Legislature(2001 - 2002)

04/25/2001 01:48 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                  HOUSE FINANCE COMMITTEE                                                                                       
                       April 25, 2001                                                                                           
                          1:48 PM                                                                                               
                                                                                                                                
TAPE HFC 01 - 95, Side A                                                                                                        
TAPE HFC 01 - 95, Side B                                                                                                        
TAPE HFC 01 - 96, Side A                                                                                                        
TAPE HFC 01 - 96, Side B                                                                                                        
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Williams called the House  Finance Committee meeting                                                                   
to order at 1:48 PM.                                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Eldon Mulder, Co-Chair                                                                                           
Representative Bill Williams, Co-Chair                                                                                          
Representative Con Bunde, Vice-Chair                                                                                            
Representative Eric Croft                                                                                                       
Representative John Davies                                                                                                      
Representative Carl Moses                                                                                                       
Representative Richard Foster                                                                                                   
Representative John Harris                                                                                                      
Representative Bill Hudson                                                                                                      
Representative Ken Lancaster                                                                                                    
Representative Jim Whitaker                                                                                                     
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Nico  Bus,  Administrative  Services   Manager,  Division  of                                                                   
Support  Services,  Department   of  Natural  Resources;  Dan                                                                   
Branch,  Assistant  Attorney   General,  Department  of  Law;                                                                   
Catherine   Reardon,  Director,   Division  of   Occupational                                                                 
Licensing, Department of Community  and Economic Development;                                                                   
Elmer Lindstrom, Special Assistant,  Department of Health and                                                                   
Social   Services;   Mike   Livingston,    Anchorage   Police                                                                   
Department; Kurt  Parkan, Deputy Commissioner,  Department of                                                                   
Transportation   and   Public    Facilities;   John   Bitney,                                                                   
Legislative  Liaison,  Alaska  Housing  Finance  Corporation,                                                                   
Department of Revenue.                                                                                                          
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Mike Livingston,  Anchorage Police Department;  Sharon Young,                                                                   
Anchorage;  Brian  Rogers,  Fairbanks;  David  Braun,  Healy;                                                                   
Linda Paganelli,  Healy; Nancy Bale, Anchorage;  Dick Mylius,                                                                   
Anchorage; Larry Jones, Executive  Director, Board of Parole;                                                                   
Joe Fields,  President, Kantishna  Holdings Inc.,  Anchorage;                                                                   
Mary Kaye Hession.                                                                                                              
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 49     "An Act extending the termination date of the                                                                         
          Board  of Parole;  and providing  for an  effective                                                                   
          date."                                                                                                                
                                                                                                                                
          CSHB 49 (FIN) was REPORTED out of Committee with a                                                                    
          "do  pass"  recommendation  and with  a  previously                                                                   
          published zero  fiscal note (#1) by  the Department                                                                   
          of Corrections.                                                                                                       
                                                                                                                                
HB 108    "An  Act   relating  to  the  accounting   for  and                                                                   
          appropriation  of fees  for  recording and  related                                                                   
          services  by the Department  of Natural  Resources;                                                                   
          and providing for an effective date."                                                                                 
                                                                                                                                
          HB 108 was REPORTED out of Committee with a "do                                                                       
          pass"   recommendation   and  with   a   previously                                                                   
          published   fiscal   impact   note  (#1)   by   the                                                                   
          Department of Natural Resources.                                                                                      
                                                                                                                                
HB 191    "An  Act authorizing  financing for certain  public                                                                   
          transportation  projects;   giving  notice  of  and                                                                   
          approving  the  entry  into,  and the  issuance  of                                                                   
          revenue obligations  that provide participation in,                                                                   
          lease-financing      agreements      for      those                                                                   
          transportation  projects;   and  providing  for  an                                                                   
          effective date."                                                                                                      
                                                                                                                                
          HB 191 was heard and HELD in Committee for further                                                                    
          consideration.                                                                                                        
                                                                                                                                
HB 228    "An  Act  relating to  the  offense  of selling  or                                                                   
          giving  tobacco to  a minor,  to the accounting  of                                                                   
          fees   from  business   license  endorsements   for                                                                   
          tobacco  products,  to  the disclosure  of  certain                                                                   
          confidential   cigarette    and   tobacco   product                                                                   
          information, to notification  regarding a cigarette                                                                   
          manufacturer's   noncompliance  with   the  tobacco                                                                   
          product  Master Settlement  Agreement, to  business                                                                   
          license endorsements  for sale of tobacco products,                                                                   
          to  citations and  penalties for  illegal sales  of                                                                   
          tobacco  products; and  providing for an  effective                                                                   
          date."                                                                                                                
                                                                                                                                
          CSHB 228  (FIN) was REPORTED out of  Committee with                                                                   
          a "do pass" recommendation  and with and with and a                                                                   
          previously  published zero fiscal note  (#1) by the                                                                   
          Department   of  Revenue;   and  three   previously                                                                   
          published  fiscal impact  notes (#2,  #3, and  #4):                                                                   
          Department of Law, Department  of Health and Social                                                                   
          Services and  Department of Community  and Economic                                                                   
          Development.                                                                                                          
                                                                                                                                
HB 234    "An Act  relating to the financing  of construction                                                                   
          and  renovation of certain  public facilities;  and                                                                   
          providing for an effective date."                                                                                     
                                                                                                                                
          HB 234 was heard and  HELD in Committee for further                                                                   
          consideration.                                                                                                        
                                                                                                                                
HB 244    "An Act  relating to a  grant of state land  to the                                                                   
          Denali Borough for a  railroad and utility corridor                                                                   
          and  a  railroad  development   project;  repealing                                                                   
          provisions  relating to a  grant of a  right-of-way                                                                   
          of land for a railroad  and utility corridor to the                                                                   
          Alaska    Industrial    Development   and    Export                                                                   
          Authority; and providing for an effective date."                                                                      
                                                                                                                                
          CSHB 244  (FIN) was REPORTED out of  Committee with                                                                   
          a "do  pass" recommendation  and with  a previously                                                                   
          published   fiscal   impact   (#1)  note   by   the                                                                   
          Department of Natural Resources.                                                                                      
HOUSE BILL NO. 49                                                                                                             
                                                                                                                                
     "An Act extending the termination date of the Board of                                                                     
     Parole; and providing for an effective date."                                                                              
                                                                                                                                
LARRY JONES,  EXECUTIVE DIRECTOR,  BOARD OF PAROLE  testified                                                                   
in support  of the  legislation. He noted  that the  Board of                                                                   
Parole supports the extension  of the sunset date to June 30,                                                                   
2006. The  Board is made  up of five  citizen members  and is                                                                   
tied to every element of the justice  system. He stressed the                                                                   
importance  of  the  Parole  Board  and  emphasized  that  it                                                                   
represents the most humanized  aspect of the criminal justice                                                                   
system. Parole  is not a  right; it  is a discretion  and the                                                                   
privilege  of  parole rests  solely  with the  Parole  Board.                                                                   
Public  safety  is  the  number  one  factor  in  considering                                                                   
parole. He  observed that the  state of Alaska  saves between                                                                   
$10  - $12  million dollars  in  hard bed  costs by  allowing                                                                   
prisoners   to  go  into   the  public   sector  with   close                                                                   
supervision.                                                                                                                    
                                                                                                                                
