Legislature(2007 - 2008)HOUSE FINANCE 519

04/06/2008 04:00 PM House FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Delayed to 04:30 pm today --
+ HB 106 REPEAL FEES FOR STUDDED TIRES TELECONFERENCED
Moved CSHB 106(FIN) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 422 CHILDREN'S TRUST GRANT FOR ENDOWMENT TELECONFERENCED
<Bill Hearing Canceled>
+= HB 314 G.O. BONDS FOR TRANSPORTATION PROJECTS TELECONFERENCED
Moved CSHB 314(FIN) Out of Committee
+= SB 254 AK REGIONAL ECONOMIC ASSISTANCE PROGRAM TELECONFERENCED
Moved HCS SB 254(FIN) Out of Committee
                  HOUSE FINANCE COMMITTEE                                                                                       
                       April 6, 2008                                                                                            
                         4:41 p.m.                                                                                              
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Chenault called the House  Finance Committee meeting                                                                   
to order at 4:41:59 PM.                                                                                                       
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Mike Chenault, Co-Chair                                                                                          
Representative Kevin Meyer, Co-Chair                                                                                            
Representative Bill Stoltze, Vice-Chair                                                                                         
Representative Harry Crawford                                                                                                   
Representative Richard Foster                                                                                                   
Representative Les Gara                                                                                                         
Representative Mike Hawker                                                                                                      
Representative Reggie Joule                                                                                                     
Representative Mike Kelly                                                                                                       
Representative Mary Nelson                                                                                                      
Representative Bill Thomas, Jr.                                                                                                 
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Frank   Homan,  Commissioner,   Commercial  Fisheries   Entry                                                                   
Commission;   Pete  Ecklund,   Staff,  Representative   Kevin                                                                   
Meyer;  Frank Richards,  Deputy  Commissioner  of Highways  &                                                                   
Public Facilities,  Department  of Transportation and  Public                                                                   
Facilities;  Representative Bryce  Edgmon; Adam Berg,  Staff,                                                                   
Representative  Bryce Edgmon;  Representative Kyle  Johansen;                                                                   
Jerry   Burnett,   Director,   Division   of   Administrative                                                                   
Services,  Department  of Revenue;  Nancy  Slagle,  Director,                                                                   
Division   of   Administrative    Services,   Department   of                                                                   
Transportation and Public Facilities                                                                                            
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Johanna Bales,  Deputy Director, Tax Division,  Department of                                                                   
Revenue                                                                                                                         
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
SB 254    "An  Act  extending  the termination  date  of  the                                                                   
          Alaska regional economic assistance program; and                                                                      
          providing for an effective date."                                                                                     
                                                                                                                                
          HCS SB 254(FIN) was REPORTED out of Committee with                                                                    
          a "do pass" recommendation, a title change                                                                            
          resolution,   a  new  zero   fiscal  note   by  the                                                                   
          Department   of  Fish  and   Game,  and   with  two                                                                   
          previously   published    fiscal   notes   by   the                                                                   
          Department  of  Commerce,  Community  and  Economic                                                                   
          Development.                                                                                                          
                                                                                                                                
HB 314    "An Act providing for  and relating to the issuance                                                                   
          of  general  obligation bonds  for  the purpose  of                                                                   
          paying the  cost of state transportation  projects;                                                                   
          and providing for an effective date."                                                                                 
                                                                                                                                
          CSHB 314(FIN) was REPORTED  out of Committee with a                                                                   
          "do  pass" recommendation and  with fiscal  note #1                                                                   
          by  the Office  of the  Governor and  a new  fiscal                                                                   
          note by the Department of Revenue.                                                                                    
                                                                                                                                
HB 106    "An Act  repealing fees imposed on the  sale of new                                                                   
          tires, the  sale of certain studded  tires, and the                                                                   
          installation  of certain metal studs on  tires; and                                                                   
          providing for an effective date."                                                                                     
                                                                                                                                
          CSHB  10 106(FIN)  was  REPORTED  out of  Committee                                                                   
          with   a   "do  pass"   recommendation   and   with                                                                   
          previously   published  fiscal   note  #2   by  the                                                                   
          Department of Revenue.                                                                                                
                                                                                                                                
4:42:27 PM                                                                                                                    
                                                                                                                                
SENATE BILL NO. 254                                                                                                           
                                                                                                                                
     "An Act extending the termination date of the Alaska                                                                       
     regional economic assistance program; and providing for                                                                    
     an effective date."                                                                                                        
                                                                                                                                
