                              
               (c) The head of a principal; executive department                                                                
               of the state may not accept employment for                                                                       
               compensating outside the agency that the executive                                                               
               head serves.  The rural affairs advocate may not                                                                 
               accept employment for compensation outside the                                                                   
               Office of the Governor.                                                                                          
     *Sec.53. AS 39.52.180(d) is amended to read:                                                                               
               (d) A former governor, lieutenant governor, rural                                                                
               affairs advocate, or department head, as                                                                         
               appropriate.  This subsection does not prohibit                                                                  
               service as a volunteer lobbyist described in AS                                                                  
               24.45.161(a)(1) or a representational lobbyist as                                                                
               defined under regulations of the Alaska Public                                                                   
               Offices Commission."                                                                                             
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 28, following line 16:                                                                                                
          Insert new bill sections to read:                                                                                     
     "*Sec.64. AS 44.19.010 is amended to read:                                                                                 
               Sec. 44.19.010. Office of the Governor. The Office                                                               
               of the Governor includes the lieutenant governor,                                                                
               the budget officer, the rural affairs advocate, and                                                              
               the staff that the governor finds necessary to                                                                   
               administer the executive powers of the state.                                                                    
     *Sec.65. AS 44.19 is amended by adding a new section to read:                                                              
          Sec.44.19.012. Rural affairs advocate. (a) The governor                                                               
          shall appoint a rural affairs advocate whose duties are                                                               
          to                                                                                                                    
               (1) advise the governor and the heads of each                                                                    
               principal executive department about the role of                                                                 
               rural governments;                                                                                               
               (2) monitor and advance recommendations about                                                                    
               proposed policy changes that would affect rural                                                                  
               governments and rural affairs;                                                                                   
               (3) monitor and advance recommendations about                                                                    
               delivery of government services                                                                                  
               (4) assist in coordinating efforts of state                                                                      
               agencies in providing services to and in the rural                                                               
               areas of the state;                                                                                              
               (5) advocate within state government for                                                                         
               maximization of local autonomy and local control;                                                                
               and                                                                                                              
               (6) encourage respect for differing aspirations,                                                                 
               traditions, and cultures in the state.                                                                           
          (b) The rural affairs advocate may not employ staff or                                                                
          adopt regulations."                                                                                                   
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Renumber internal references to bill sections in accordance                                                                
     with this amendment.  Below are all internal bill section                                                                  
     references in this bill:                                                                                                   
                                                                                                                                
          Page 69, line 26                                                                                                      
          Page 70, line 30                                                                                                      
          Page 71, line 3                                                                                                       
                                                                                                                                
REPRESENTATIVE MURKOWSKI objected for discussion purposes.  She                                                                 
inquired as to how the rural affairs advocate would mesh with the                                                               
head of the rural affairs division.  Would the rural affairs                                                                    
advocate be the advocate for all departments or for the revamped                                                                
Department of Commerce and Rural Development?                                                                                   
                                                                                                                                
CO-CHAIRMAN HALCRO explained that the Governor currently has a                                                                  
special assistant on rural issues which would be replaced by the                                                                
rural affairs advocate.  The rural affairs advocate would be the                                                                
voice of all departments with regard to all issues pertaining to                                                                
rural Alaska.                                                                                                                   
                                                                                                                                
TAPE 99-21, SIDE A                                                                                                              
                                                                                                                                
CO-CHAIRMAN HALCRO said, in response to Representative Murkowski,                                                               
that the rural affairs advocate would not be subject to                                                                         
confirmation, but would be appointed by the governor.                                                                           
                                                                                                                                
REPRESENTATIVE MURKOWSKI indicated that all the governor's                                                                      
appointments are subject to confirmation.                                                                                       
                                                                                                                                
CO-CHAIRMAN HALCRO pointed out that the rural affairs advocate is                                                               
not a commissioner and therefore the position does not require                                                                  
confirmation by the governor.                                                                                                   
                                                                                                                                
REPRESENTATIVE KOHRING said that he would be flexible in order to                                                               
provide assurances to those in rural Alaska that the programs in                                                                
the new department are given adequate attention and administered                                                                
properly.  Representative Kohring expressed the need to ensure that                                                             
the rural affairs advocate position does not result in a blossoming                                                             
of additional positions underneath this cabinet level position.                                                                 
                                                                                                                                
CO-CHAIRMAN HALCRO directed Representative Kohring to page 2, line                                                              
28, which should address his concern.                                                                                           
                                                                                                                                
REPRESENTATIVE MURKOWSKI surmised that the primary difference                                                                   
between the current special assistant to the Governor on rural                                                                  
affairs and the proposed rural affairs advocate is that the rural                                                               
affairs advocate is a cabinet position.                                                                                         
                                                                                                                                
CO-CHAIRMAN HALCRO agreed with Representative Murkowski.  He noted                                                              
that currently the Governor's special assistant to rural affairs                                                                
position is vacant.                                                                                                             
                                                                                                                                
REPRESENTATIVE MURKOWSKI asked, directing the question to the rural                                                             
committee members, if this rural affairs advocate would alleviate                                                               
some of the rural district's concerns regarding the consolidation.                                                              
                                                                                                                                
Number 0325                                                                                                                     
                                                                                                                                
REPRESENTATIVE JOULE commented that the Alaska Constitution                                                                     
requires the existence of a local government affairs agency under                                                               
the Executive Branch which has been the DCRA with its commissioner.                                                             
Representative Joule said that voice would be carried to the new                                                                
consolidated department, but that would not be the sole purpose of                                                              
the new department.  Representative Joule supported the proposed                                                                
language of the rural affairs advocate.                                                                                         
                                                                                                                                