Vice-Chair  Bunde observed  that the  Legislative Budget  and                                                                   
Audit  Committee  report  supports a  longer  extension.  Mr.                                                                   
Jones  agreed that  a longer  extension would  be useful.  He                                                                   
emphasized  that extensive  financial  review is  unnecessary                                                                   
due to  the size of  the Board. He  explained that  the Board                                                                   
chose a  2006 review date based  on its past  experiences. He                                                                   
pointed out  that Alaska has  a constitutional mandate  for a                                                                   
parole  system. He  said that  an increase  to 2010 would  be                                                                   
welcomed.                                                                                                                       
                                                                                                                                
Representative  Lancaster  noted   that  there  was  a  small                                                                   
concern  regarding overseeing  parolees by  the Board  and/or                                                                   
the Administration.                                                                                                             
                                                                                                                                
Mr.  Jones  explained   that  all  parolees   are  under  the                                                                   
jurisdiction of  the Board, but  supervision is  conducted by                                                                   
the  Department  of  Corrections.  Only about  4  percent  of                                                                   
revocation  hearings  are discretionary  parolees.  Mandatory                                                                   
parolees are  released without personal interaction  with the                                                                   
Parole Board.  The supervision provided by the  department is                                                                   
sufficient in the mind of the Board.                                                                                            
                                                                                                                                
Vice-Chair Bunde  MOVED to ADOPT  Amendment 1:  delete "2006"                                                                   
and  insert  "2008". There  being  NO  OBJECTION, it  was  so                                                                   
ordered.                                                                                                                        
                                                                                                                                
Representative Hudson  MOVED to report  CSHB 49 (FIN)  out of                                                                   
Committee with  the accompanying fiscal note.  There being NO                                                                   
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
CSHB 49 (FIN) was REPORTED out  of Committee with a "do pass"                                                                   
recommendation  and with a  previously published  zero fiscal                                                                   
note (#1) by the Department of Corrections.                                                                                     
HOUSE BILL NO. 108                                                                                                            
                                                                                                                                
     "An   Act   relating   to   the   accounting   for   and                                                                   
     appropriation   of  fees   for  recording  and   related                                                                   
     services  by the  Department of  Natural Resources;  and                                                                   
     providing for an effective date."                                                                                          
                                                                                                                                
NICO  BUS,  ADMINISTRATIVE  SERVICES   MANAGER,  DIVISION  OF                                                                   
SUPPORT SERVICES,  DEPARTMENT OF NATURAL  RESOURCES testified                                                                   
in support of  the legislation. The legislation  would change                                                                   
the funding source  for the state recorder's  operations from                                                                   
program receipts to receipts supported  services. He observed                                                                   
that  HB  418 provided  authorization  for  use  of  customer                                                                   
receipts  to  support  their   programs.  He  emphasized  the                                                                   
difficulty  of the Recorder's  Office  to compete with  other                                                                   
programs  within the  Department  of Natural  Resources.  The                                                                   
Recorder's Office generates approximately  $4 million dollars                                                                   
in receipts.  The operating costs  for the Recorder's  Office                                                                   
is approximately $2.4 million dollars.                                                                                          
                                                                                                                                
Vice-Chair Bunde  questioned if  customers are being  charged                                                                   
too  much  if  revenues  generate   more  than  the  cost  of                                                                   
operations.  He added  that the  legislation  would take  the                                                                   
legislation  out  of  the  appropriation   process.  Mr.  Bus                                                                   
responded that  the change would  retain the requirement  for                                                                   
annual   legislative   authorization.   He   clarified   that                                                                   
recording is one  responsibility of the office  and archiving                                                                   
is  another.  There  are  many records  that  have  not  been                                                                   
archived.  Storage adds  to  the costs.  Municipalities  that                                                                   
have stored records  over the years are returning  books that                                                                   
must be  stored to  the state  of Alaska.  He noted  that the                                                                   
alternative is to close offices.                                                                                                
                                                                                                                                
Representative  Hudson noted  that there  are records  dating                                                                   
back  to the  1800's.  He spoke  in  support  of placing  the                                                                   
program under receipts supported services.                                                                                      
                                                                                                                                
In response  to a question  by Representative  Lancaster, Mr.                                                                   
Bus explained  that the  Palmer Office is  moving from  a 15-                                                                   
year  lease. The  increase  in population  over  the past  15                                                                   
years  has resulted  in an  overcrowded  facility. The  lease                                                                   
cost was  only .70  cents, since it  was negotiated  15 years                                                                   
ago. They  now have to pay  current market value.  The office                                                                   
requires more square footage at  increased cost. In addition,                                                                   
the  office has  inherited equipment  from  the Alaska  Court                                                                   
System  that has  no  maintenance agreements.  All  documents                                                                   
presented to the recorder's office  must be returned via mail                                                                   
to  the  customer.   Postal  fee  increases   have  added  to                                                                   
increased cost.                                                                                                                 
                                                                                                                                
Representative  Harris  noted that  there  are three  offices                                                                   
operated  by the  Alaska  Court  System: Seward,  Valdez  and                                                                   
Glennallen.  Court  activities   receive  priority  in  these                                                                   
offices. Mr. Bus  stressed the need to identify  personnel to                                                                   
fulfill this  function. The  Department of Natural  Resources                                                                   
operates the other 11 offices.                                                                                                  
                                                                                                                                
In response to  a question by Representative  Harris, Mr. Bus                                                                   
clarified  that  since  the  implementation  of  the  State's                                                                   
Recorder's  Office Index  System they  have provided  a daily                                                                   
on-line transfer index without missing a day.                                                                                   
                                                                                                                                
Vice-Chair Bunde  maintained that funding for  the Recorder's                                                                   
Office should be considered with  all other expenditures. Mr.                                                                   
Bus  responded that  detailed expenditures  are submitted  to                                                                   
the legislature.  Funds  are not dedicated  and must  receive                                                                   
legislative authorization.  The purpose  is to present  their                                                                   
true needs within  the competition of the  entire department.                                                                   
Co-Chair Mulder pointed  out that there is a  lot of activity                                                                   
in the Nome office, yet it was the first office cut.                                                                            
                                                                                                                                
Representative John Davies noted  that the fundamental policy                                                                   
question  is  should they  be  in  the category  of  receipts                                                                   
supported   services.  He  acknowledged   that  the   service                                                                   
generates  a lot  of fees  and the  customers are  frustrated                                                                   
because the service  cannot be advanced in  appropriate ways.                                                                   
The legislation would take away  the artificial cap issue and                                                                   
allow decisions to be based on the proper level of service.                                                                     
                                                                                                                                
