Legislature(1999 - 2000)

04/19/2000 02:00 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
HOUSE FINANCE COMMITTEE                                                                                                         
April 19, 2000                                                                                                                  
2:00 P.M.                                                                                                                       
                                                                                                                                
TAPE HFC 00 - 127, Side 1                                                                                                       
TAPE HFC 00 - 127, Side 2                                                                                                       
TAPE HFC 00 - 128, Side 1                                                                                                       
TAPE HFC 00 - 128, Side 2                                                                                                       
TAPE HFC 00 - 129, Side 1                                                                                                       
                                                                                                                                
CALL TO ORDER                                                                                                                   
                                                                                                                                
Co-Chair Therriault called the House Finance Committee                                                                          
meeting to order at 2:00 p.m.                                                                                                   
                                                                                                                                
PRESENT                                                                                                                         
                                                                                                                                
Co-Chair Mulder                                                                                                                 
Co-Chair Therriault    Representative Foster                                                                                    
Vice Chair Bunde   Representative Grussendorf                                                                                   
Representative Austerman   Representative Moses                                                                                 
Representative J. Davies   Representative Phillips                                                                              
Representative G. Davis   Representative Williams                                                                               
                                                                                                                                
ALSO PRESENT                                                                                                                    
                                                                                                                                
Senator Gary Wilken; Nanci Jones, Permanent Fund Division;                                                                      
Shirley Dean, Child Support Enforcement Division; Robert                                                                        
Buttcane, Department of Health and Social Services; Jane                                                                        
Demmert, Executive Director, Alaska Commission on Aging;                                                                        
Dick Bishop, Alaska Outdoor Council; Kara Moriarty, Staff,                                                                      
Senator Wilken; Mike Tibbles, Staff, Representative                                                                             
Therriault; Joe Dubler, Senior Finance Officer, Alaska                                                                          
Housing Finance Corporation (AHFC), Department of Revenue;                                                                      
Annalee McConnell, Director, Office of Management and                                                                           
Budget, Office of the Governor; Barbara Miklos, Director,                                                                       
Child Support Enforcement Division, Department of Revenue;                                                                      
Joe Balash, Staff, Representative Therriault; Kevin Brooks,                                                                     
Director, Division of Administrative Services, Department of                                                                    
Fish and Game; Bill Stolz. Staff, Senator Halford; John                                                                         
Bitney, Legislative Liaison, Alaska Housing Finance                                                                             
Corporation, Department of Revenue; Devon Mitchell,                                                                             
Executive Director, Alaska Municipal Bond Bank Authority,                                                                       
Department of Revenue; George Utermohle, Legal Counsel,                                                                         
Legislative Affairs Agency.                                                                                                     
                                                                                                                                
TESTIFIED VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Monte Faye Lane, Fairbanks; Kevin Delaney, Department of                                                                        
Fish and Game; Stan Bloom, Fairbanks; Allen Barrette,                                                                           
Fairbanks; Lisa Harbo, Fairbanks; Mark Hem, Fairbanks; Greg                                                                     
Machacek, Fairbanks; Tom Scarborough, Fairbanks; Joseph                                                                         
Hart, AHTNA, Glennallen; Robert Buttcane, Department of                                                                         
Health and Social Services; Jon Sherwood, Kenai, Division of                                                                    
Medical Assistance, Department of Health and Social                                                                             
Services; Diane Wendlandt, Assistant Attorney General,                                                                          
Department of Law.                                                                                                              
                                                                                                                                
SUMMARY                                                                                                                         
                                                                                                                                
HB 281 "An Act providing for the issuance of general                                                                            
obligation bonds in the amount of $665,000,000 for                                                                              
the purposes of paying the cost of design,                                                                                      
construction, and renovation of public elementary                                                                               
and secondary schools, renovation of state                                                                                      
buildings, capital improvements at the University                                                                               
of Alaska, and capital improvements to state                                                                                    
harbors; and providing for an effective date."                                                                                  
                                                                                                                                
CSHB 281 (FIN) was REPORTED out of Committee with                                                                               
a "do pass" recommendation and with a "do pass"                                                                                 
recommendation and with a new fiscal impact note                                                                                
by the Department of Revenue.                                                                                                   
                                                                                                                                
HB 287 "An Act making and amending capital appropriations                                                                       
and reappropriations and capitalizing funds; and                                                                                
providing for an effective date."                                                                                               
                                                                                                                                
 CSHB 287 (FIN) was REPORTED out of Committee with                                                                              
a "do pass" recommendation.                                                                                                     
                                                                                                                                
CSSB 4(FIN)                                                                                                                     
"An Act relating to victims' rights; relating to                                                                                
establishing an office of victims' rights;                                                                                      
relating to compensation of victims of violent                                                                                  
crimes; relating to eligibility for a permanent                                                                                 
fund dividend for persons convicted of and                                                                                      
incarcerated for certain offenses; relating to                                                                                  
notice of appropriations concerning victims'                                                                                    
rights; and amending Rule 16, Alaska Rules of                                                                                   
Criminal Procedure, Rule 9, Alaska Delinquency                                                                                  
Rules, and Rule 501, Alaska Rules of Evidence; and                                                                              
providing for an effective date."                                                                                               
                                                                                                                                
CSSB 4(FIN) was heard and HELD in Committee for                                                                                 
further consideration.                                                                                                          
                                                                                                                                
CSSB 73(FIN)                                                                                                                    
"An Act relating to assisted living homes; and                                                                                  
providing for an effective date."                                                                                               
                                                                                                                                
CSSB 73(FIN) was heard and HELD in Committee for                                                                                
further consideration.                                                                                                          
                                                                                                                                
CSSB 204 (FIN)                                                                                                                  
 "An Act extending the termination date of the                                                                                  
Alaska Commission on Aging; and providing for an                                                                                
effective date."                                                                                                                
                                                                                                                                
HCS CSSB 204 (FIN) was REPORTED out of Committee                                                                                
with a "do pass" recommendation and with a new                                                                                  
fiscal impact note by the Department of                                                                                         
Administration.                                                                                                                 
                                                                                                                                
SB 207 "An Act relating to the establishment and                                                                                
enforcement of medical support orders for                                                                                       
children; and providing for an effective date."                                                                                 
                                                                                                                                
 SB 207 was REPORTED out of Committee with a "do                                                                                
pass" recommendation and with a zero fiscal note                                                                                
by the Department of Revenue, published 1/20/00.                                                                                
                                                                                                                                
CSSB 301(FIN)                                                                                                                   
"An Act relating to the Chitina dip net fishing                                                                                 
permit; and providing for an effective date."                                                                                   
                                                                                                                                
HCS CSSB 301(FIN) was REPORTED out of Committee                                                                                 
with a "do pass" recommendation and with a new                                                                                  
fiscal impact note by the Department of Fish and                                                                                
Game.                                                                                                                           
CS FOR SENATE BILL NO. 73(FIN)                                                                                                  
                                                                                                                                
"An Act relating to assisted living homes; and                                                                                  
providing for an effective date."                                                                                               
                                                                                                                                
MONTE FAYE LANE, FAIRBANKS testified via teleconference in                                                                      
support of SB 73. She noted that the situation is grave.                                                                        
Assisted living home providers are trying to survive                                                                            
financially and to stay in business. Care is given 24 hours                                                                     
a day. The hourly rate paid by the state is only $2 dollars                                                                     
an hour. The rate paid by the state is below the minimal                                                                        
wage and is not sufficient for financial survival. This                                                                         
results in a great number of persons housed in full nursing                                                                     
facilities.                                                                                                                     
                                                                                                                                
Co-Chair Therriault noted that the intent is to pass the                                                                        
legislation once funding for the fiscal note is resolved.                                                                       
                                                                                                                                
CSSB 73 (FIN) was heard and HELD in Committee for further                                                                       
consideration.                                                                                                                  
CS FOR SENATE BILL NO. 301(FIN)                                                                                                 
                                                                                                                                
"An Act relating to the Chitina dip net fishing permit;                                                                         
and providing for an effective date."                                                                                           
                                                                                                                                
Co-Chair Therriault provided members with a proposed                                                                            
committee substitute, work draft 1-LS1516\S, dated 4/19/00                                                                      
(copy on file).                                                                                                                 
                                                                                                                                