CO-CHAIRMAN HALCRO clarified that the special assistant does not                                                                
have statutory duties, but the proposed rural affairs advocate                                                                  
would have statutory duties.                                                                                                    
                                                                                                                                
CO-CHAIRMAN HARRIS inquired as to the other cabinet positions that                                                              
are not confirmed by the legislature.                                                                                           
                                                                                                                                
CO-CHAIRMAN HALCRO said that he was not sure.                                                                                   
                                                                                                                                
REPRESENTATIVE JOULE commented that at this level there would be a                                                              
lot of networking between the different departments and                                                                         
commissioners.  He believed there would be positive interaction.                                                                
                                                                                                                                
REPRESENTATIVE MORGAN said, "I'll support it.  I think it's time.                                                               
We've got to start showing that we do have a heart. ...and we do                                                                
think of the whole of Alaska as a whole, not just Anchorage,                                                                    
Fairbanks and not really look at the Bush.  So, I think it's time                                                               
and I really appreciate it."                                                                                                    
                                                                                                                                
REPRESENTATIVE DYSON stated that Amendment 2 is an unfortunate                                                                  
compromise that he would strongly support.  "I think that the one                                                               
man one vote that had us, forced us to redistrict the Senate by                                                                 
population did a disservice to the intention of the upper House in                                                              
our state.  And, certainly on a national level, the framers                                                                     
understood that the Senate was the only protection the small states                                                             
had against the overwhelming power of the large and populous                                                                    
states.  And I believe that our state constitution framers had                                                                  
exactly the same intention and that--the idea that it would                                                                     
representative--representation by judicial districts or something                                                               
else other than a strictly population base was an attempt to                                                                    
protect the large and rural areas from the unintended, but                                                                      
overwhelming power of the population bases.  And rural Alaska lost                                                              
a strong protection and advocacy inadvertently as a result of that                                                              
ruling."  Representative Dyson believed that Co-Chairman Halcro was                                                             
making the best out of an unfortunate decision.  He noted that the                                                              
only other strong voice the rural areas have in the legislature is                                                              
this committee.  He appreciated the committee's sensitivity to the                                                              
disenfranchisement of rural populations.  Representative Dyson                                                                  
trusted that the rural affairs advocate will have more than                                                                     
symbolic meaning.                                                                                                               
                                                                                                                                
CO-CHAIRMAN HARRIS asked if Representative Murkowski maintained her                                                             
objection.                                                                                                                      
                                                                                                                                
REPRESENTATIVE MURKOWSKI reiterated that she supported Amendment 2,                                                             
but she did not see language in Amendment 2 that states that the                                                                
rural affairs advocate is appointed by the governor.                                                                            
                                                                                                                                
CO-CHAIRMAN HALCRO directed Representative Murkowski to Section 65,                                                             
lines 13 and 14 subsection (a) specifies that this position is                                                                  
appointed by the governor.                                                                                                      
                                                                                                                                
REPRESENTATIVE MURKOWSKI asked if this cabinet appointment is                                                                   
subject to legislative confirmation.                                                                                            
                                                                                                                                
JONATHON LACK, Legislative Assistant to Representative Halcro,                                                                  
Alaska State Legislature, clarified that the pay range of the rural                                                             
affairs advocate is at the cabinet level, but the appointment is                                                                
not a cabinet appointment.  Therefore, legislative confirmation is                                                              
not required.  Mr. Lack noted that the committee could change that,                                                             
if desired.  Since this position is not a department head, the                                                                  
constitution does not require confirmation.                                                                                     
                                                                                                                                
CO-CHAIRMAN HARRIS believed that the intent of the rural affairs                                                                
advocate is to be similar to the Director of the Office of                                                                      
Management & Budget.                                                                                                            
                                                                                                                                
REPRESENTATIVE JOULE pointed out that the Chief of Staff and                                                                    
Director of the Office of Management & Budget are not subject to                                                                
confirmation which would be similar to the rural affairs advocate.                                                              
                                                                                                                                
REPRESENTATIVE MURKOWSKI withdrew her objection.                                                                                
                                                                                                                                
CO-CHAIRMAN HARRIS asked if there were any other objections.  There                                                             
being no further objections, Amendment 2 was adopted.                                                                           
                                                                                                                                
Number 1177                                                                                                                     
                                                                                                                                
CO-CHAIRMAN HALCRO moved to report CSHB 40, Version LS0056\D,                                                                   
Lauterbach, 3/24/99, out of committee with individual                                                                           
recommendations and the accompanying fiscal notes.                                                                              
                                                                                                                                
REPRESENTATIVE JOULE noted that HB 40 is scheduled to be heard in                                                               
House Labor & Commerce and House Finance Committees.                                                                            
                                                                                                                                
There being no objection, CSHB 40(CRA) was reported out of                                                                      
committee.                                                                                                                      
                                                                                                                                
REPRESENTATIVE KOHRING thanked the committee for its consideration                                                              
of HB 40 which he believed was a better piece of legislation due to                                                             
the amendments.  He believed that the fiscal situation of the state                                                             
was bringing rural and urban Alaska together.                                                                                   
                                                                                                                                
ADJOURNMENT                                                                                                                     
                                                                                                                                
There being no further business before the committee, the House                                                                 
Community & Regional Affairs Standing Committee meeting was                                                                     
adjourned at 10:02 a.m.                                                                                                         

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