Vice-Chair  Bunde   maintained  that   the  budget   for  the                                                                   
Recorder's Office would be increased  from $2.4 to $4 million                                                                   
dollars  by the  passage  of  the bill.  Representative  John                                                                   
Davies  argued  that  subcommittees would  still  review  the                                                                   
funding, but that the arbitrary cap would be removed.                                                                           
                                                                                                                                
Representative  Hudson stressed that  the change  would allow                                                                   
better bookkeeping.  Services would  be tied to  revenues. He                                                                   
pointed  out that  [under the  current  system] general  fund                                                                   
expenditures  are reduced to  an agency  that is earning  its                                                                   
own keep.                                                                                                                       
                                                                                                                                
Representative Whitaker  observed that the revenues  would be                                                                   
used to  provide better  service where  they are earned.  The                                                                   
legislation would provide a structural  change, by dedicating                                                                   
them to  the department where  they are produced.  He pointed                                                                   
out that the same  argument could be made in  the Division of                                                                   
Oil and  Gas and  expressed concern  that the dedication  may                                                                   
not be in the best interest [of the Legislature].                                                                               
                                                                                                                                
Mr.  Bus argued  that  workload is  directly  related to  the                                                                   
customer's action.                                                                                                              
                                                                                                                                
Representative  Harris spoke in  support of the  legislation.                                                                   
He  noted the  number of  complaints from  the public  sector                                                                   
regarding the  level of service. The Legislature  would still                                                                   
have  to approve  the  funds,  but it  would  not be  counted                                                                   
against  the  general  fund  component.  He  maintained  that                                                                   
accountability would continue  through the budgeting process.                                                                   
                                                                                                                                
Representative John  Davies argued that the  legislation does                                                                   
not create  a dedicated fund. He  felt that it is more  of an                                                                   
issue of  fund source: a  different type of program  receipt.                                                                   
It  would  be   a  sub  account  in  the  General   Fund  and                                                                   
expenditures would not be automatic.                                                                                            
                                                                                                                                
Representative Whitaker asked  if there is a current document                                                                   
backlog.  Mr. Bus  noted that  the statutes  require 24  hour                                                                   
indexing. The problem  occurs after the indexing.  There is a                                                                   
backlog  in archiving.  There are rooms  full of  information                                                                   
that  is not  available  to the  public  because  it must  be                                                                   
filmed  and  digitized.  He discussed  means  to  reduce  the                                                                   
backlog.                                                                                                                        
                                                                                                                                
Representative  Whitaker summarized that  there is  a backlog                                                                   
of work  that could  be solved with  an allocation  of funds.                                                                   
Mr.  Bus  observed  that capital  project  funding  has  been                                                                   
requested  for the  past several  years. The  funds have  not                                                                   
been sufficient  to keep up with  the level of  work. Capital                                                                   
requests  have been funded.  If the  legislation were  passed                                                                   
the level  of funding  would remain  at $2.5 million  dollars                                                                   
unless  the  court  offices  were  included.  The  Recorders'                                                                   
Office has  requested additional  operational funding,  which                                                                   
has not always been received.                                                                                                   
                                                                                                                                
Co-Chair Mulder  summarized that the issue differs  from past                                                                   
functions  because  it makes  more  money  than the  cost  of                                                                   
operations.  He expressed  confidence  that the  subcommittee                                                                   
chair would  watch expenditures  and added sympathy  for user                                                                   
groups that want a timely product for their fee.                                                                                
                                                                                                                                
Vice-Chair Bunde  maintained that the department  would still                                                                   
request additional  funds. He  argued against passage  of the                                                                   
legislation.                                                                                                                    
                                                                                                                                
Representative  Foster   MOVED  to  report  HB   108  out  of                                                                   
Committee  with  the  accompanying  fiscal  note.  Vice-Chair                                                                   
Bunde OBJECTED.                                                                                                                 
                                                                                                                                
A roll call vote was taken on  the motion to Move HB 108 from                                                                   
Committee.                                                                                                                      
                                                                                                                                
IN FAVOR: Davies,   Foster,    Harris,   Hudson,   Lancaster,                                                                   
          Whitaker, Croft, Williams, Mulder                                                                                     
OPPOSED: Bunde                                                                                                                  
                                                                                                                                
Representative Moses was absent from the vote.                                                                                  
                                                                                                                                
The MOTION PASSED (9-1).                                                                                                        
                                                                                                                                
HB  108  was REPORTED  out  of  Committee  with a  "do  pass"                                                                   
recommendation and with a previously  published fiscal impact                                                                   
note (#1) by the Department of Natural Resources.                                                                               
HOUSE BILL NO. 228                                                                                                            
                                                                                                                                
     "An Act  relating to  the offense  of selling  or giving                                                                   
     tobacco  to a  minor,  to the  accounting  of fees  from                                                                   
     business license  endorsements for tobacco  products, to                                                                   
     the  disclosure of  certain  confidential cigarette  and                                                                   
     tobacco product  information, to notification  regarding                                                                   
     a  cigarette   manufacturer's  noncompliance   with  the                                                                   
     tobacco   product   Master  Settlement   Agreement,   to                                                                   
     business  license  endorsements   for  sale  of  tobacco                                                                   
     products, to  citations and penalties for  illegal sales                                                                   
     of  tobacco products;  and  providing  for an  effective                                                                   
     date."                                                                                                                     
                                                                                                                                
Members were  provided with Amendment 1,  22LS0797\J.1, Ford,                                                                   
4/25/01 (copy on file).                                                                                                         
                                                                                                                                
Representative  Harris spoke in  support of the  legislation.                                                                   
He  observed that  the  state of  Alaska  received a  federal                                                                   
penalty that resulted in the loss  of $1.5 million dollars in                                                                   
federal receipts  because it was  out of compliance  with the                                                                   
federal  regulations  for the  sale  of tobacco  products  to                                                                   
minors.  The state  needs to  maintain a  20 percent  success                                                                   
rate. He explained that the legislation  stiffens the penalty                                                                   
for selling  tobacco to  a minor.  Business license  fees for                                                                   
endorsement of  tobacco sales would be increased.  The fiscal                                                                   
note is $487 thousand dollars.                                                                                                  
                                                                                                                                
TAPE HFC 01 - 95, Side B                                                                                                      
                                                                                                                                
Representative  Harris concluded  that the legislation  would                                                                   
allow  the  state  to retain  the  $1.5  million  dollars  in                                                                   
federal funds.                                                                                                                  
                                                                                                                                