Vice-Chair Stoltze  MOVED to ADOPT  HCS SB 254(FIN),  labeled                                                                   
25-LS1367\E, as the  work draft before the Committee.   There                                                                   
being NO OBJECTION, it was so ordered.                                                                                          
                                                                                                                                
Representative Nelson  informed the Committee that  there was                                                                   
a change in the bill to include hair crab fisheries.                                                                            
                                                                                                                                
FRANK   HOMAN,  COMMISSIONER,   COMMERCIAL  FISHERIES   ENTRY                                                                   
COMMISSION, offered  to provide additional  information about                                                                   
the bill.                                                                                                                       
                                                                                                                                
Representative Nelson reported  that the addition to the bill                                                                   
would extend  the life of the  hair crab fisheries  along the                                                                   
west coast of Alaska.   Mr. Homan said that was  correct.  In                                                                   
addition,  it  extends  the  scallop   fisheries.    The  two                                                                   
fisheries are  unique in that  they are vessel  based license                                                                   
systems.                                                                                                                        
                                                                                                                                
Representative  Nelson said her  understanding is  that those                                                                   
two fisheries alone have 4 out  of 18 permit holders that are                                                                   
owned  by Community  Development  Quota  (CDQ)  groups.   Mr.                                                                   
Homen thought that was correct.                                                                                                 
                                                                                                                                
Representative  Nelson  asked how  many  permit holders  from                                                                   
Alaska are in the limited entry  system.  Mr. Homen responded                                                                   
that  there are  about 15,000  limited entry  permits and  78                                                                   
percent  are from  Alaska.   Representative  Nelson asked  if                                                                   
there were about 10,000.  Mr.  Homan thought it was more like                                                                   
11,000.                                                                                                                         
                                                                                                                                
Representative Nelson estimated  that from the two CDQ's that                                                                   
are  owners in  the  hair crab  and scallops  fisheries,  the                                                                   
Coastal Village Region  Fund has about 20 villages  and about                                                                   
9,000 people, and  Norton Sound has fewer villages  but about                                                                   
8,500 people.  Just in those 4  permit holders, the owners of                                                                   
the  permits total  about 17,000  residents of  Alaska.   She                                                                   
stated that the  CDQ's are not Native programs.   She saw the                                                                   
CDQ's  with  their community  shareholders  as  positive  for                                                                   
communities.                                                                                                                    
                                                                                                                                
4:47:21 PM                                                                                                                    
                                                                                                                                
Representative  Thomas   asked  how  corporations   can  hold                                                                   
permits when  it is prohibited  throughout the  whole limited                                                                   
entry permit  system.  Mr.  Homan clarified that  the vessel-                                                                   
based program is  unique.  In 2002, the legislature  passed a                                                                   
bill allowing  the two fisheries  to have different  systems.                                                                   
The  limited entry  system  was  designed around  the  salmon                                                                   
fisheries  with an  individual owner.   Vessel-based  limited                                                                   
entry  fisheries are  managed  differently.   They are  large                                                                   
boats  with multiple  crews and  skippers.   The  traditional                                                                   
method could  not be used.   Sometimes the vessels  are owned                                                                   
by corporations made  up by two or three individuals,  due to                                                                   
the  expense  of getting  into  these  two fisheries.    They                                                                   
require  a  different  financial  structure.    There  is  no                                                                   
intention  of moving  the vessel-based  system  to any  other                                                                   
fishery.                                                                                                                        
                                                                                                                                
Representative Thomas thought  the doors would be opened when                                                                   
the rules change.   He voiced concern about the  process.  He                                                                   
related that he  fought the limited entry program  so that no                                                                   
corporation would  ever own the  permits.  Mr.  Homan related                                                                   
that  the legislature  in  2002 made  that  allowance and  it                                                                   
would  require  legislation  to change  it.    Representative                                                                   
Thomas reiterated  his concerns.  He suggested  consolidating                                                                   
or  releasing more  permits.    He said  the  usual route  is                                                                   
through the Board of Fish.                                                                                                      
                                                                                                                                
Mr.  Homan  recalled   that  in  2002  the   legislature  did                                                                   
recognize  consolidation.   No  vessel owner  could own  more                                                                   
than two permits.                                                                                                               
                                                                                                                                
4:53:21 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Stoltze pointed  out that  the bill would  extend                                                                   
the  termination   date  of  the  Alaska   Regional  Economic                                                                   
Assistance Program.                                                                                                             
                                                                                                                                