SENATOR WILKEN, SPONSOR testified in support of CSSB                                                                            
301(FIN). The Chitina fishery is one of the largest in the                                                                      
state. Over 10,000 household permits are issued each year,                                                                      
with approximately 20,000 - 30,000 Alaskan residents                                                                            
participating. Last year approximately 118,000 salmon were                                                                      
harvested. In Dec. 1999, the Alaska Board of Fisheries                                                                          
reclassified the Chitina Personal Use fishery to a                                                                              
Subsistence fishery. The designation of the dip net fishery                                                                     
as subsistence will have little impact on the way the                                                                           
fishery is managed and has little to do with the need to                                                                        
secure public access and provide services. Regulations                                                                          
governing the Chitina Fishery require people to have a                                                                          
permit issued by the Department in their possession. This                                                                       
permit serves as the harvest record.                                                                                            
                                                                                                                                
AS 10.05.340 (a) (22) sets a fee for a "Chitina Personal                                                                        
Use Dip net Permit" at $10. This fee has been in place since                                                                    
1990. Proceeds from this fee go the fish and game fund and                                                                      
have been used to pay Chitina & Ahtna Native Corporations                                                                       
for access across their lands and for outhouse and garbage                                                                      
services. An agreement between the Department of Fish and                                                                       
Game and the Corporations determines the percentage                                                                             
distribution and services.                                                                                                      
                                                                                                                                
Senate Bill 301 amends the existing statute by renaming the                                                                     
"Chitina Personal Use Salmon Dip Net" fishing permit to the                                                                     
"Chitina Dip Net" fishing permit, and increases the permit                                                                      
fee from $10 to $25 dollars. It changes the name of the                                                                         
permit to remove the words "personal use", as it is no                                                                          
longer a "personal use" fishery. The legislation changes the                                                                    
fee to coincide with the new agreement reached between the                                                                      
Corporations and the Department of Fish and Game. This new                                                                      
agreement is intended to provide for maximum legal public                                                                       
access to the dip net fishery while minimizing conflicts                                                                        
between the private landowners and the fishermen at Chitina.                                                                    
The legislation was amended in the Senate to exempt senior                                                                      
citizens.                                                                                                                       
                                                                                                                                
Senator Wilken observed that private property owners are                                                                        
impacted by dip netters crossing their land to access the                                                                       
river. The legislation is an attempt to negotiate a                                                                             
settlement between corporations, private landowners and the                                                                     
state to resolve conflicts of private property and signs and                                                                    
fences.                                                                                                                         
                                                                                                                                
In 2000, dip netters will pay $25 for their permit. Since                                                                       
the fishery is now designated a subsistence fishery there is                                                                    
no requirement for a sport-fishing license to fish there. In                                                                    
1999, people were required to have a $15 dollar sport                                                                           
fishing license and the $10 dollar Chitina permit, for a                                                                        
total expense of $25 dollars. Under this plan, only the                                                                         
proposed $25 dollar Chitina permit will be required.                                                                            
                                                                                                                                
Since the Chitina permit is a household permit, families                                                                        
could save under this plan. For example a family of two                                                                         
adults paid a total of $40 dollars last year, this year it                                                                      
will only be $25 dollars. Services will be significantly                                                                        
increased and improved over past years. Access to the Native                                                                    
lands is more identified than in previous agreements. The                                                                       
process of obtaining the permit will be available from                                                                          
Department offices in Anchorage, Palmer, Fairbanks,                                                                             
Glennallen and Chitina. This will allow better service to the                                                                   
public, making it easier and faster to obtain the permit, and                                                                   
decreasing the management costs to the Department of Fish &                                                                     
Game.                                                                                                                           
                                                                                                                                
Without a change in the name of the permit, the Department is                                                                   
unable to collect a fee for the permit, because it is not a                                                                     
personal use fishery. Without the permit fee or other                                                                           
provisions, funding for services and access would be                                                                            
unavailable. It is uncertain what the Corporations would do                                                                     
with regard to affecting access to the river, but families                                                                      
going to Chitina this summer could be faced with the                                                                            
potential for conflict.                                                                                                         
                                                                                                                                
Senator Wilkens noted that the legislation is supported by                                                                      
the Alaska Outdoor Council, Alaska Dip Netters Association,                                                                     
and the Fairbanks Fish and Game Advisory Committee.                                                                             
                                                                                                                                
Vice Chair Bunde observed that the revenue collected by the                                                                     
Department of Fish and Game would be reduced. He pointed out                                                                    
that those that are not trespassing would still need                                                                            
permits.                                                                                                                        
                                                                                                                                
Senator Wilken responded that everyone has the opportunity                                                                      
to trespass. He emphasized that he would not have introduced                                                                    
the legislation if he didn't think that private land was                                                                        
being impacted. Boaters fish from the shore, which can be                                                                       
public or private.                                                                                                              
                                                                                                                                
Representative J. Davies spoke in support of the legislation                                                                    
and stressed that there is a problem.                                                                                           
                                                                                                                                
Representative Phillips spoke in support of the legislation                                                                     
and stressed that there is a similar problem in Homer with                                                                      
hunting in the backcountry.                                                                                                     
                                                                                                                                
STAN BLOOM, FAIRBANKS testified via teleconference in                                                                           
support of the legislation. He spoke in support of the                                                                          
intent language adopted by the Senate Finance Committee. He                                                                     
stressed that dip netters pay for their services. He                                                                            
observed that state funding is not available to pay for the                                                                     
services. He felt that the legislation would help to reduce                                                                     
conflicts. He pointed out that 30,000 dip netters impact                                                                        
land owned by Native corporations.                                                                                              
                                                                                                                                
Co-Chair Therriault clarified that Mr. Bloom supports the                                                                       
intent and findings included in the legislation. Mr. Bloom                                                                      
added that money should be appropriated for services. He                                                                        
added that the Department of Transportation and Public                                                                          
Facilities should be involved and included in the intent                                                                        
language.                                                                                                                       
                                                                                                                                
ALLEN BARRETTE, FAIRBANKS testified via teleconference in                                                                       
opposition to CSSB 301(FIN). He noted that the court ruled                                                                      
that there is a 300-foot easement to the river. There is a                                                                      
right-of-way provision included in state law. He maintained                                                                     
that there is plenty of public land available without                                                                           
trespassing. He expressed concern that the legislation would                                                                    
encourage other large property owners to negotiate                                                                              
trespassing taxs with the Department of Fish and Game. He                                                                       
noted that sportsmen and subsistence users use a state trail                                                                    
though his private property. He questioned if the Department                                                                    
of Fish and Game would collect a trespass fee for other                                                                         
areas. He asserted that other groups are not being charged                                                                      
an access fee.                                                                                                                  
                                                                                                                                
LISA HARBO, FAIRBANKS testified via teleconference in                                                                           
opposition to CSSB 301(FIN). She did not feel that she                                                                          
should pay an access fee to the state for fishing on the                                                                        
railroad right-of-way, which belongs to the state. She                                                                          
stressed that the state should establish where public access                                                                    
exists instead of requiring a fee.                                                                                              
                                                                                                                                
MARK HEM, FAIRBANKS testified via teleconference in                                                                             
opposition to the legislation. He pointed out that the                                                                          
Native Corporation is a conglomerate of landowners operating                                                                    
for profit. He suggested that money be set aside to survey                                                                      
the land and determine the problem. He acknowledged that                                                                        
there is no agreement and that there may be problems in                                                                         
Chitina, but emphasized that it is not a good reason to pass                                                                    
a law. He stressed that the state would be guilty of                                                                            
discrimination if it refused an access tax on other private                                                                     
land used to access state land. He noted that the fee was                                                                       
charged 10 years ago, but pointed out that the fishery has                                                                      
increased. He maintained that most people do not know that                                                                      
they are paying a trespass fee, but think they are paying a                                                                     
fishing permit. He asserted that there are objections to                                                                        
paying a fee to a private corporation.                                                                                          
                                                                                                                                