ELMER LINDSTROM, SPECIAL ASSISTANT,  DEPARTMENT OF HEALTH AND                                                                   
SOCIAL SERVICES  spoke in  support of HB  228. He  noted that                                                                   
the  legislation   responds  to  federal   noncompliance  for                                                                   
federal fiscal year 1999. In the  absence of the bill and the                                                                   
attached  funding,  the  state  of  Alaska  would  lose  $1.5                                                                   
million  dollars  from  its  federal  substance  abuse  block                                                                   
grant. These  funds would  come out  of treatment of  alcohol                                                                   
abuse.  Substance Abuse  dollars are  being held hostile  for                                                                   
enforcement  activities related  to  the sell  of tobacco  to                                                                   
minors.  The  department  appealed  the  penalty.  While  the                                                                   
appeal was pending  Congress passed legislation  allowing for                                                                   
an  alternative  penalty.  The   alternative  penalty  allows                                                                   
states to put  the amount of funding reflected  in the fiscal                                                                   
note into  new tobacco enforcement  resources to  satisfy the                                                                   
federal  fiscal year 1999  Synar penalty  [the federal  Synar                                                                   
Amendment  requires  sales  to  minors  to be  less  than  20                                                                   
percent]. The  legislation would give support  to enforcement                                                                   
and   allow  the   noncompliance  numbers   to  be   reduced.                                                                   
Currently, 34  percent of minors  that attempted  to purchase                                                                   
tobacco were successful.                                                                                                        
                                                                                                                                
Vice-Chair  Bunde  spoke  in   support  of  enforcement,  but                                                                   
questioned  how  it  would  affect   small  communities.  Mr.                                                                   
Lindstrom  stressed  the  need   for  rural  enforcement.  He                                                                   
observed that  in communities  with less  than 9 outlets,  by                                                                   
and large  small rural  communities, 61  percent of  the time                                                                   
minors were able to purchase tobacco.  He observed that youth                                                                   
flown  in from  Anchorage were  able to  purchase tobacco  in                                                                   
these small rural communities.                                                                                                  
                                                                                                                                
Mr. Lindstrom  discussed the fiscal notes. He  explained that                                                                   
the  fiscal  notes  from  the  Department  of  Community  and                                                                   
Economic   Development,   Occupational  Licensing   and   the                                                                   
Department of Law are interagency  receipts that are included                                                                   
in  the Department  of  Health  and Social  Services'  $487.9                                                                   
thousand dollar  fiscal note. The general  fund appropriation                                                                   
would  be  made  to  the  Department  of  Health  and  Social                                                                   
Services and they  would contract for the services  needed to                                                                   
complete enforcement activities.                                                                                                
                                                                                                                                
MIKE  LIVINGSTON,  DETECTIVE,   ANCHORAGE  POLICE  DEPARTMENT                                                                   
testified via  teleconference in support of  the legislation.                                                                   
He has  conducted tobacco  compliance  checks since 1997.  He                                                                   
suggested the addition of language  on page 3, line 19: or an                                                                   
agent  or an  employee working  under the  endorsement of  an                                                                   
agent. He emphasized the need for education.                                                                                    
                                                                                                                                
Co-Chair Mulder pointed out that  the language in subject (1)                                                                   
on  page 3  is  modified  by subsection  (d)  on  page 3.  He                                                                   
concluded that an agent would  be responsible for a violation                                                                   
the  agent  or the  employee  of  the agent.  Mr.  Livingston                                                                   
pointed out that  the wording is included in  subsections (2)                                                                   
and  (3) and  argued  that subsection  (1)  would be  further                                                                   
clarified by its inclusion.                                                                                                     
                                                                                                                                
DAN  BRANCH, ASSISTANT  ATTORNEY GENERAL,  DEPARTMENT OF  LAW                                                                   
testified  that the  trigger was  contained  in the  previous                                                                   
section,  but  that the  additional  language  would make  it                                                                   
clear.                                                                                                                          
                                                                                                                                
He observed  that an amendment  to section 6,  subsection (1)                                                                   
would clarify the concern.                                                                                                      
                                                                                                                                
Mr.  Branch agreed  that  subsection (d)  is  the trigger  to                                                                   
subsection (1) on page 3. He acknowledged  that the inclusion                                                                   
of the language  recommended by Mr. Livingston  would further                                                                   
clarify that  if a person  has not had  a prior  violation or                                                                   
their clerk has not had a prior  violation then they would be                                                                   
treated as a  first offender. He discussed Amendment  1 (copy                                                                   
on file.) He  suggested that the amendment would  resolve the                                                                   
problem by clarifying that if  there were no prior offense or                                                                   
penalties under paragraph (2)  - (4) they would be treated as                                                                   
a first  offender and receive  the 20-day minimum  provision.                                                                   
The intent  was to  make sure that  people were covered  that                                                                   
had prior offenses older than  24 months. Those with offenses                                                                   
older than 24 months would be treated as first offenders.                                                                       
                                                                                                                                
Mr. Branch further  discussed amendment 1. He  noted that the                                                                   
Title 11  provides that vending  machines cannot be  used for                                                                   
the sale of  tobacco accept in bars and employee  break rooms                                                                   
where  they  are  not  accessible   to  minors.  Owners  must                                                                   
adequately supervise  the use of the machines.  The amendment                                                                   
would clarify that vending machine  owners would have to have                                                                   
an endorsement to  place a vending machine in a  bar. The bar                                                                   
owner would also have to have  an endorsement. Vendor machine                                                                   
companies  only have  to buy  one endorsement  for all  their                                                                   
vending  machines. Other  vendors  of tobacco  would have  to                                                                   
have an endorsement for each location  where tobacco is sold.                                                                   
Additional language  on line 27,  page 4 would  clarify that,                                                                   
during  the period  of suspension,  a  vending machine  owner                                                                   
could not operate a vending machine  at the location that the                                                                   
offense took place.  The machine in violation  would be taken                                                                   
out of service during the period  of suspension and could not                                                                   
be used in  another location. The original  legislation would                                                                   
have taken all  of the vendor's machines out  of business for                                                                   
the period of  the suspension. This provision  was removed in                                                                   
House Judiciary.  Amendment 1 is a compromise,  which strikes                                                                   
a fair  balance and  ensures that  the vending machine  owner                                                                   
could not  take the machine to  another location in  order to                                                                   
continue making money.                                                                                                          
                                                                                                                                
Representative  Harris  MOVED  to ADOPT  Amendment  1.  There                                                                   
being NO OBJECTION, it was so ordered.                                                                                          
                                                                                                                                
Co-Chair Mulder  MOVED to change  the funds source  on fiscal                                                                   
note  #3  to   tobacco  settlement  funds.   There  being  NO                                                                   
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
Representative Foster  MOVED to report CSHB 228  (FIN) out of                                                                   
Committee with  the accompanying fiscal note.  There being NO                                                                   
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
CSHB  228 (FIN)  was REPORTED  out  of Committee  with a  "do                                                                   
pass"  recommendation  and with  and a  previously  published                                                                   
zero  fiscal note  (#1)  by the  Department  of Revenue;  and                                                                   
three previously  published fiscal impact notes  (#2, #3, and                                                                   
#4):  Department  of Law,  Department  of Health  and  Social                                                                   
Services   and   Department   of   Community   and   Economic                                                                   
Development.                                                                                                                    
HOUSE BILL NO. 191                                                                                                            
                                                                                                                                