Representative  Nelson  said  in addition  to  extending  the                                                                   
termination  date, there  are  18 hair  crab  permits and  19                                                                   
scallop  permits.   In the  18  crab permits,  there are  250                                                                   
quota holders.   She inquired if the fishery  were abolished,                                                                   
if all of  those quota holders  would be able to come  in and                                                                   
fish that resource.  Mr. Homan  confirmed that to be true for                                                                   
both   fisheries;  both   would   return   to  open   access.                                                                   
Representative Nelson  said that is of great  concern because                                                                   
of the potential  loss of revenue to Alaskan  permit holders.                                                                   
Representative  Nelson  commented that  the  fishery is  also                                                                   
needed to  prevent over  fishing.  Mr.  Homan added  that the                                                                   
resource is  fragile and  the fishery very  small.  If  it is                                                                   
opened  to unlimited harvest,  restrictions  will need  to be                                                                   
applied.                                                                                                                        
                                                                                                                                
Representative  Nelson asked if  the other 14  permit holders                                                                   
are from across  the state, in addition to the  4 CDQ's.  Mr.                                                                   
Homan  replied that  it is  a  mixture of  Alaskans and  non-                                                                   
residents.   Representative Nelson thought there  were permit                                                                   
holders from  Southeast Alaska as  well as from  the Interior                                                                   
and South Central Alaska.  Mr. Homan said that was correct.                                                                     
                                                                                                                                
4:57:05 PM                                                                                                                    
                                                                                                                                
Representative  Gara asked  for  an explanation  of the  hair                                                                   
crab and scallop fisheries.  Mr.  Homan explained the history                                                                   
of the two  fisheries.  The  Department of Fish and  Game put                                                                   
restrictions  on the fisheries,  requiring a vessel  license,                                                                   
in 2002.                                                                                                                        
                                                                                                                                
Representative  Gara asked  how  long the  extension is  for.                                                                   
Mr. Homan said  5 years.  Representative Gara  asked if, when                                                                   
it lapses,  it becomes  a permit  fishery again.   Mr.  Homan                                                                   
explained  that  the  sunset  allows  revisiting  the  issue.                                                                   
Representative Gara asked if the  bill would limit additional                                                                   
vessels.   Mr.  Homan  said that  is  correct.   He  recalled                                                                   
testimony by Fish  and Game that regulation  of the fisheries                                                                   
would be increased if the bill does not pass.                                                                                   
                                                                                                                                
5:01:11 PM                                                                                                                    
                                                                                                                                
Representative Thomas  recalled during the time  of statehood                                                                   
and the  intent to  abolish fish  traps owned by  non-Alaskan                                                                   
corporations  back then.   Limited entry  was developed  very                                                                   
carefully to  ensure that corporations  were not able  to own                                                                   
permits.                                                                                                                        
                                                                                                                                
Representative  Nelson thought  that  if there  was open  and                                                                   
unlimited  access   to  the  fisheries,  it   would  be  more                                                                   
expensive to manage  them.  She reported that  there was also                                                                   
a  possibility that  they  would be  managed  by the  federal                                                                   
government.  One  of the purposes of statehood  was to ensure                                                                   
state  management of  fish and  game resources.   Alaska  has                                                                   
already  lost  management  of   resources  on  federal  land.                                                                   
Losing  limited entry  will make  Alaska  vulnerable to  more                                                                   
federal management.                                                                                                             
                                                                                                                                
Mr. Homan  related that  the federal  government also  limits                                                                   
these fisheries  in the  federal fishery  zone; however,  the                                                                   
state manages both fisheries in  all waters.  If it goes back                                                                   
to  open  access  there  would  be  two  management  systems.                                                                   
Representative  Nelson noted  support for  the bill  from the                                                                   
Department  of Fish  and Game  and from  United Fishermen  of                                                                   
Alaska.  North Pacific Management  Council and the Commercial                                                                   
Fisheries   Entry  Commission   (CFEC)   also  support   this                                                                   
legislation.     Mr.  Homan  concurred  that   all  prominent                                                                   
fisheries support the bill.                                                                                                     
                                                                                                                                