Co-Chair Therriault asked if Mr. Hem had seen the proposed                                                                      
committee substitute, which would provide funding to                                                                            
identify public lands within the Copper River Railroad                                                                          
right-of-way. Mr. Hem responded that he had reviewed the                                                                        
proposed committee substitute. He acknowledged that the                                                                         
proposal is a good attempt to try to reconcile something for                                                                    
the up coming year. He expressed concern that the state                                                                         
would give public money to survey private property. Co-Chair                                                                    
Therriault pointed out that when he surveyed his property                                                                       
that his neighbors also benefited. He stressed that the                                                                         
state's right-of-way is being surveyed. Mr. Hem noted that                                                                      
the corporations are putting forth the allegations of                                                                           
trespass.                                                                                                                       
                                                                                                                                
GREG MACHACEK, FAIRBANKS testified via teleconference in                                                                        
support of the legislation. He recommended that the problem                                                                     
be put to rest. He acknowledged that corporations may                                                                           
benefit from marking the right-of-way, but emphasized that                                                                      
it needs to be addressed. He felt that the fee was on the                                                                       
high end. He maintained that if the legislation does not                                                                        
pass that more people would access the fishery from boats.                                                                      
                                                                                                                                
TOM SCARBOROUGH, FAIRBANKS testified via teleconference. He                                                                     
stressed that the Department of Transportation and Public                                                                       
Facilities is the manager of the right-of-way. He emphasized                                                                    
the need for a physical survey to establish the right-of-                                                                       
way. He felt that the Department of Natural Resources should                                                                    
manage the area as a state campground and that the                                                                              
Department of Fish and Game should manage the fishery. He                                                                       
did not think the legislation is a long-term solution. He                                                                       
estimated that it would take $100 thousand dollars to survey                                                                    
the land and recommended that the state purchase the land,                                                                      
He suggested a sunset clause. He questioned if the current                                                                      
Administration would address the situation.                                                                                     
                                                                                                                                
JOSEPH HART, ATTORNEY, AHTNA, GLENNALLEN testified via                                                                          
teleconference in support of the legislation. He noted that                                                                     
he represents the corporations that negotiated the agreement                                                                    
with the state. He pointed out that the mean high watermark                                                                     
has never been established. The private property owners                                                                         
provided the toilets that are present. He noted that other                                                                      
states require a fee for private property access. He                                                                            
observed that the agreement has been in place for more than                                                                     
ten years. He maintained that money should be put aside to                                                                      
pay for services. He noted that the Native Corporation pays                                                                     
people to pick up trash from those that are using their land                                                                    
to access the fishery. He observed that the corporation owns                                                                    
the land beneath the right-of-way. He maintained that the                                                                       
land is not for sale or trade.                                                                                                  
                                                                                                                                
(TAPE CHANGE, HFC 00 - 127, SIDE 2)                                                                                             
                                                                                                                                
In response to a question by Co-Chair Therriault, Mr. Hart                                                                      
acknowledged that it would be good to establish the right-                                                                      
of-way. He felt that establishment of the right-of-way would                                                                    
strengthen their arguments that the public is going outside                                                                     
the right-of-way. He maintained that there are safety                                                                           
concerns with parking. The original fee request was $25                                                                         
dollars and would make public money available for services.                                                                     
                                                                                                                                
Representative Austerman pointed out that other private                                                                         
landowners establish and collect their own fees. Mr. Hart                                                                       
responded that the Department of Fish and Game agreed to                                                                        
work with private landowners and the public to collect fees.                                                                    
                                                                                                                                
JOE BALASH, STAFF, REPRESENTATIVE THERRIAULT provided                                                                           
information on the legislation. He explained that the                                                                           
Department of Natural Resources was included since they                                                                         
manage state land. There was not a conscious decision to                                                                        
exclude the Department of Transportation and Public                                                                             
Facilities. Co-Chair Therriault suggested that the                                                                              
Department of Transportation and Public Facilities be                                                                           
included. He pointed out that the Corporation technically                                                                       
owns all the land within the right-of-way.                                                                                      
                                                                                                                                
DICK BISHOP, VICE-PRESIDENT, ALASKA OUTDOOR COUNCIL (AOC)                                                                       
testified in support of the legislation. He observed that                                                                       
the intent language reflects concerns and maintained that it                                                                    
is appropriate. The legislation is essential to allow people                                                                    
to fish in the coming summer. A long-term solution would                                                                        
still be needed. He agreed that the Department of                                                                               
Transportation and Public Facilities would need to be                                                                           
consulted. He pointed out that the intent is to assure that                                                                     
the fishery can begin at the start of the season. He                                                                            
acknowledged that not all of the members agree with the                                                                         
Council's position.                                                                                                             
                                                                                                                                
Representative Austerman questioned if the state should be                                                                      
responsible for the collection of fees charged by other                                                                         
private property owners that imposed an access fee for                                                                          
hunting. Mr. Bishop responded that the ideal situation would                                                                    
be for the private landowner to take responsibility for the                                                                     
collection of fees. He stressed that it is not possible to                                                                      
address the issue in the context of the bill. He added the                                                                      
issue should not preclude resolution that would allow dip                                                                       
netters to have access in the current season.                                                                                   
                                                                                                                                
Vice Chair Bunde observed that a sport fishing license fee                                                                      
cannot be assessed, since it is no longer a sport fishery.                                                                      
He felt that there should be some cost associated with the                                                                      
use of the resource. He noted that the state would retain $7                                                                    
dollars of each trespass fee that it collects. He questioned                                                                    
the financial impact on the Department of Fish and Game.                                                                        
                                                                                                                                
KEVIN BROOKS, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,                                                                    
DEPARTMENT OF FISH AND GAME acknowledged that the change in                                                                     
designation has created problems. The entire amount would                                                                       
come to the state. The state would pay the corporations $18                                                                     
dollars of the $25 dollar fee. The department will work to                                                                      
maintain efforts to manage the fishery. He noted that the                                                                       
legislation would be a solution for the upcoming season,                                                                        
while they continue to work on a long-term solution.                                                                            
                                                                                                                                
Vice Chair Bunde questioned the cost of collecting the fee                                                                      
and stated that he would like to see the activity pay for                                                                       
itself. Mr. Brooks responded that the $7 dollars would cover                                                                    
the provision of services that have been described, such as                                                                     
bathrooms. The management cost would be born by the                                                                             
department. He noted that cost would not be under the                                                                           
Division of Sport Fish. He observed that it would be hard to                                                                    
quantify the cost of the collection because there is already                                                                    
an ongoing effort. He stressed that the fee is to cover                                                                         
access.                                                                                                                         
                                                                                                                                
In response to a question by Representative Austerman, Mr.                                                                      
Brooks confirmed that a portion of the $10 fee that was                                                                         
charged before it became a subsistence fishery covered                                                                          
access fees to the private landowner.                                                                                           
                                                                                                                                
Representative Austerman asked if there is a regulation to                                                                      
institute an agreement between the landowners and the fees                                                                      
that were collected. Mr. Brook responded that the department                                                                    
has statutory authority to enter into cooperative agreements                                                                    
under Title 16. He noted discussions are occurring regarding                                                                    
the collection of fees.                                                                                                         
                                                                                                                                
Co-Chair Therriault amended the proposed committee                                                                              
substitute to read: Department of Natural Resources and the                                                                     
Department of Transportation and Public Facilities to                                                                           
identify the portion of the Copper River Railroad right-of-                                                                     
way, associated with the Chitina dip net fishery, to carry                                                                      
out this intent. There being NO OBJECTION, it was so                                                                            
ordered.                                                                                                                        
                                                                                                                                
Co-Chair Mulder MOVED to ADOPT work draft 1-LS1516\S, dated                                                                     
4/19/00 as amended. There being NO OBJECTION, it was so                                                                         
ordered.                                                                                                                        
                                                                                                                                
Senator Wilken expressed his appreciation for the amendments                                                                    
to the legislation, but questioned if the change from a 5-                                                                      
year to a 3-year negotiated agreement would be of concern to                                                                    
the Department of Fish and Game.                                                                                                
                                                                                                                                
Representative J. Davies suggested that the sunset be on                                                                        
June 1, 2001. Co-Chair Therriault noted that there is a                                                                         
contract for the current year and that the next negotiation                                                                     
would be for three years.                                                                                                       
                                                                                                                                