     "An  Act   authorizing  financing  for   certain  public                                                                   
     transportation projects;  giving notice of and approving                                                                   
     the entry into, and the issuance  of revenue obligations                                                                   
     that   provide    participation   in,    lease-financing                                                                   
     agreements  for   those  transportation   projects;  and                                                                   
     providing for an effective date."                                                                                          
                                                                                                                                
Co-Chair Williams provided members  with a proposed committee                                                                   
substitute, work  draft, 22-LS0766\F,  Cook 4/25/01  (copy on                                                                   
file.) He noted that the proposed  committee substitute would                                                                   
provide  funding  at  approximately  the same  level  as  the                                                                   
previous year's  appropriation of $350 million  dollars. [The                                                                   
legislation uses Garvee Bonds to support highway projects]                                                                      
                                                                                                                                
KURT    PARKAN,    DEPUTY   COMMISSIONER,    DEPARTMENT    OF                                                                   
TRANSPORTATION AND PUBLIC FACILITIES  testified in support of                                                                   
the   legislation.   He   noted  that   the   Department   of                                                                   
Transportation  and Public  Facilities'  proposal would  have                                                                   
funded   $425  million   dollars  worth   of  projects.   The                                                                   
legislation proposes projects  totaling $379 million dollars.                                                                   
All  projects   included  in  the  Garvee  package   must  be                                                                   
Statewide   Transportation    Improvement   Program    (STIP)                                                                   
eligible.                                                                                                                       
                                                                                                                                
Representative   John  Davies   observed  that  projects   in                                                                   
Fairbanks  did not follow  the Borough's  priority list.  Co-                                                                   
Chair Williams  observed that  his office discussed  projects                                                                   
with  the department.  Mr. Parkan  noted  that the  Borough's                                                                   
fifth priority,  a $10 million  dollar project for  roads and                                                                   
trails, was removed from the committee substitute.                                                                              
                                                                                                                                
In response  to a  question by  Vice-Chair Bunde, Mr.  Parkan                                                                   
reviewed changes to the proposed  Anchorage projects: project                                                                   
#11 was reduced  from $500 to $420 thousand  dollars; project                                                                   
#12 was  increased from  $500 to  $700 thousand dollars;  and                                                                   
project  #17  was  increased  from  $56  million  to  $58,180                                                                   
million.  These  changes  reflect  the  actual  cost  of  the                                                                   
projects.  A   $9  million  dollar  Seward   Highway  project                                                                   
recommended   by  the  department   was  not  included.   The                                                                   
department did  not include an additional $15  million dollar                                                                   
project for Abbott  Loop North Extension, which  was included                                                                   
in the proposed  committee substitute. He did  not know where                                                                   
the  project was  on  the STIP  but  observed  that there  is                                                                   
currently an  east Anchorage study  underway to look  at this                                                                   
part  of the  city. Once  the  study is  done the  long-range                                                                   
transportation plan would be modified.  This would affect the                                                                   
outcome of the project. Projects  need to be completed within                                                                   
five years of the sale of the bonds.                                                                                            
                                                                                                                                
HB  191  was   heard  and  HELD  in  Committee   for  further                                                                   
consideration.                                                                                                                  
HOUSE BILL NO. 234                                                                                                            
                                                                                                                                
     "An Act relating to the financing of construction and                                                                      
     renovation of certain public facilities; and providing                                                                     
     for an effective date."                                                                                                    
                                                                                                                                
Co-Chair Williams provided members  with a proposed committee                                                                   
substitute,  work draft  22-LS0863\O,  Cook, 4/25/01(copy  on                                                                   
file). He observed that the legislation  would fund ports and                                                                   
harbors, public  schools, and  the University of  Alaska with                                                                   
tobacco securitizations.  He noted that bonding  language for                                                                   
ports and harbors was added by  the Senate and objected to by                                                                   
communities.                                                                                                                    
                                                                                                                                
Vice-Chair Bunde  noted that he  was working on  an amendment                                                                   
to utilize the 20 percent that  had not been securitized as a                                                                   
revenue stream for tobacco cessation programs.                                                                                  
                                                                                                                                
Representative   Croft  expressed   support  for   Vice-Chair                                                                   
Bunde's  proposal.  He  also observed  that  the  legislation                                                                   
contains funding  for ports  and harbors  and stated  that he                                                                   
was more comfortable with using  the funding to support major                                                                   
maintenance and school construction.                                                                                            
                                                                                                                                
JOHN  BITNEY,  LEGISLATIVE LIAISON,  ALASKA  HOUSING  FINANCE                                                                   
CORPORATION  (AHFC),  DEPARTMENT  OF  REVENUE  spoke  to  the                                                                   
proposal  to use the  remaining funds  for tobacco  cessation                                                                   
programs.  He  explained that  North  Tobacco  Securitization                                                                   
Corporation  is a subsidiary  of AHFC.  The main question  to                                                                   
evaluate  is whether  or not  the  bonds are  taxable or  tax                                                                   
exempt. Projects included in the  legislation are tax-exempt.                                                                   
He thought that the cessation  programs would be at a taxable                                                                   
rate, which would lower the yield.                                                                                              
                                                                                                                                
Co-Chair   Mulder  observed  that   the  proposed   committee                                                                   
substitute proposes  $127 million  dollars and questioned  if                                                                   
the number was realistic based  on a 40 percent revenue sale.                                                                   
                                                                                                                                
Mr. Bitney  clarified that  the debt  schedule runs  to 2041,                                                                   
which is  longer than  one used for  the $93 million  dollars                                                                   
appropriated in FY01. He thought  that the number was doable.                                                                   
The  schedule   matches  the  legislation,  which   was  $250                                                                   
thousand dollars  more than  the Governor's. He  acknowledged                                                                   
that the coverage ratio is considered thin.                                                                                     
                                                                                                                                
HB  234  was   heard  and  HELD  in  Committee   for  further                                                                   
consideration.                                                                                                                  
HOUSE BILL NO. 244                                                                                                            
                                                                                                                                
     "An Act relating to a grant  of state land to the Denali                                                                   
     Borough  for  a  railroad  and utility  corridor  and  a                                                                   
     railroad   development  project;  repealing   provisions                                                                   
     relating  to a  grant of  a right-of-way  of land  for a                                                                   
     railroad and  utility corridor to the  Alaska Industrial                                                                   
     Development and  Export Authority; and providing  for an                                                                   
     effective date."                                                                                                           
                                                                                                                                