Representative  Kelly asked if  the sunset date  was expected                                                                   
to be extended.   Mr. Homan said  it was, and he  related the                                                                   
history  of another  bill  that was  supposed  to extend  the                                                                   
termination date, but failed.   Representative Kelly asked if                                                                   
everyone in the  area supports the bill.  Mr.  Homan reported                                                                   
that it  is generally  supported.   A few  oppose it  because                                                                   
they  think it  is  going to  do something  else.   They  are                                                                   
uneasy with  consolidation.  Representative Kelly  asked what                                                                   
would happen to protect the resource  if it was not extended.                                                                   
Mr. Homan replied that Department  of Fish and Game said they                                                                   
would  initiate  more  restrictive policies  toward  the  two                                                                   
fisheries.   He  said the  Commission  would not  be able  to                                                                   
extend any limitation if the bill does not pass.                                                                                
                                                                                                                                
5:09:05 PM                                                                                                                    
                                                                                                                                
Vice-Chair Stoltze  wondered if  a five-year sunset  was long                                                                   
enough  or  if a  sunset  was  even needed.    Representative                                                                   
Nelson thought  a sunset was not  needed.  She noted  that it                                                                   
has been  proven that  the resources  are rebounding  and the                                                                   
fisheries  are bringing  dollars  to Alaska's  coffers.   She                                                                   
worried that  a new  chairman of  fisheries might change  the                                                                   
termination date of the sunset in the future.                                                                                   
                                                                                                                                
Mr. Homan  related that  the original  intention of  the bill                                                                   
was to not have a sunset date.                                                                                                  
                                                                                                                                
Representative  Gara  thought  the  conservation  aspect  was                                                                   
working.                                                                                                                        
                                                                                                                                
Representative  Thomas said  he does  not like  the bill  but                                                                   
also did not think it needed a sunset.                                                                                          
                                                                                                                                
Vice-Chair  Stoltze   noted  the  title  restrictions.     He                                                                   
suggested a 10-year extension.                                                                                                  
                                                                                                                                
5:14:05 PM                                                                                                                    
                                                                                                                                
Representative Kelly said he was  uncomfortable with changing                                                                   
the sunset date, but liked the bill.                                                                                            
                                                                                                                                
Representative  Gara  thought there  was  not  a good  option                                                                   
surrounding the sunset issue.   He did not think that getting                                                                   
rid of the sunset was any worse a solution.                                                                                     
                                                                                                                                
Vice-Chair  Stoltze said  eliminating  the sunset  is not  an                                                                   
option in this  bill.  Representative Kelly  thought he could                                                                   
agree to the 10-year option.                                                                                                    
                                                                                                                                
5:16:40 PM                                                                                                                    
                                                                                                                                
Vice-Chair Stoltze  MOVED to ADOPT Conceptual  Amendment 1 to                                                                   
extend the vessel permit portion of the bill to 2018.                                                                           
                                                                                                                                
Representative  Hawker  OBJECTED.    He  clarified  that  the                                                                   
amendment would apply to Section 2 of the bill.                                                                                 
                                                                                                                                
Representative Gara  requested that Representative  Nelson be                                                                   
added as  a sponsor of the  bill.  Representative  Nelson was                                                                   
added as a sponsor.                                                                                                             
                                                                                                                                
Representative  Hawker WITHDREW  his OBJECTION to  Conceptual                                                                   
Amendment 1.  There being NO OBJECTION, it was so ordered.                                                                      
                                                                                                                                
Co-Chair  Chenault reviewed  the fiscal  notes.   He noted  a                                                                   
need for  a new fiscal note  from the Department of  Fish and                                                                   
Game.                                                                                                                           
                                                                                                                                
Mr. Homan  said a  new zero fiscal  note from the  Commercial                                                                   
Fisheries Entry Commission would be forthcoming.                                                                                
                                                                                                                                
5:20:19 PM                                                                                                                    
                                                                                                                                
Representative  Foster MOVED  to REPORT  HCS SB 254(FIN),  as                                                                   
amended, out of Committee with  individual recommendations, a                                                                   
title change  resolution, and the accompanying  fiscal notes.                                                                   
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
HCS SB  254(FIN) was  REPORTED  out of Committee  with  a "do                                                                   
pass" recommendation,  a title change resolution,  a new zero                                                                   
fiscal note by the Department  of Fish and Game, and with two                                                                   
previously  published  fiscal  notes  by  the  Department  of                                                                   
Commerce, Community and Economic Development.                                                                                   
                                                                                                                                
AT-EASE:       5:21:41 PM                                                                                                     
                                                                                                                                
RECONVENED:    5:37:28 PM                                                                                                     
                                                                                                                                
HOUSE BILL NO. 314                                                                                                            
                                                                                                                                
     "An Act  providing for and  relating to the  issuance of                                                                   
     general obligation  bonds for the purpose  of paying the                                                                   
     cost  of state  transportation  projects; and  providing                                                                   
     for an effective date."                                                                                                    
                                                                                                                                