Senator Wilken noted that the legislation only fixes the                                                                        
fee. Negotiations on the agreement can occur without                                                                            
changing the fee or requiring additional legislation.                                                                           
Representative J. Davies responded that the sunset date                                                                         
would require the legislature to review the issues.                                                                             
                                                                                                                                
Representative J. Davies MOVED to ADOPT a sunset date of on                                                                     
June 1, 2001. Co-Chair Mulder OBJECTED.                                                                                         
                                                                                                                                
KARA MORIARTY, STAFF, SENATOR WILKEN explained that the                                                                         
department expressed concern that a sunset would be                                                                             
detrimental to negotiations.                                                                                                    
                                                                                                                                
Representative J. Davies WITHDREW his motion.                                                                                   
                                                                                                                                
Representative Austerman questioned the fee structure. Mr.                                                                      
Brooks explained that there would be a new fiscal note of                                                                       
$150 thousand dollars in contractual: $130 fish and game                                                                        
funds and $20 general funds from the senior exemption.                                                                          
                                                                                                                                
Representative Austerman observed that the legislation                                                                          
specifies that the survey would be paid from the fee                                                                            
collected. Mr. Brooks noted that there is $100 thousand                                                                         
dollars from the $10 dollar that was collected. Co-Chair                                                                        
Therriault observed that the cost of the survey would be                                                                        
negotiated; it would not preclude the department from                                                                           
requesting general fund support from a future legislature.                                                                      
                                                                                                                                
Mr. Brooks clarified that the revenue estimate is based on                                                                      
10,000 permits resulting at $150 thousand dollars. This                                                                         
money would be fully allocated for the current year.                                                                            
                                                                                                                                
Co-Chair Mulder MOVED to report HCS CSSB 301 (FIN) out of                                                                       
Committee with the accompanying fiscal note. Representative                                                                     
J. Davies OBJECTED for the purpose of discussion. Mr. Brooks                                                                    
explained that the amount collected, which goes to the                                                                          
department is the existing $100 thousand dollars. Co-Chair                                                                      
Therriault noted that there is enough authorization to                                                                          
reflect the portion of the money that is retained by the                                                                        
department.                                                                                                                     
                                                                                                                                
Representative Austerman noted that the survey would not be                                                                     
done until the next year.                                                                                                       
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
HCS CSSB 301(FIN) was REPORTED out of Committee with a "do                                                                      
pass" recommendation and with a new fiscal impact note by                                                                       
the Department of Fish and Game.                                                                                                
CS FOR SENATE BILL NO. 4(FIN)                                                                                                   
                                                                                                                                
"An Act relating to victims' rights; relating to                                                                                
establishing an office of victims' rights; relating to                                                                          
compensation of victims of violent crimes; relating to                                                                          
eligibility for a permanent fund dividend for persons                                                                           
convicted of and incarcerated for certain offenses;                                                                             
relating to notice of appropriations concerning                                                                                 
victims' rights; and amending Rule 16, Alaska Rules of                                                                          
Criminal Procedure, Rule 9, Alaska Delinquency Rules,                                                                           
and Rule 501, Alaska Rules of Evidence; and providing                                                                           
for an effective date."                                                                                                         
                                                                                                                                
Co-Chair Therriault provided members with a proposed                                                                            
committee substitute, work draft 1-LS0029\S, dated 4/19/00                                                                      
(copy on file).                                                                                                                 
                                                                                                                                
BILL STOLZ. STAFF, SENATOR HALFORD spoke in support of the                                                                      
legislation on behalf of the sponsor. He noted that the                                                                         
primary purpose of the legislation was to fill the mandate                                                                      
of the victim's right constitutional amendment that was                                                                         
enacted in 1994. The legislation would create an Office of                                                                      
Victim's Rights, which would have an advocate with powers to                                                                    
help facilitate the constitutional rights of victims. The                                                                       
legislation creates a funding mechanism by increasing the                                                                       
pool of incarcerated persons that would be ineligible for                                                                       
permanent fund dividends. The Office was placed in the                                                                          
legislative branch in order to avoid conflicts with other                                                                       
agencies. Victims for Justice support the legislation.                                                                          
                                                                                                                                
MIKE TIBBLES, STAFF, REPRESENTATIVE THERRIAULT provided                                                                         
information on the proposed committee substitute. He noted                                                                      
that there were two changes in the proposed committee                                                                           
substitute. The first change addresses the concern of                                                                           
increasing the size of government.                                                                                              
                                                                                                                                
The victims' advocate shall appoint a person to serve                                                                           
as acting victims' advocate in the absence of the                                                                               
victims' advocate. The victims' advocate shall also                                                                             
appoint assistants and clerical personnel necessary to                                                                          
carry out the provisions of this chapter. Subject to AS                                                                         
36.30.020 and subject to the approval of the Alaska                                                                             
Legislative Council, the victims' advocate shall, to                                                                            
the maximum extent practicable, conduct the duties and                                                                          
work of the office by entering into personal services                                                                           
and other contracts the victims' advocate finds                                                                                 
necessary to carry out the provisions of this chapter.                                                                          
                                                                                                                                
Co-Chair Therriault observed that there are portions of the                                                                     
work that could not be contracted out with a private non-                                                                       
profit organization. He clarified that it is not the intent                                                                     
that the entire portion be contracted.                                                                                          
                                                                                                                                
Representative Phillips observed that she had not seen the                                                                      
issue before the Legislative Council. Mr. Tibbles explained                                                                     
that contracting is under the competitive process set up by                                                                     
for the Legislative Council. The Legislative Council would                                                                      
be requested to review the contracts. Representative                                                                            
Phillips tried to clarify that the Legislative Council would                                                                    
not be taking the job of victims' rights under its umbrella                                                                     
and that the Council would only be responsible for letting                                                                      
out the contract.                                                                                                               
                                                                                                                                
Mr. Tibbles noted that the effective date was changed to                                                                        
July 1, 2002. This would allow receipts to be collected                                                                         
before the Office is created.                                                                                                   
                                                                                                                                
Vice Chair Bunde MOVED to ADOPT work draft 1-LS0029\S, dated                                                                    
4/19/00. There being NO OBJECTION, it was so ordered.                                                                           
                                                                                                                                
Co-Chair Therriault noted that updated fiscal notes were                                                                        
needed.                                                                                                                         
                                                                                                                                
Representative Phillips noted that the authority was                                                                            
originally under the Department of Corrections. She                                                                             
questioned why it was transferred to the Legislative                                                                            
Council. Mr. Stolz did not know why the authority was                                                                           
transferred but guessed that the intent was to avoid                                                                            
conflicts.                                                                                                                      
                                                                                                                                
Representative Grussendorf observed that the Department of                                                                      
Corrections is required to notify the victim every time                                                                         
certain things happen and questioned if the authority is                                                                        
being removed too far. He asked where the office would be                                                                       
located. Co-Chair Therriault noted that the entity would be                                                                     
located within the legislative branch. Mr. Stolz pointed out                                                                    
that section 10 of the public notice section was amended to                                                                     
conform to section 9.                                                                                                           
                                                                                                                                
Representative J. Davies observed that "traditionally",                                                                         
ombudsmen are located in the legislative branch since they                                                                      
are checking up on the administrative branch.                                                                                   
                                                                                                                                
(TAPE CHANGE, HFC 00 - 128, SIDE 1)                                                                                             
                                                                                                                                
Representative Phillips observed that the Legislative                                                                           
Council had not discussed the transfer of authority. She                                                                        
requested that the proposed committee substitute be held.                                                                       
                                                                                                                                
Mr. Stolz pointed out that similar legislation (SB 219,                                                                         
1998) and the original bill did provide for the ombudsman                                                                       
authority to be under the legislative branch. The                                                                               
Legislative Affairs Agency has previously submitted fiscal                                                                      
notes.                                                                                                                          
                                                                                                                                
ROBERT BUTTCANE, DIVISION OF JUVINELLE JUSTICE, DEPARTMENT                                                                      
OF HEALTH AND SOCIAL SERVICES provided information regarding                                                                    
the legislation. He expressed appreciation for the                                                                              
participation of victims. He observed that victims help to                                                                      
hold juvenile offenders accountable for their actions and                                                                       
have helped reduce recidivism. He noted that portions of SB                                                                     
4 would add victims' services. He expressed concern that the                                                                    
legislation would create an "entity to watch the doers of                                                                       
service, provide services to victims." He suggested that                                                                        
agencies that work directly with victims be given additional                                                                    
resources to do more of what they are mandated to do under                                                                      
the Constitution. He acknowledged that the legislation is                                                                       
part of the movement toward restorative justice.                                                                                
                                                                                                                                