Co-Chair Williams provided members  with a proposed committee                                                                   
substitute,  work draft  22-LS0850\) Cook,  4/23/01 (copy  on                                                                   
file).                                                                                                                          
                                                                                                                                
REPRESENTATIVE JEANETTE  JAMES, SPONSOR testified  in support                                                                   
of the legislation.  She observed that the  legislation would                                                                   
implement  a  northern  [rail] access  into  Denali  National                                                                   
Park. It  would go approximately  40 miles from Healy  to the                                                                   
edge of  the park. The access  would be through  state lands.                                                                   
The proposal  has been around  for approximately  nine years.                                                                   
Legislation  was passed  in 1998 to  allow Alaska  Industrial                                                                   
Development  and Export  Authority  (AIDEA) to  bond for  the                                                                   
project.  The bonding  did not  occur.  The 1998  legislation                                                                   
would  have transferred  40,000  acres  within a  90,000-acre                                                                   
corridor  to the  Denali  Borough  to be  used  in the  lands                                                                   
selection.  The lands  remaining after  selection would  have                                                                   
been returned to the state. The  land transfer did not occur.                                                                   
She  concluded that  it  makes more  sense  to determine  the                                                                   
location of the  right-of-way prior to the  land transfer and                                                                   
to  assure  that  there  are no  existing  interests  in  the                                                                   
corridor. Under  the proposed  committee substitute  a survey                                                                   
would occur  prior to the land  transfer. After the  route is                                                                   
determined approximately 3,500  acres would be transferred to                                                                   
the Denali  Borough and  would become  part of their  borough                                                                   
entitlement from  the state.  She acknowledged objections  to                                                                   
the  legislation.  She noted  that  there are  concerns  that                                                                   
additional  access is  not needed  or that  a southern  route                                                                   
could be used.                                                                                                                  
                                                                                                                                
TAPE HFC 01 - 96, Side A                                                                                                      
                                                                                                                                
In  response   to  a   question  by  Representative   Davies,                                                                   
Representative  James  clarified  that  the  lands  would  be                                                                   
disposed  under  the  same  proposal   as  entitlements.  She                                                                   
pointed out that  an environmental impact statement  would be                                                                   
needed  before  a railroad  could  be  built. Land  would  be                                                                   
disposed as part  of the Denali Borough's  state entitlement.                                                                   
The  borough  has  45,000 acres  in  entitlements,  of  which                                                                   
approximately 20,000 have been received.                                                                                        
                                                                                                                                
MARY   KAYE  HESSION,   DEPARTMENT   OF  NATURAL   RESOURCES.                                                                   
ANCHORAGE, testified  via teleconference. She noted  that the                                                                   
bill  requires   the  Department  of  Natural   Resources  to                                                                   
transfer  up to  3,500  acres  of state  land  to the  Denali                                                                   
Borough for a future railroad  towards Kantishna. In order to                                                                   
reach  Kantishna, the  railroad  will need  to continue  west                                                                   
across  National  Park lands.  The  Borough  and the  private                                                                   
Kantishna Holdings  Inc. would work to identify  and survey a                                                                   
railroad route across this land.                                                                                                
                                                                                                                                
The  proposed  committee substitute  takes  care  of many  of                                                                   
department's concerns  regarding the original bill,  and is a                                                                   
more   efficient  approach   than  the   original  bill.   In                                                                   
particular, the department supports  inclusion of the land as                                                                   
part of the Borough's existing municipal land entitlement.                                                                      
                                                                                                                                
Ms.  Hession observed  that Department  of Natural  Resources                                                                   
believes that  more effort  is needed  to determine  the best                                                                   
access route  into the  North Side  of Denali National  Park,                                                                   
and a railroad  in this corridor  may or may not be  the best                                                                   
approach.  The Department  of Natural  Resources is aware  of                                                                   
two other  planning efforts that  should be coordinated  with                                                                   
the railroad  project. The  Department of Transportation  and                                                                   
Public  Facilities  is  slated  to receive  $1.5  million  in                                                                   
federal funding for an Environmental  Assessment of the North                                                                   
Side access. This  effort is the subject of  an appropriation                                                                   
for the  state matching funds,  which is contained  in Senate                                                                   
Bill 3. The National Park Service  has also invited the state                                                                   
to participate  in a  study of North  side access  issues and                                                                   
alternatives.  The   proposed  railroad  route   would  cross                                                                   
National  Park  Service  land  and cannot  be  built  without                                                                   
National Park Service concurrence.  The Department of Natural                                                                   
Resources  believes that  it is  essential to  work with  the                                                                   
National Park service  to achieve an agreed  upon access plan                                                                   
for Denali National  Park. She emphasized that  no unilateral                                                                   
state or  borough effort  can achieve  access into  the park,                                                                   
unless  the National  Park Service  is a  participant in  the                                                                   
process.                                                                                                                        
                                                                                                                                
Ms.  Hession  noted  that  the  department's  second  concern                                                                   
regards what  rights the bill  grants to Kantishna  Holdings,                                                                   
Inc.  Once the  corridor is  identified,  the implication  is                                                                   
that  Kantishna  Holdings,  Inc., would  have  the  exclusive                                                                   
right to  build a  railroad in  the corridor. The  department                                                                   
believes that the  land should be conveyed to  the Borough so                                                                   
that other uses  or developers could make use of  the land as                                                                   
well,  not  only  for  the  purpose   of  enabling  Kantishna                                                                   
Holdings, Inc. to develop a railroad  and related facilities,                                                                   
as stated in Section 1(a).                                                                                                      
                                                                                                                                
Ms. Hession  discussed the  Department of Natural  Resources'                                                                   
fiscal  note.  The  department  would need  to  provide  land                                                                   
status  information,  identify  valid  existing  rights,  and                                                                   
participate   in  the  corridor   selection  process.   Costs                                                                   
associated with  the actual land  transfer were  included for                                                                   
FY 2006.                                                                                                                        
                                                                                                                                
Representative  John  Davies  questioned  if  the  conveyance                                                                   
would involve a best interest  finding. Ms. Hession explained                                                                   
that the  conveyance for land  entitlements is  basically the                                                                   
same  as the  normal  state land  disposal  process. A  draft                                                                   
decision  would receive  public review  and comment before  a                                                                   
final  decision  is made.  The  most  significant  difference                                                                   
would be in regards to the transfer  of the deed, which would                                                                   
not occur before  changes to the Tanana Basin  Area Plan were                                                                   
made. The public comment process is nearly identical.                                                                           
                                                                                                                                
Representative  Croft referred to  subsection (d) on  page 2,                                                                   
line 14.  He noted that other  provisions of AS 29.65  do not                                                                   
apply.  He questioned  what public process  would apply.  Ms.                                                                   
Hession  responded  that  the  public  process  is  primarily                                                                   
contained  AS  38. Under  subsection  (d) the  Department  of                                                                   
Natural Resources would not have  to check the classification                                                                   
of the  land for  the grant  program. She  did not  know what                                                                   
other  provisions  of  Title  29 would  be  exempted  by  the                                                                   
language. There are no exemptions  on Title 38, which governs                                                                   
public notice and comment.                                                                                                      
                                                                                                                                