Representative Thomas  MOVED to ADOPT CSHB  314(FIN), labeled                                                                   
25-GH2041\M,  Cook,  4/5/08, as  the  work draft  before  the                                                                   
Committee.  There being NO OBJECTION, it was so ordered.                                                                        
                                                                                                                                
PETE ECKLUND,  STAFF, REPRESENTATIVE  KEVIN MEYER,  discussed                                                                   
the changes in  the bill.  He referred to a  handout entitled                                                                   
"Project Title", which describes  the changes (copy on file.)                                                                   
The new  total for the G.O  Bonds bill is $220,600,000.   Mr.                                                                   
Ecklund listed those projects added to the bill.                                                                                
                                                                                                                                
5:40:44 PM                                                                                                                    
                                                                                                                                
Mr. Ecklund listed the three items removed from the bill.                                                                       
                                                                                                                                
Co-Chair Meyer  asked if  the Gravina  Access was removed  in                                                                   
the Transportation  Committee meeting.   Mr. Ecklund  replied                                                                   
that was correct.   Co-Chair Meyer asked if  the South Denali                                                                   
Access Road project  was removed by the Senate.   Mr. Ecklund                                                                   
said it  was in  the Senate  version of  the capital  budget.                                                                   
Co-Chair Meyer reported that it  was agreed that the Northern                                                                   
Access Study should not be included in a bond package.                                                                          
                                                                                                                                
Representative Gara  asked if the Gravina Access  project was                                                                   
included somewhere else.  Co-Chair  Meyer said it was totally                                                                   
removed.                                                                                                                        
                                                                                                                                
Representative  Crawford asked about  the grant to  Anchorage                                                                   
                                                 th                                                                             
for  the  Victor  Road-Dimond  Boulevard  to  100   Avenue  -                                                                   
upgrade and  trade. Co-Chair Meyer  explained that  there are                                                                   
about 7 or 8  state roads in Anchorage that  are neighborhood                                                                   
roads now.   The City  of Anchorage has  agreed to  take over                                                                   
these  roads.     Representative  Crawford  asked   what  the                                                                   
tradeoff was.  Co-Chair Meyer  said the state would spend $14                                                                   
million  to upgrade  the roads  and the  city would  maintain                                                                   
them.                                                                                                                           
                                                                                                                                
5:44:29 PM                                                                                                                    
                                                                                                                                
Vice-Chair Stoltze  added that in 1990 two roads  in his area                                                                   
had a similar arrangement.                                                                                                      
                                                                                                                                
Representative  Thomas  noted $10  million  for  the Port  of                                                                   
Anchorage,  which  had been  twice  vetoed.   Co-Chair  Meyer                                                                   
explained that the  Governor felt that the project  should be                                                                   
in a road bond.                                                                                                                 
                                                                                                                                
Representative  Gara wondered what  would happen to  the Port                                                                   
of Anchorage  if it was not  funded with $10 million  in G.O.                                                                   
Bonds.  Co-Chair Meyer thought  municipal money should not go                                                                   
to this project because it is  a state project.  He requested                                                                   
testimony from  the Department  of Transportation  and Public                                                                   
Facilities.                                                                                                                     
                                                                                                                                
5:47:27 PM                                                                                                                    
                                                                                                                                
FRANK  RICHARDS, DEPUTY  COMMISSIONER  OF  HIGHWAYS &  PUBLIC                                                                   
FACILITIES,   DEPARTMENT   OF   TRANSPORTATION   AND   PUBLIC                                                                   
FACILITIES,  reported  that in  conversations  with  Governor                                                                   
Sheffield,  it was  noted  that there  were  needs for  state                                                                   
funds in  order to continue  with necessary expansions.   The                                                                   
state is  involved because the  vast majority of  cargo comes                                                                   
into this port.                                                                                                                 
                                                                                                                                
Representative  Gara said  he was just  questioning  the need                                                                   
for state money; he was not criticizing the project.                                                                            
                                                                                                                                
5:51:12 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer MOVED to ADOPT Amendment 1:                                                                                      
                                                                                                                                
     Page 2, Line 31                                                                                                            
     Delete: Access Road to Evacuation Center and                                                                               
     Insert: Access Road, Evacuation Center and                                                                                 
                                                                                                                                