In response to a question by Representative Grussendorf, Mr.                                                                    
Buttcane noted that in the juvenile system, victims are                                                                         
notified of proceedings of delinquency hearings. Victims are                                                                    
provided an opportunity to give statements to the court for                                                                     
juvenile delinquency dispositions. Victims advocacy groups                                                                      
help arrange victim/offender mediation in the informal                                                                          
process. Victims are notified when juveniles are being                                                                          
released from youth facilities. Victims are also given                                                                          
access to the criminal justice system: notification and                                                                         
opportunities to be present at sentencing.                                                                                      
                                                                                                                                
Representative Grussendorf questioned what would be the role                                                                    
of the paralegals and ombudsman mandated by the legislation.                                                                    
Mr. Buttcane observed that victims sometimes hesitate to                                                                        
participate in the system and felt that an advocate would                                                                       
give victims support and help them to take a more active                                                                        
role in the juvenile and criminal justice processes. He felt                                                                    
that one of the drawbacks would be that the ombudsman would                                                                     
highlight deficiencies in the Department of Health and                                                                          
Social Services' ability to do all that they are asked to do                                                                    
through negligence or inadequate resources. There is a civil                                                                    
penalty that could result in punitive action against an                                                                         
individual or agency. The Department of Health and Social                                                                       
Services felt that the civil penalty would be problematic.                                                                      
He stressed the need for more resources and front line                                                                          
services and questioned the need for an ombudsman.                                                                              
                                                                                                                                
ANNE CARPENETI, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF                                                                       
LAW noted that she had not had time to look at the committee                                                                    
substitute.  She echoed the comments made by Mr. Buttcane.                                                                      
She stated that there are some concerns that resources would                                                                    
be spent on an ombudsman level of services rather than on                                                                       
direct services to victims that are already given by other                                                                      
agencies. She observed that legislation sponsored by                                                                            
Representative Dyson would provide a provision for                                                                              
negotiated pleads between defendants and victims. She                                                                           
stressed that if this legislation were enacted into law an                                                                      
ombudsman would be kept busy negotiating pleas on behalf of                                                                     
victims. She noted concern with the potential level of                                                                          
increased work considering the level of funding accompanying                                                                    
the legislation.                                                                                                                
                                                                                                                                
Representative Phillips noted that the responsibilities of                                                                      
the Legislative Council go beyond negotiating the contract.                                                                     
She observed that the legislation states that:                                                                                  
                                                                                                                                
(a)  Subject to restrictions and limitations imposed by                                                                         
the executive director of the Legislative Affairs                                                                               
Agency, the administrative facilities and services of                                                                           
the Legislative Affairs Agency, including computer,                                                                             
data processing, and teleconference facilities, may be                                                                          
made available to the victims' advocate to be used in                                                                           
the management of the office of victims' rights and to                                                                          
carry out the purposes of this chapter.                                                                                         
                                                                                                                                
(b)  The salary and benefits of the victims' advocate                                                                           
and the permanent staff of the victims' advocate shall                                                                          
be paid through the same procedures used for payment of                                                                         
the salaries and benefits of other permanent                                                                                    
legislative employees.                                                                                                          
                                                                                                                                
(c)  The victims' advocate shall submit a budget for                                                                            
each fiscal year to the Alaska Legislative Council, and                                                                         
the Council shall annually submit an estimated budget                                                                           
to the governor for information purposes in the                                                                                 
preparation of the executive budget. After reviewing                                                                            
and approving, with or without modifications, the                                                                               
budget submitted by the victims' advocate, the Council                                                                          
shall submit the approved budget to the finance                                                                                 
committees of the legislature.                                                                                                  
                                                                                                                                
Representative Phillips concluded that an agency is being                                                                       
created.                                                                                                                        
                                                                                                                                
SB 4 was heard and HELD in Committee for further                                                                                
consideration.                                                                                                                  
HOUSE CS FOR SENATE BILL NO. 204(HES)                                                                                           
                                                                                                                                
"An Act extending the termination date of the Alaska                                                                            
Commission on Aging; transferring the office of the                                                                             
long-term care ombudsman from the Alaska Commission on                                                                          
Aging to the legislative branch; and providing for an                                                                           
effective date."                                                                                                                
                                                                                                                                
JANE DEMMERT, EXECUTIVE DIRECTOR, ALASKA COMMISSION ON                                                                          
AGING, provided information on SB 204. She observed that the                                                                    
bill would extend the sunset on the Commission. The                                                                             
Commission is in a role that directly impacts the lives the                                                                     
older Alaskans around the state through its grant programs.                                                                     
The Commission assists in funding direct services. She                                                                          
observed that discussion has occurred regarding the                                                                             
organizational out-stationing of the long-term care                                                                             
function. She noted that the Commission looked at out-                                                                          
stationing options during the interim in consultation with                                                                      
four different agencies: State Ombudsman, Alaska Mental                                                                         
Health Trust Authority, Disability Law Center and Alaska                                                                        
Legal Services. Given the youth of Alaska's assisted living                                                                     
industry and rapid growth in developing long-term care, the                                                                     
Commission concluded that it would have a higher level of                                                                       
status within state government. The State Ombudsman Office                                                                      
concluded that it would not be in the best interest of                                                                          
persons with concerns regarding the performance of state                                                                        
government to have the two offices merged. The Alaska Mental                                                                    
Health Trust Authority was not ready to assume the                                                                              
responsibility, but has remained interested and involved in                                                                     
the Search Committee. The Commission has restructured its                                                                       
bylaws to provide a clear definition of the role of the                                                                         
Commission in interfacing with the Ombudsman Office. The                                                                        
Commission feels that it has crafted a healthy and                                                                              
responsive approach to support that function. She                                                                               
acknowledged that there are merits to a transfer.                                                                               
                                                                                                                                
Representative Grussendorf asked if the Commission would be                                                                     
satisfied with an extension of time to allow further                                                                            
discussions. Ms. Demmert responded that the Commission would                                                                    
be satisfied with a time extension.                                                                                             
                                                                                                                                
Representative Phillips pointed out that the legislation                                                                        
passed from the Senate Finance Committee only contained the                                                                     
provision to extend the sunset date.  On the House side,                                                                        
there was an amendment to place it under the Legislative                                                                        
Council.  She noted that the Legislative Council was not                                                                        
consulted. No research was done regarding cost. An audit of                                                                     
the issue concluded several options. She observed that a                                                                        
long-term care task force would consider the issue during                                                                       
the interim and recommended that the ombudsman be placed                                                                        
under the Alaska Mental Health Trust Authority for the                                                                          
meantime. She maintained that the long-term ombudsman would                                                                     
not be properly placed in Legislative Council.                                                                                  
                                                                                                                                
Representative J. Davies agreed that the issue should be                                                                        
discussed further. He felt that it might be appropriately                                                                       
placed under the Legislative Council with more                                                                                  
consideration.                                                                                                                  
                                                                                                                                
SHARON CLARKE, STAFF, SENATOR MIKE MILLER, mentioned that                                                                       
the sponsor's intent was solely to extend the Commission on                                                                     
Aging.  The discussion on the ombudsman was added at the                                                                        
direction of another senator.  She clarified that the intent                                                                    
was not to place it under the Legislative Council: the                                                                          
Legislative Council was only one of the options.                                                                                
Representative Phillips clarified that the amendment did not                                                                    
come from Senator Mike Miller.  Ms. Clarke acknowledged that                                                                    
the discussion did come up with Senator Miller.  It was not                                                                     
acted upon.                                                                                                                     
                                                                                                                                
In response to Vice Chair Bunde, Ms. Clarke explained that                                                                      
discussions in the Senate Finance Committee indicated that                                                                      
the long-term care task force could address the issue.                                                                          
                                                                                                                                
Vice Chair Bunde asked if there was a letter of intent.                                                                         
                                                                                                                                