Representative Croft noted that  the legislation provides the                                                                   
grant for the  purpose of supporting economic  development by                                                                   
Kantishna  Holdings, Inc. He  asked what  would occur  if the                                                                   
legislation were  passed and the Denali Borough  decided that                                                                   
they  wanted  to  deal  with   another  entity.  Ms.  Hession                                                                   
acknowledged  that  the  department  is  concerned  that  the                                                                   
Boroughs' hands might be tied  and its ability to deal with a                                                                   
competitor  or  use the  land  for  other purposes  would  be                                                                   
limited.  The   department's  hope   was  that  the   Borough                                                                   
government  would have  as much  freedom as  possible to  use                                                                   
their municipal land entitlement.                                                                                               
                                                                                                                                
Representative James noted that  the Kantishna Holdings, Inc.                                                                   
is   a  private   rural   corporation   that  was   developed                                                                   
specifically for  the project.  They would provide  the money                                                                   
and own and operate the project.                                                                                                
                                                                                                                                
DAVID   BRAUN,  HEALY,   testified   via  teleconference   in                                                                   
opposition  to HB  244.  He maintained  that  the Borough  is                                                                   
trying to pull a "fast one." He  maintained that the bill has                                                                   
very little to  do with a railroad. It is only  a vehicle for                                                                   
the Denali  Borough to bypass  state government,  and acquire                                                                   
real  estate that  has  previously  been denied  them.  "This                                                                   
railroad  will   likely  not  get  built  for   economic  and                                                                   
political reasons,  but the Borough  Assembly will  still get                                                                   
land in  the wolf townships that  they have coveted  for many                                                                   
years."                                                                                                                         
                                                                                                                                
Mr.  Braun   questioned  why   the  land  is   being  handled                                                                   
differently from other entitlements.  He pointed out that the                                                                   
first draft  of HB  244 was not  available until  the Borough                                                                   
Assembly meeting  of April  7, 2001.  He maintained  that the                                                                   
bill has moved at an accelerating  pace. He asserted that the                                                                   
spirit of  the 24-hour rule  has been violated.  He disagreed                                                                   
with statements  that  only those  who live  in the area  are                                                                   
opposed to  the plan.  "The State of  Alaska itself  has kept                                                                   
development out  of these townships  for decades.  There have                                                                   
been no public  hearings on the matter;  Representative James                                                                   
has said that she will meet with  the public in the summer to                                                                   
reassure  us -  after it  is all  done.  I would  ask you  to                                                                   
remember  your  own  response  when  the  Federal  Government                                                                   
imposes its will on the State of Alaska."                                                                                       
                                                                                                                                
Mr. Braun  argued that  it is not  clear that developing  the                                                                   
wolf  townships is  in  the best  economic  interests of  the                                                                   
state. He  stated that  many residents  and tourists  have no                                                                   
interest in the  national park experience and  felt that many                                                                   
more people visit the Wolf Townships  than are turned away by                                                                   
the parks bus system.                                                                                                           
                                                                                                                                
Co-Chair  Williams stated  that  he did  not  think that  the                                                                   
legislation would  pass during the first session  of the 22nd                                                                   
Legislature.                                                                                                                    
                                                                                                                                
Representative Croft summarized  that the Borough has request                                                                   
the  land  in   the  past  and  that  requirements   on  land                                                                   
entitlements have  prevented them  from getting it.  He asked                                                                   
what were  the Borough's prior  attempts to get the  land and                                                                   
what  prevented  them  from receiving  the  land.  Mr.  Healy                                                                   
recalled statements at Borough  meetings that the borough had                                                                   
been blocked from applying for selection of the lands.                                                                          
                                                                                                                                
Representative Croft  summarized that the Denali  Borough had                                                                   
asked for  the land as  an entitlement  in the past  and that                                                                   
some  section of  the law  regarding entitlements  prohibited                                                                   
them from getting it. Mr. Braun  stated that it was suggested                                                                   
that  the  land  was off  limits  to  the  Borough  selection                                                                   
process.  Representative  James  acknowledged  that  politics                                                                   
were involved.                                                                                                                  
                                                                                                                                
LINDA  PAGANELLI,  HEALY,  testified  via  teleconference  in                                                                   
opposition to the legislation.  She stated that she supported                                                                   
efforts to  address solutions  to park  access, she  does not                                                                   
support the  North Access contained  in HB 244.  She stressed                                                                   
that  the North  Access proposal  speculates  that the  route                                                                   
will  continue through  the National  Park  to Kantishna  and                                                                   
that the  demand will exist  for year around  operation, that                                                                   
350-900 permanent  jobs will be created and  that the present                                                                   
40 mile rail  route, which would provide  minimum opportunity                                                                   
for mountain  or wildlife view  will provide visitors  with a                                                                   
satisfactory experience.  She maintained that  a demonstrated                                                                   
need for  the north  access should be  clearly defined  and a                                                                   
route  that  best  serves  the  state's  interest  should  be                                                                   
identified.  The Department  of  Natural Resources,  National                                                                   
Park Service  and the United  States Congress  recognize that                                                                   
the  area in  question  serves as  an  important habitat  for                                                                   
wildlife.  She  asserted  that  the lands  should  remain  in                                                                   
public ownership  and not be  transferred to the  Borough for                                                                   
purposes  of  economic  development. Changes  to  the  Tanana                                                                   
Basin  Area Plan  should  follow  procedures  as outlined  in                                                                   
statute.  She  expressed concern that the  legislation grants                                                                   
sole  rights for  project  development  to one  company.  She                                                                   
questioned  where  the  state  of  Alaska's  interest  is  in                                                                   
bestowing   this  "sweetheart   deal"  and  a   legislatively                                                                   
mandated seat  at the planning  table to Kantishna  Holdings,                                                                   
Inc. There  are safeguards in  the Alaska State  Constitution                                                                   
to  protect citizens  from individuals  that  may be  serving                                                                   
their own self-interest by providing  a legislative guarantee                                                                   
to a specified contractor. The  Denali Borough government has                                                                   
no planning  experience. Local government officials  would be                                                                   
relying  on a  private  consulting  firm and  developer  with                                                                   
their own  undisclosed agendas.  She questioned if  Kantishna                                                                   
Holdings,  Inc. would  be able  to make good  on their  claim                                                                   
that zero public funds would be  needed. She asked what would                                                                   
occur if  the company abandons  the project. She  recommended                                                                   
that the  legislation contain a  sunset date as  discussed in                                                                   
the  House  Transportation  Committee hearing  on  April  17,                                                                   
2001, which would allow the land  to revert back to the state                                                                   
if no development occurs by a specific date.                                                                                    
                                                                                                                                