     Page 3, Line 7                                                                                                             
     Delete: Shelter Cove Road                                                                                                  
     Insert: Shelter Cove, Road Construction                                                                                    
                                                                                                                                
     Page 4, Line 21                                                                                                            
     Delete: $220,000,000                                                                                                       
     Insert: $220,600,000                                                                                                       
                                                                                                                                
Vice-Chair Stoltze OBJECTED.                                                                                                    
                                                                                                                                
Mr.   Ecklund  explained   the  technical   changes  in   the                                                                   
amendment.                                                                                                                      
                                                                                                                                
Representative Hawker  MOVED to ADOPT Conceptual  Amendment 1                                                                   
to Amendment  1, to make  the same change  on line 24,  as on                                                                   
line 21.   There being NO OBJECTION, it was so ordered.                                                                         
                                                                                                                                
Vice-Chair Stoltze WITHDREW his  OBJECTION to adopt Amendment                                                                   
1.   There being NO  OBJECTION, Amendment  1 was  adopted, as                                                                   
amended.                                                                                                                        
                                                                                                                                
5:53:19 PM                                                                                                                    
                                                                                                                                
Representative Joule MOVED to ADOPT Amendment 2:                                                                                
                                                                                                                                
     Page 1, line 9:                                                                                                            
     Delete "$220,600,000" and insert "234,600,000"                                                                             
                                                                                                                                
     Page 2, line 10:                                                                                                           
     Delete "$196,600,000" and insert "210,600,000"                                                                             
                                                                                                                                
     Page 2, line 14, insert:                                                                                                   
     "Aleknagik Wood River Bridge $14,000,000"                                                                                  
                                                                                                                                
     Page 4, line 21:                                                                                                           
     Delete "$220,000,000" and replace with "$234,000,000"                                                                      
                                                                                                                                
     Page 4, line 24:                                                                                                           
     Delete "$220,000,000" and replace with "$234,000,000"                                                                      
                                                                                                                                
Vice-Chair Stoltze OBJECTED.                                                                                                    
                                                                                                                                
REPRESENTATIVE  BRYCE EDGMON, explained  that Amendment  2 is                                                                   
also a  technical  amendment.   It proposes  to fully fund  a                                                                   
bridge  that would  connect  the north  and  south shores  of                                                                   
Aleknagik.                                                                                                                      
                                                                                                                                
Co-Chair  Meyer  asked if  $14  million  is the  total  cost.                                                                   
Representative Edmonds  clarified that the total  cost is $22                                                                   
million.                                                                                                                        
                                                                                                                                
Co-Chair Chenault  asked if this  project is near  Dillingham                                                                   
or Naknek.   Mr. Edgmon explained  that it was 30  miles away                                                                   
from Dillingham.                                                                                                                
                                                                                                                                
5:55:49 PM                                                                                                                    
                                                                                                                                
ADAM  BERG,  STAFF, REPRESENTATIVE  BRYCE  EDGMON,  explained                                                                   
that the bridge has $2.2 million  in funding already secured.                                                                   
The requested  amount would complete  the project.   Co-Chair                                                                   
Meyer and Vice-Chair Stoltze recalled visiting the site.                                                                        
                                                                                                                                
5:56:59 PM                                                                                                                    
                                                                                                                                
Representative  Crawford  asked  for  information  about  the                                                                   
bridge.  Representative Edgmon  said it was a vehicle bridge.                                                                   
He  explained why  it  was needed  to  transport children  to                                                                   
school.                                                                                                                         
                                                                                                                                
Vice-Chair   Stoltze   asked   if   a   mineral   development                                                                   
controversy  was involved.   Mr. Edgmon  replied that  it was                                                                   
not.                                                                                                                            
                                                                                                                                
Representative  Nelson  recalled that  the  request has  been                                                                   
around for  a number of years.   She spoke in support  of the                                                                   
bill for various reasons.                                                                                                       
                                                                                                                                
Representative  Gara agreed that  the bridge has  been needed                                                                   
for  years.   Representative Edgmon  related further  reasons                                                                   
for the need for a bridge.                                                                                                      
                                                                                                                                
6:00:48 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer  noted the  attempt to seek  a balance  in the                                                                   
G.O. Bond package.  He asked the  Committee not to accept the                                                                   
amendment.   Representative  Edgmon deferred  to the  will of                                                                   
the Committee.                                                                                                                  
                                                                                                                                
Representative Joule WITHDREW Amendment 2.                                                                                      
                                                                                                                                