Representative Phillips MOVED to adopt Amendment #1.                                                                            
Amendment 1 would remove language relating to the Long-term                                                                     
Care Ombudsman from the legislation. The legislation would                                                                      
be returned to its original language, with an effective date                                                                    
of June 30, 2000. The sunset date would be the year 2004.                                                                       
                                                                                                                                
There being NO OBJECTION, Amendment 1 was adopted.                                                                              
                                                                                                                                
Vice Chair Bunde MOVED a Letter of Intent that would ask                                                                        
that the Long-term Care Task Force address the placement of                                                                     
the ombudsman. There being NO OBJECTION, it was so ordered.                                                                     
                                                                                                                                
MIKE TIBBLES, STAFF, CO-CHAIR THERRIAULT observed that with                                                                     
the adoption of Amendment 1 the title change resolution was                                                                     
not needed.                                                                                                                     
                                                                                                                                
Representative G. Davis asked the impact of the amendment on                                                                    
the fiscal note.  Mr. Tibbles replied that the long-term                                                                        
care ombudsman portion of the fiscal note was $138.0                                                                            
thousand dollars. The RSA or interagency receipt to the                                                                         
legislation would not be needed with the adoption of the                                                                        
amendment.                                                                                                                      
                                                                                                                                
Representative J. Davies recommended that there should be a                                                                     
revised fiscal note.  Mr. Tibbles reported that there would                                                                     
be a new analysis.                                                                                                              
                                                                                                                                
Representative Williams MOVED to report HCS CS SB 204 (FIN)                                                                     
out of Committee with individual recommendations and with                                                                       
the new fiscal note.   There being NO OBJECTION, it was so                                                                      
ordered.                                                                                                                        
                                                                                                                                
HCS CSSB 204 (FIN) was REPORTED out of Committee with a "do                                                                     
pass" recommendation and with a new fiscal impact note by                                                                       
the Department of Administration.                                                                                               
SENATE BILL NO. 207                                                                                                             
                                                                                                                                
"An Act relating to the establishment and enforcement                                                                           
of medical support orders for children; and providing                                                                           
for an effective date."                                                                                                         
                                                                                                                                
BARBARA MIKLOS, CHILD SUPPORT ENFORCEMENT DIVISION testified                                                                    
via teleconference in support of SB 207.                                                                                        
                                                                                                                                
Senate Bill 207 helps both parents by providing more                                                                            
flexibility in child support cases. It gives the                                                                                
parents a choice by allowing the Child Support                                                                                  
Enforcement Division to establish a medical support                                                                             
order without also establishing a financial support                                                                             
order at the same time.                                                                                                         
                                                                                                                                
The child support agency is currently required to                                                                               
establish a medical support order whenever a child                                                                              
starts receiving medical assistance benefits. This is                                                                           
to ensure that the non-custodial parent provides health                                                                         
care coverage if available at a reasonable cost from                                                                            
his or her employer. Under existing statute, the agency                                                                         
must also establish a financial order at the same time                                                                          
-- even though the parents may not want or need a                                                                               
financial order. This creates problems if the financial                                                                         
order for monthly child support payments is not needed,                                                                         
and it also creates problems if the custodial parent                                                                            
later receives public assistance benefits and the child                                                                         
support agency has to go back and collect financial                                                                             
support. This legislation would solve both problems by                                                                          
allowing the agency to set up a medical support order                                                                           
only -- if that is what both parents want.                                                                                      
                                                                                                                                
This bill also amends the medical support statutes to                                                                           
provide that either parent, not simply the non-                                                                                 
custodial parent, may be required to provide health                                                                             
care coverage. This allows the court or the child                                                                               
support agency to consider which parent has the better                                                                          
or more cost-effective health care coverage available                                                                           
for the child.                                                                                                                  
                                                                                                                                
The bill also amends state law to clarify that a                                                                                
medical support order shall be issued regardless                                                                                
whether CSED knows at the time if health care coverage                                                                          
is available to either parent. That provision, however,                                                                         
would not take effect unless one or both of the parents                                                                         
has health insurance available at a reasonable cost.                                                                            
This allows more efficient enforcement of medical                                                                               
support for children.                                                                                                           
                                                                                                                                
In a survey of other states, most have separate                                                                                 
provisions for medical and financial orders as proposed                                                                         
in SB 207. This change in Alaska statutes is allowed                                                                            
under federal law and regulations.                                                                                              
                                                                                                                                
Representative J. Davies questioned if the legislation                                                                          
allows for the possibility that both parents be required to                                                                     
provide medical insurance.                                                                                                      
                                                                                                                                
DIANE WENDLANDT, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF                                                                      
LAW testified via teleconference. She affirmed that the                                                                         
legislation allows for the possibility that both parents be                                                                     
required to provide medical insurance. She noted that courts                                                                    
could require both parents to provide coverage. One parent's                                                                    
coverage may not cover everything that the other parent has.                                                                    
                                                                                                                                
Representative Foster MOVED to report SB 207 out of                                                                             
Committee with the accompanying fiscal note. There being NO                                                                     
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
SB 207 was REPORTED out of Committee with a "do pass"                                                                           
recommendation and with a zero fiscal note by the Department                                                                    
of Revenue, published 1/20/00.                                                                                                  
                                                                                                                                
RECESSED                                                                                                                        
                                                                                                                                
The meeting was recessed at 4:10 p.m.                                                                                           
                                                                                                                                
RECONVENED                                                                                                                      
                                                                                                                                
The meeting reconvened at 4:50 p.m.                                                                                             
HOUSE BILL NO. 281                                                                                                              
                                                                                                                                
"An Act providing for the issuance of general                                                                                   
obligation bonds in the amount of $665,000,000 for the                                                                          
purposes of paying the cost of design, construction,                                                                            
and renovation of public elementary and secondary                                                                               
schools, renovation of state buildings, capital                                                                                 
improvements at the University of Alaska, and capital                                                                           
improvements to state harbors; and providing for an                                                                             
effective date."                                                                                                                
                                                                                                                                
Co-Chair Mulder provided members with a proposed committee                                                                      
substitute 1-LS1201\T, 4/19/00 (copy on file).                                                                                  
                                                                                                                                
Vice Chair Bunde MOVED to ADOPT 1-LS1201\T, 4/19/00. There                                                                      
being NO OBJECTION, it was so ordered.                                                                                          
                                                                                                                                
Co-Chair Mulder noted that there was a questioned concerning                                                                    
dedicated revenue in relation to the securitization of the                                                                      
tobacco bonds.                                                                                                                  
                                                                                                                                
JOHN BITNEY, LEGISLATIVE LIAISON, ALASKA HOUSING FINANCE                                                                        
CORPORATION, DEPARTMENT OF REVENUE provided members with a                                                                      
letter from the AHFC's bond counsel (copy on file). He                                                                          
concluded that the bond counsel had no concerns regarding                                                                       
the dedication of the revenue. The bill is an authorization                                                                     
of the tobacco settlement, as a sale of an asset of the                                                                         
state to the Alaska Housing Finance Corporation (AHFC) or a                                                                     
subsidiary.                                                                                                                     
                                                                                                                                
Co-Chair Mulder observed that the bond counsel stated that                                                                      
they do not believe that the legislation would create a                                                                         
dedicated fund problem under Article IX, section 7 of the                                                                       
Alaska Constitution.                                                                                                            
                                                                                                                                
Co-Chair Mulder reviewed the committee substitute. He noted                                                                     
that the first change was in title, lines 5 and 6. The new                                                                      
language clarifies that the legislation relates "to the                                                                         
deposit of certain anticipated revenue from a certain                                                                           
tobacco litigation settlement".                                                                                                 
                                                                                                                                
Page 2, lines 6 - 9 and clarifies what happens if there is                                                                      
excess revenues:                                                                                                                
                                                                                                                                
It is also the intent of the legislature that tobacco                                                                           
settlement revenues that are determined by the                                                                                  
commissioner of revenue to be in excess of those needed                                                                         
to pay planned debt service on tobacco bonds be                                                                                 
deposited into the general fund.                                                                                                
                                                                                                                                
"Annually" and a definition of "investment grade rates" were                                                                    
added in section 3: In this subsection, "investment grade                                                                       
rates" means a Moody's Investor Service rating of Baa3 or                                                                       
better or a Standard and Poors and Fitch IBCA rating of BBB-                                                                    
or better.                                                                                                                      
                                                                                                                                