In   response   to   a   question    by   Vice-Chair   Bunde,                                                                   
Representative  James noted that  the Borough  has a  bed tax                                                                   
and a severance tax on the Usibelli Coal Mine.                                                                                  
                                                                                                                                
NANCY  BALE,  ANCHORAGE,  testified   via  teleconference  in                                                                   
opposition  to  the legislation.  She  pointed  out that  the                                                                   
legislation  does   not  provide  a  safeguard   against  the                                                                   
building of roads  as a consequence of  railroad construction                                                                   
and subsequent  development.  The land  grant of 3,500  acres                                                                   
would  be  in  violation  of   the  Tanana  Basin  Area  Plan                                                                   
recommendation  is accompanied  by  no covenants  prohibiting                                                                   
the building  of roads associated with  economic development.                                                                   
There  is  no  guarantee  of a  best  interest  finding.  She                                                                   
maintained  that development  would  be  inevitable once  the                                                                   
corridor is open.                                                                                                               
                                                                                                                                
Ms. Bale  referred to the  North Access Feasibility  Study of                                                                   
1997.  The  cost of  building  a  railroad according  to  the                                                                   
document  is staggering.  She  maintained  that  a more  cost                                                                   
effective  hotel/development scheme  along the Parks  Highway                                                                   
would involve  less potential  resource damage, more  control                                                                   
and less  expenditure of state  funds. She urged  legislators                                                                   
to evaluate  the Parks Highway  corridor first. The  State of                                                                   
Alaska  is  at  this  time  embarking  on  a  study  of  this                                                                   
corridor. "Let us  step back and have a look  at what already                                                                   
needs  fixing   and  comprehensive   planning,  with   public                                                                   
involvement,  before  we fund  a  private contractor  with  a                                                                   
giveaway of sensitive lands."                                                                                                   
                                                                                                                                
In  response to  a  question by  Vice-Chair  Bunde, Ms.  Bale                                                                   
explained  that the  land in question  is a  feedlot for  the                                                                   
park caribou  and their predators.  There are no  controls on                                                                   
the legislation.                                                                                                                
                                                                                                                                
JOE  FIELDS, PRESIDENT,  KANTISHNA  HOLDINGS INC.,  ANCHORAGE                                                                   
testified  in  support. He  stated  that  it is  still  their                                                                   
intent  not to  use public  money on  the construction  site.                                                                   
Government  has proposed  bringing money  to the project.  He                                                                   
stressed  that they  are trying  to  create a  public/private                                                                   
relationship   and  provide  environmental   access   to  the                                                                   
community. The  public process  would be fully  utilized. The                                                                   
proposal   would  generate  new   economic  development.   He                                                                   
stressed  that   the  intent   is  to  create   new  economic                                                                   
development  in a region  that was  bypassed by the  pipeline                                                                   
and missile defense proposals.                                                                                                  
                                                                                                                                
In response  to a  question by  Vice-Chair Bunde, Mr.  Fields                                                                   
noted  that the  Denali  Borough Assembly  expressed  support                                                                   
through a resolution  passed in 1993. On April  18 [2001] the                                                                   
Assembly  expressed unanimous  support for  the proposal.  He                                                                   
added  that  the  current  road is  a  corridor  between  two                                                                   
wilderness  areas   of  the  Park.   The  park   road  serves                                                                   
approximately  4,000 of  6.4 million  acres.  The south  side                                                                   
development proposal  would not  provide any access  into the                                                                   
Park.                                                                                                                           
                                                                                                                                
Representative  James  pointed out  that  there  was a  $1.32                                                                   
million  dollar federal  appropriation available  for an  EIS                                                                   
study.  The Senate  has  included  funding in  the  operating                                                                   
budget to provide the state match.                                                                                              
                                                                                                                                
Representative  Foster  MOVED  to  ADOPT  proposed  committee                                                                   
substitute,  work  draft  22-LS0850\)  Cook,  4/23/01.  There                                                                   
being NO OBJECTION, it was so ordered.                                                                                          
                                                                                                                                
Representative Hudson MOVED to  ADOPT Amendment 1 provided by                                                                   
Representative  James  (copy  on  file.)  Amendment  1  would                                                                   
Eliminate "By  September 1 2002"  on page 1, line  14; insert                                                                   
"except where  needed for  construction or for  environmental                                                                   
considerations   or    for   required   ancillary    facility                                                                   
development"  on page  2, line  2 and replace  " September  1                                                                   
2002" with  "upon the submission  of the survey"  There being                                                                   
NO OBJECTION, it was so ordered.                                                                                                
                                                                                                                                
Representative  Croft  expressed  concern with  the  language                                                                   
"purpose of  supporting economic  development in  the borough                                                                   
by enabling Kantishna  Holdings, Inc. and its  successors and                                                                   
assigns in interest."  He felt that the language  would allow                                                                   
litigation  based on  a challenge  to the  purpose and  would                                                                   
provide difficulties if a further partnership were engaged.                                                                     
                                                                                                                                
Representative   James  understood   Representative   Croft's                                                                   
concerns but did not share them.                                                                                                
                                                                                                                                
Representative  Croft spoke  in support  of the deletion.  He                                                                   
stressed that it  would provide a broader authority  and make                                                                   
it less susceptible to challenge.  Representative Croft MOVED                                                                   
to Adopt Amendment  2: delete "for the purpose  of supporting                                                                   
economic  development in  the borough  by enabling  Kantishna                                                                   
Holdings, Inc.  and its successors  and assigns  in interest"                                                                   
on page 1, lines 9 - 11.                                                                                                        
                                                                                                                                
Representative  John Davies questioned  why would  state land                                                                   
be  provided  for  the  purpose   of  design.  Representative                                                                   
Whitaker noted  that there  are significant costs  associated                                                                   
with the design aspect of the  project and suggested that the                                                                   
land should be available as assurance.                                                                                          
                                                                                                                                
Representative Foster OBJECTED to Amendment 2.                                                                                  
                                                                                                                                
Representative James  did not think that the  amendment would                                                                   
kill the bill, but stated that  she would prefer to leave the                                                                   
language in the legislation.                                                                                                    
                                                                                                                                
Representative Croft WITHDREW Amendment 2.                                                                                      
                                                                                                                                
TAPE HFC 01 - 96, Side B                                                                                                      
                                                                                                                                
Representative  Foster MOVED  to report  CS out of  Committee                                                                   
with the accompanying fiscal note.  There being NO OBJECTION,                                                                   
it was so ordered.                                                                                                              
                                                                                                                                
CSHB  244 (FIN)  was REPORTED  out  of Committee  with a  "do                                                                   
pass" recommendation  and with a previously  published fiscal                                                                   
impact (#1) note by the Department of Natural Resources.                                                                        
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 4:45 p.m.                                                                                          
                                                                                                                                
                                                                                                                                

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