Representative Joule MOVED to ADOPT Amendment 3:                                                                                
                                                                                                                                
     Page 1, line 9:                                                                                                            
     Delete "$220,600,000" and replace with "$223,100,000"                                                                      
                                                                                                                                
     Page 2, line 10:                                                                                                           
     Delete $196,600,000" and replace with "$199,100,000"                                                                       
                                                                                                                                
     Page 2, line 18, add:                                                                                                      
     "Port of Bristol Bay Dock Expansion/Repair $2,500,000"                                                                     
                                                                                                                                
     Page 4, line 21:                                                                                                           
     Delete "$220,000,000" and replace with "$222,500,000"                                                                      
                                                                                                                                
     Page 4, line 24:                                                                                                           
     Delete "$220,000,000" and replace with "$222,500,000"                                                                      
                                                                                                                                
Vice-Chair Stoltze OBJECTED.                                                                                                    
                                                                                                                                
Representative  Edgmon explained the  amendment is  for money                                                                   
that would  be used to help  fully fund the expansion  of the                                                                   
Bristol Bay dock.                                                                                                               
                                                                                                                                
Co-Chair Meyer  said there  was money  in the capital  budget                                                                   
for  this  project.   Mr.  Ecklund  agreed.   Co-Chair  Meyer                                                                   
preferred to not have this item in the bond package.                                                                            
                                                                                                                                
Representative Joule WITHDREW Amendment 3.                                                                                      
                                                                                                                                
6:05:28 PM                                                                                                                    
                                                                                                                                
Representative Thomas asked if  the Dalton Highway project is                                                                   
in the  capital budget.  Co-Chair  Meyer thought that  it was                                                                   
not  in  the  capital  budget   and  that  the  Governor  had                                                                   
requested it be in a road bond package.                                                                                         
                                                                                                                                
Mr. Richards said there was $4  million in the capital budget                                                                   
for  the Dalton  Highway.    Co-Chair Meyer  summarized  that                                                                   
there was $4 in  the Senate capital budget and  a request for                                                                   
$14 million in the G.O. bond bill.  Mr. Richards concurred.                                                                     
                                                                                                                                
Mr. Richards corrected  that it was a $5 million  project and                                                                   
was removed from the Senate version of the budget.                                                                              
                                                                                                                                
Vice-Chair  Stoltze asked  about  the language  "bikeway"  on                                                                   
page  2, line  30.    Co-Chair Meyer  asked  if  it could  be                                                                   
changed.  Mr.  Richards said the intent is  that improvements                                                                   
outside  of the paved  roadway be  included.   Representative                                                                   
Hawker offered "multi-modal pedestrian facilities".                                                                             
                                                                                                                                
Representative Gara  thought that bikeway was  appropriate as                                                                   
a tourist attraction.                                                                                                           
                                                                                                                                
6:10:50 PM                                                                                                                    
                                                                                                                                
Representative  Gara asked  about the  Ketchikan project  for                                                                   
$10 million: Harriet Hunt Lake to Shelter Cove Road.                                                                            
                                                                                                                                
REPRESENTATIVE  KYLE JOHANSEN,  explained  that  the road  is                                                                   
part of the  Ketchikan Coastal Management Plan.   It has been                                                                   
approved  by the  Forest Legacy  Program,  the Department  of                                                                   
Natural Resources,  the Ketchikan City Council,  Tongass Land                                                                   
Management  Plan, and  the Department  of Transportation  and                                                                   
Public Facilities.   It  is part  of the Ketchikan  Borough's                                                                   
20-20 plan  and has  a multi-use purpose.   It Connects  Cape                                                                   
Fox with  10 miles of  road that will  tie into 100  miles of                                                                   
logging roads.                                                                                                                  
                                                                                                                                
Co-Chair Meyer asked  if it is a state road.   Representative                                                                   
Johansen  reported that  it is  a borough  road and  accesses                                                                   
Mental Health Trust lands.                                                                                                      
                                                                                                                                
AT-EASE:       6:15:38 PM                                                                                                     
                                                                                                                                
RECONVENED:    6:27:58 PM                                                                                                     
                                                                                                                                
Representative  Hawker  noted that  the  project  was on  the                                                                   
Roads to Resources Initiative.                                                                                                  
                                                                                                                                
Co-Chair Meyer  asked about the Department of  Revenue fiscal                                                                   
note.                                                                                                                           
                                                                                                                                