Deferred maintenance, renewal and replacement, and code                                                                         
compliance projects for the University of Alaska were added                                                                     
on page 5.                                                                                                                      
                                                                                                                                
Co-Chair Mulder observed that exemptions from certain school                                                                    
construction requirements were deleted (sections 5, 6 and                                                                       
7).                                                                                                                             
                                                                                                                                
Co-Chair Mulder explained that language was included on page                                                                    
7, stipulating that funds be received by the Department of                                                                      
Transportation and Public Facilities.                                                                                           
                                                                                                                                
(1) the port or harbor facility is located in a                                                                                 
municipality in which the port or harbor facility is                                                                            
owned and operated by the municipality;                                                                                         
(2) ownership of the port or harbor facility that is                                                                            
being funded has been transferred from the state to the                                                                         
municipality by a transfer agreement under AS                                                                                   
35.10.120; and                                                                                                                  
(3) the state completes a bill of sale transferring the                                                                         
port or harbor facility from the state to the                                                                                   
municipality.                                                                                                                   
                                                                                                                                
In response to a question by Representative Williams, Co-                                                                       
Chair Mulder noted that the Department of Transportation and                                                                    
Public Facilities desired flexibility. Allocations for each                                                                     
project were based on estimates by the department.                                                                              
                                                                                                                                
Representative Grussendorf noted that the proposal runs on                                                                      
the Department of Education and Early Development priority                                                                      
list. The first five projects are included. He questioned                                                                       
the process of including projects that were not in sequence                                                                     
on the list.                                                                                                                    
                                                                                                                                
Co-Chair Mulder responded that the top five schools were                                                                        
taken first. Other projects were included in an attempt to                                                                      
provide a balance of statewide projects.                                                                                        
                                                                                                                                
Representative Grussendorf suggested that the top ten                                                                           
schools on the Department of Education and Early                                                                                
Development's list be included with deferred maintenance                                                                        
projects. Other funding sources could be considered for                                                                         
ports, harbors, and university capital projects. He added                                                                       
that if the legislation were to be the vehicle to fund                                                                          
harbors and the money was to be given to the Department of                                                                      
Transportation and Public Facilities that Sitka should be on                                                                    
the list.                                                                                                                       
                                                                                                                                
Co-Chair Mulder explained that the reason that they did not                                                                     
go straight down the list was due to the question of some                                                                       
district's ability to participate on the list. He noted that                                                                    
Anchorage only participates on the school construction list                                                                     
in a minor fashion. There are a number of school districts                                                                      
in the railbelt that do not participate on the department's                                                                     
list.                                                                                                                           
                                                                                                                                
(TAPE CHANGE, HFC 00 - 128, SIDE 2)                                                                                             
                                                                                                                                
Representative Grussendorf questioned why the Sitka harbor                                                                      
was not on the list. Co-Chair Mulder responded that the                                                                         
scarcity of dollars did not allow the inclusion of Sitka                                                                        
harbor project. Representative Grussendorf stated his intent                                                                    
to included Sitka to be worked within the money that is                                                                         
allocated for harbors.                                                                                                          
                                                                                                                                
ANNALEE MCCONNELL, DIRECTOR, OFFICE OF MANAGEMENT AND                                                                           
BUDGET, OFFICE OF THE GOVERNOR provided information. She                                                                        
observed that the changes made in section 3 are agreeable to                                                                    
the Administration. She hoped to have intent language                                                                           
clarifying that if the revenue stream exceeds projections                                                                       
that at least 1.6 percent of the excess would be considered                                                                     
for increasing tobacco cessation efforts. She observed that                                                                     
the suspension of the Department of Education and Early                                                                         
Development priority list needs to be removed since it is                                                                       
not a three-year plan. The Administration still has concerns                                                                    
about the projects. There are more school construction and                                                                      
major maintenance projects that should be funded now.                                                                           
                                                                                                                                
Co-Chair Mulder questioned what would happen if the money                                                                       
were not received as projected. Ms. McConnell responded that                                                                    
the debt service would be longer than projected.                                                                                
                                                                                                                                
DEVON MITCHELL, EXECUTIVE DIRECTOR, ALASKA MUNICIPAL BOND                                                                       
BANK AUTHORITY, DEPARTMENT OF REVENUE provided information                                                                      
on the legislation. He explained that the debt service would                                                                    
be a percentage of the expected revenue projected for the                                                                       
tobacco settlement monies overtime that would allow investor                                                                    
confidence. A threshold would be established to reach a                                                                         
revenue stream projection. There would be a residual above                                                                      
this line, which would be available for other purposes if                                                                       
the revenue stream were beyond the projection.                                                                                  
                                                                                                                                
Mr. Mitchell explained that AHFC is confident that they                                                                         
could reach the proceeds as being structured.                                                                                   
                                                                                                                                
JOE DUBLER, SENIOR FINANCE OFFICER, ALASKA HOUSING FINANCE                                                                      
CORPORATION (AHFC), DEPARTMENT OF REVENUE provided                                                                              
information on the issuance. He observed that if there were                                                                     
not $269 million dollars at issuance that the rest of the                                                                       
state's GO could be utilized to make up the deficit. Other                                                                      
financing methods could be employed. The residual after the                                                                     
planned debt service could impact the amount of bonds                                                                           
issued. He noted that some underwriters feel that                                                                               
bondholders are getting skittish.                                                                                               
                                                                                                                                
Co-Chair Mulder questioned if lines 7 - 9 should be deleted                                                                     
from the legislation                                                                                                            
                                                                                                                                
Mr. Mitchell clarified that the sale will do what is                                                                            
required to achieve the target. The language provides                                                                           
flexibility.  Mr. Dubler added that the language is needed                                                                      
in the case of a windfall.                                                                                                      
                                                                                                                                
Co-Chair Mulder noted that the anticipated yield is $269                                                                        
million dollars. The legislation allocates $269,795,987                                                                         
dollars.                                                                                                                        
                                                                                                                                
Mr. Dubler stated that the allocation amount is not a                                                                           
concern. Mr. McConnell suggested the numbers should be the                                                                      
same.                                                                                                                           
                                                                                                                                
In response to a question by Representative G. Davis, Mr.                                                                       
Bitney explained that they would set up an administrative                                                                       
process for the projects. The appropriation would be the                                                                        
mechanism to receive funds. Funds would be available as the                                                                     
projects come on line.                                                                                                          
                                                                                                                                
Representative G. Davis questioned if the project was                                                                           
delayed and not ready in 5 years, would the money be                                                                            
available.                                                                                                                      
                                                                                                                                
Mr. Bitney explained that the appropriation is the mechanism                                                                    
that transfers the funds and that the same rules apply as                                                                       
for other state capital projects. They would have to receive                                                                    
a reappropriation or lapse extension if the money is not                                                                        
spent. Co-Chair Therriault observed that the structure                                                                          
doesn't allow as much flexibility as before.                                                                                    
                                                                                                                                
Co-Chair Mulder asked how much elasticity is in the amount.                                                                     
Mr. Mitchell stated that he would not know how much                                                                             
elasticity would be in the bond amount until they go out                                                                        
into the market.                                                                                                                
                                                                                                                                
HB 281 was heard and HELD in Committee for further                                                                              
consideration.                                                                                                                  
                                                                                                                                
RECESSED                                                                                                                        
                                                                                                                                
The meeting was recessed at 5:25 p.m.                                                                                           
                                                                                                                                
RECONVENED                                                                                                                      
                                                                                                                                
The meeting reconvened at 7:40 p.m.                                                                                             
HOUSE BILL NO. 287                                                                                                              
                                                                                                                                
"An Act making and amending capital appropriations and                                                                          
reappropriations and capitalizing funds; and providing                                                                          
for an effective date."                                                                                                         
                                                                                                                                
Co-Chair Mulder pointed out that HB 287 only takes effect if                                                                    
HB 281 or something similar is passed.                                                                                          
                                                                                                                                
Co-Chair Therriault questioned if there is language that                                                                        
restricts authorization of projects if HB 281 passes but the                                                                    
bonds are not sold.                                                                                                             
                                                                                                                                