JERRY   BURNETT,   DIRECTOR,   DIVISION   OF   ADMINISTRATIVE                                                                   
SERVICES, DEPARTMENT  OF REVENUE,  said the department  would                                                                   
provide the  Committee with a  debt service fiscal  note with                                                                   
annual payments of about $17, 254, 046.30.                                                                                      
                                                                                                                                
Representative  Foster MOVED to  REPORT CSHB 314(FIN)  out of                                                                   
Committee,  as amended, with  individual recommendations  and                                                                   
the accompanying fiscal notes.   There being NO OBJECTION, it                                                                   
was so ordered.                                                                                                                 
                                                                                                                                
CSHB 314(FIN) was REPORTED out  of Committee with a "do pass"                                                                   
recommendation and  with fiscal note #1 by the  Office of the                                                                   
Governor and a new fiscal note  by the Department of Revenue.                                                                   
                                                                                                                                
6:32:38 PM                                                                                                                    
                                                                                                                                
HOUSE BILL NO. 106                                                                                                            
                                                                                                                                
     "An  Act  repealing fees  imposed  on  the sale  of  new                                                                   
     tires,  the  sale  of certain  studded  tires,  and  the                                                                   
     installation  of  certain  metal  studs  on  tires;  and                                                                   
     providing for an effective date."                                                                                          
                                                                                                                                
JOHANNA BALES,  DEPUTY DIRECTOR, TAX DIVISION,  DEPARTMENT OF                                                                   
REVENUE, explained  the bill repeals the fees  imposed on the                                                                   
sale of new  and studded tires.   She said it is  a deterrent                                                                   
to  those  who  would  not replace  old,  worn  tires.    The                                                                   
Administration  does not  believe  that the  tire  fee is  an                                                                   
efficient  way to  raise money  and  acts as  a deterrent  to                                                                   
those who should replace old or worn tires.                                                                                     
                                                                                                                                
Ms. Bales  pointed out  that the  fiscal note should  address                                                                   
the repeal  this year instead  of last year.   Co-Chair Meyer                                                                   
said that change would be made by amendment.                                                                                    
                                                                                                                                
Vice-Chair Stoltze  commented on needing to  replace money in                                                                   
the budget for the Glenn Highway.                                                                                               
                                                                                                                                
6:36:01 PM                                                                                                                    
                                                                                                                                
Co-Chair Chenault  asked what the annual income  has been for                                                                   
this  legislation  since  2003.    Ms.  Bales  reported  that                                                                   
approximately  $1.5 million  has  been collected  each  year.                                                                   
Co-Chair  Chenault  related  that  in  FY 08  the  fees  were                                                                   
expected  to  bring  in  $3.3 million  to  $5  million,  when                                                                   
actually  it was $1.184  million.   He asked  why that  might                                                                   
have been.   Ms.  Bales said  it was  a combination  of over-                                                                   
estimating  the number  of tires  sold and  a change in  what                                                                   
kind of tires were purchased.                                                                                                   
                                                                                                                                
Co-Chair  Chenault noted  in 2003 the  fiscal note  estimated                                                                   
that it would  cost $53,000 a year to implement  the program.                                                                   
The current fiscal note shows a greater cost.                                                                                   
                                                                                                                                
6:39:56 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer MOVED to ADOPT  Amendment 1 to change the date                                                                   
on page 1, line 1, from July 1, 2007, to July 1, 2008.                                                                          
                                                                                                                                
Co-Chair Chenault OBJECTED.                                                                                                     
                                                                                                                                
Co-Chair   Chenault  asked   if  the   amendment  fixes   the                                                                   
department's concern.  Ms. Bales said it did.                                                                                   
                                                                                                                                
Co-Chair  Chenault WITHDREW  his  OBJECTION.  There being  NO                                                                   
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
6:41:14 PM                                                                                                                    
                                                                                                                                
Representative  Foster MOVED to  REPORT CSHB 106(FIN)  out of                                                                   
Committee   with    individual   recommendations    and   the                                                                   
accompanying fiscal  note.  There being NO  OBJECTION, it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
CSHB 10  106(FIN) was  REPORTED out of  Committee with  a "do                                                                   
pass"  recommendation and  with  previously published  fiscal                                                                   
note #2 by the Department of Revenue.                                                                                           
                                                                                                                                
Representative  Thomas  thought   that  arbitrage  should  be                                                                   
halted.   No one  should be  able to  borrow state  money and                                                                   
profit from it.                                                                                                                 
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 6:42 PM.                                                                                           

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