Mr. Bitney explained that the authorizations are in the same                                                                    
manner as authorization for federal appropriations. They                                                                        
would be based on receipt of the proceeds of the sale.                                                                          
                                                                                                                                
Co-Chair Therriault questioned if the language would require                                                                    
that bonds be issued by AHFC.                                                                                                   
                                                                                                                                
Mr. Dubler suggested the language be clarified by adding                                                                        
"bonds issued under HB 281".                                                                                                    
                                                                                                                                
Representative J. Davies pointed out that section 3                                                                             
identifies bonds. Mr. Bitney noted that the legislation                                                                         
refers to bonds authorized under the act in section 3.                                                                          
                                                                                                                                
Representative J. Davies noted that clarification would be                                                                      
needed on page 1, line 7 and page 3, line 13 and 31.                                                                            
                                                                                                                                
Co-Chair Mulder questioned if the language should be added                                                                      
to the effect that the "proceeds of the bonds issued by AFHC                                                                    
are those bonds authorized under section 3", so that AHFC                                                                       
would not be required to issue bonds if the tobacco bond                                                                        
issuance failed.                                                                                                                
                                                                                                                                
GEORGE UTERMOHLE, LEGAL COUNSEL, LEGISLATIVE AFFAIRS AGENCY                                                                     
pointed out that section 3 does not authorize the issuance                                                                      
of any bonds.                                                                                                                   
                                                                                                                                
Co-Chair Therriault suggested that the "bonds referenced in                                                                     
section 3" be added. Mr. Utermohle agreed with Co-Chair                                                                         
Therriault's suggestion.                                                                                                        
                                                                                                                                
Mr. Utemohle explained that section 3 provides that the bill                                                                    
does not take effect if the contingency is not met. Section                                                                     
4 provides that if the contingency is met that the                                                                              
legislation takes effects July 1, 2000. If the contingency                                                                      
were met after July 1, 2000 then the effective date would be                                                                    
immediate.                                                                                                                      
                                                                                                                                
Co-Chair Therriault reiterated his concerns. He suggested                                                                       
the addition of "proceeds of the bonds referenced in section                                                                    
3 of this act."                                                                                                                 
                                                                                                                                
Mr. Utemohle agreed that the suggested language would tie                                                                       
the appropriations to the bonds issued by AHFC and described                                                                    
in section 3.                                                                                                                   
                                                                                                                                
Co-Chair Mulder provided members with a proposed committee                                                                      
substitute 1-GH2043|G, 4/19/00 (copy on file).                                                                                  
                                                                                                                                
Co-Chair Therriault MOVED to ADOPT 1-GH2043|G, 4/19/00.                                                                         
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
Co-Chair Therriault MOVED to ADOPT Amendment 1 add                                                                              
"referenced by section 3 of this act" after "proceeds of the                                                                    
bonds." There being NO OBJECTION, it was so ordered.                                                                            
                                                                                                                                
HB 287 was heard and HELD in Committee for further                                                                              
consideration.                                                                                                                  
HOUSE BILL NO. 281                                                                                                              
                                                                                                                                
"An Act providing for the issuance of general                                                                                   
obligation bonds in the amount of $665,000,000 for the                                                                          
purposes of paying the cost of design, construction,                                                                            
and renovation of public elementary and secondary                                                                               
schools, renovation of state buildings, capital                                                                                 
improvements at the University of Alaska, and capital                                                                           
improvements to state harbors; and providing for an                                                                             
effective date."                                                                                                                
                                                                                                                                
Representative J. Davies MOVED to ADOPT Amendment 1.                                                                            
Amendment 1 would authorize the first 10 projects on the                                                                        
Department of Education and Early Development list for                                                                          
$153,914.5 million dollars and major maintenance of                                                                             
$64,881.3 million dollars. This would cover the entire major                                                                    
maintenance list except for projects covered under school                                                                       
debt reimbursement for a 70/30 bond authorization. The                                                                          
amendment would also fund $50.9 million dollars for the                                                                         
University of Alaska.                                                                                                           
                                                                                                                                
Co-Chair Mulder OBJECTED. He pointed out that it is                                                                             
necessary to balance the capital program. He maintained that                                                                    
Amendment 1 would shift the balance in favor of rural                                                                           
Alaska.                                                                                                                         
                                                                                                                                
Representative J. Davies acknowledged that the amendment                                                                        
would not provide a balance in relation to legislative                                                                          
districts but argued that it would be fair. The amendment                                                                       
would take the top priorities as determined by the                                                                              
department and major maintenance projects. He pointed out                                                                       
that major maintenance would become construction projects if                                                                    
it were not addressed.                                                                                                          
                                                                                                                                
Representative J. Davies suggested that there are other                                                                         
vehicles to achieve balance and fund ports, harbors and                                                                         
school debt reimbursement. He stressed that important                                                                           
projects fall by the wayside.                                                                                                   
                                                                                                                                
Co-Chair Mulder noted his appreciation for the amendment,                                                                       
but stressed that he is bound by constraints of balance. He                                                                     
pointed out that Fairbanks would only receive $8 million                                                                        
dollars under the amendment.                                                                                                    
                                                                                                                                
Representative Grussendorf stated that he would prefer that                                                                     
the money be in one category: education. He spoke in support                                                                    
of the amendment and the importance of funding the top 10                                                                       
schools for construction on the department's list and as                                                                        
much maintenance as possible.                                                                                                   
                                                                                                                                
Co-Chair Therriault spoke in opposition to the amendment.                                                                       
Fairbanks has projects that are not on the list because they                                                                    
discontinued submitting the paper work for inclusion.                                                                           
                                                                                                                                
Vice Chair Bunde spoke in opposition.                                                                                           
                                                                                                                                
Representative J. Davies agreed that Fairbanks has a need                                                                       
for new schools and school maintenance projects.                                                                                
                                                                                                                                
(TAPE CHANGE, HFC 00 - 129, SIDE 1)                                                                                             
                                                                                                                                
Representative J. Davies noted that there are a huge number                                                                     
of urban schools that are on the list that have to go for                                                                       
voter approval. He suggested that these projects stick with                                                                     
the 70/30 plan.                                                                                                                 
                                                                                                                                
Representative Grussendorf noted that he has statewide                                                                          
concerns. He pointed out that the courts have recognized                                                                        
that there is problem with how money is being spent.                                                                            
                                                                                                                                
Representative G. Davis opposed the amendment. He stressed                                                                      
that it is better to have something instead of nothing.                                                                         
                                                                                                                                
Representative Williams spoke against the amendment.                                                                            
                                                                                                                                
Representative J. Davies observed that this was the first                                                                       
chance for amendments.                                                                                                          
                                                                                                                                
A roll call vote was taken on the motion to adopt Amendment                                                                     
1.                                                                                                                              
                                                                                                                                
IN FAVOR: Davies, Grussendorf, Moses                                                                                            
OPPOSED: Austerman, Bunde, Davis, Foster, Kohring,                                                                              
  Williams, Therriault, Mulder                                                                                                  
                                                                                                                                
The MOTION FAILED (4-8).                                                                                                        
                                                                                                                                
Representative Foster MOVED to report CSHB 281 (FIN) out of                                                                     
Committee with the accompanying fiscal note. There being NO                                                                     
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
CSHB 281 (FIN) was REPORTED out of Committee with a "do                                                                         
pass" recommendation and with a "do pass" recommendation and                                                                    
with a new fiscal impact note by the Department of Revenue.                                                                     
HOUSE BILL NO. 287                                                                                                              
                                                                                                                                
"An Act making and amending capital appropriations and                                                                          
reappropriations and capitalizing funds; and providing                                                                          
for an effective date."                                                                                                         
                                                                                                                                
Representative Foster MOVED to report CSHB 287 (FIN) out of                                                                     
Committee. There being NO OBJECTION, it was so ordered.                                                                         
                                                                                                                                
CSHB 287 (FIN) was REPORTED out of Committee with a "do                                                                         
pass" recommendation.                                                                                                           
ADJOURNMENT                                                                                                                     
                                                                                                                                
The meeting was adjourned at 7:20 p.m.                                                                                          
House Finance Committee 25                                                                                                      

Document Name Date/Time Subjects