Legislature(2015 - 2016)HOUSE FINANCE 519

04/04/2016 01:30 PM FINANCE

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01:32:29 PM Start
01:33:33 PM Confirmation Hearing: Alaska Mental Health Trust Authority: Laraine Derr
01:46:51 PM HB254
03:07:54 PM HB156
04:30:17 PM HB209
04:53:03 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Confirmation Hearing: TELECONFERENCED
Alaska Mental Health Trust Authority
Moved HB 254 Out of Committee
Moved CSHB 156(EDC) Out of Committee
Moved CSHB 209(FIN) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                       April 4, 2016                                                                                            
                         1:32 p.m.                                                                                              
1:32:29 PM                                                                                                                    
CALL TO ORDER                                                                                                                 
Co-Chair   Thompson  called  the   House  Finance   Committee                                                                   
meeting to order at 1:32 p.m.                                                                                                   
MEMBERS PRESENT                                                                                                               
Representative Mark Neuman, Co-Chair                                                                                            
Representative Steve Thompson, Co-Chair                                                                                         
Representative Dan Saddler, Vice-Chair                                                                                          
Representative Bryce Edgmon                                                                                                     
Representative Les Gara                                                                                                         
Representative Lynn Gattis                                                                                                      
Representative David Guttenberg                                                                                                 
Representative Scott Kawasaki                                                                                                   
Representative Cathy Munoz                                                                                                      
Representative Lance Pruitt                                                                                                     
Representative Tammie Wilson                                                                                                    
MEMBERS ABSENT                                                                                                                
ALSO PRESENT                                                                                                                  
Laraine  Derr, Alaska  Mental Health  Trust Authority;  Steve                                                                   
Handy,  Staff,  Representative  Louise Stutes;  Fred  Parady,                                                                   
Deputy Commissioner,  Department of Commerce,  Community, and                                                                   
Economic  Development;  Kris   Curtis,  Legislative  Auditor,                                                                   
Alaska  Division   of  Legislative   Audit;  Mark   Richards,                                                                   
Executive    Director,    Resident   Hunters    of    Alaska;                                                                   
Representative  Wes  Keller,   Sponsor;  Margaret  MacKinnon,                                                                   
Director,  Assessment   and  Accountability,   Department  of                                                                   
Education  and  Early  Development;  Betty  Walters,  Interim                                                                   
Deputy  Commissioner,  Department   of  Education  and  Early                                                                   
Development;  Brodie  Anderson, Staff,  Representative  Steve                                                                   
Anderson; Representative  Neil Foster, Sponsor,  District 39;                                                                   
Paul    Labolle,   Staff,    Representative   Neil    Foster;                                                                   
Representative Lora Reinbold;                                                                                                   
PRESENT VIA TELECONFERENCE                                                                                                    
Sam   Rohrer,   President,   Alaska    Professional   Hunters                                                                   
Association,  Kodiak;  Paul  Chervenak,  Self,  Kodiak;  Dick                                                                   
Rohrer,  Self,   Kodiak;  Kelly  Vrem,  Chairman,   Big  Game                                                                   
Commercial  Services Board, Sutton;  Virgil Umphenour,  Self,                                                                   
Fairbanks;   Bill  Griffith,   Department  of   Environmental                                                                   
HB 156    SCHOOL ACCOUNTABILITY MEASURES; FED. LAW                                                                              
          HB  156 was REPORTED  out of  committee with  a "do                                                                   
          pass"   recommendation   and  with   a   previously                                                                   
          publish indeterminate fiscal note: FN1 (EED).                                                                         
HB 209    WATER AND SEWER ADVISORY COMMITTEE                                                                                    
          CSHB 209  was REPORTED out of committee  with a "do                                                                   
          pass"   recommendation   and  with   a   previously                                                                   
          published zero fiscal note: FN1 (CRA).                                                                                
HB 254    EXTEND BIG GAME COMMERCIAL SERVICES BOARD                                                                             
          HB  254 was REPORTED  out of  committee with  a "do                                                                   
          pass" recommendation  and with a new  fiscal impact                                                                   
          note by  the Department of Commerce,  Community and                                                                   
          Economic Development.                                                                                                 
CONFIRMATION HEARING:  ALASKA MENTAL HEALTH  TRUST AUTHORITY:                                                                   
LARRINE DERR                                                                                                                    
Co-Chair Thompson reviewed the agenda for the day.                                                                              
1:33:33 PM                                                                                                                    
^CONFIRMATION   HEARING:    ALASKA   MENTAL    HEALTH   TRUST                                                                 
AUTHORITY: LARAINE DERR                                                                                                       
LARAINE  DERR, ALASKA MENTAL  HEALTH TRUST  AUTHORITY,  was a                                                                   
Juneau resident  and had  been on the  board since  2005. She                                                                   
had been appointed  following a term that had  begun 5 months                                                                   
prior to  her being  nominated to the  board. She  served for                                                                   
just under  2 full  terms. She explained  that when  she came                                                                   
up  for  reappointment  the  attorney  general's  office  had                                                                   
issued a  finding that she could  serve for another  term. By                                                                   
law a  person was  entitled to  serve 2  full terms.  She was                                                                   
recommended for  reappointment in the previous  year. She had                                                                   
served in the  capacity of the board's Finance  Chair for the                                                                   
majority of her  tenure. She advocated the importance  of the                                                                   
Alaska Mental  Health Trust to  its beneficiaries.  The Trust                                                                   
had  worked  cooperatively  with  the  legislature  over  the                                                                   
years in  serving the  state's beneficiaries.  It was  a very                                                                   
rewarding job and  sometimes very heart rending.  She enjoyed                                                                   
her time  in the position  and would  be honored to  serve an                                                                   
additional term.                                                                                                                
Ms. Derr provided  further details about her  background. She                                                                   
had served in  various parts of government  including working                                                                   
for  the  Department  of  Education   and  Early  Development                                                                   
(DEED)  doing a  statewide  school  finance study.  She  also                                                                   
worked  for   the  Juneau  School   District.  She   was  the                                                                   
Commissioner  of Revenue under  Governor Hickel,  then worked                                                                   
for the  University of Alaska  as the  head of the  School of                                                                   
Business   and  Public   Management.   She   went  from   the                                                                   
university  to  the Hospital  and  Nursing  Home  Association                                                                   
running the Boards  and Commissions Office for  7 years under                                                                   
Governor  Murkowski.  She  had  personal  experience  dealing                                                                   
with  mental illness:  she had  two step  sons who  committed                                                                   
suicide. She also  had a step grandson who  was on medication                                                                   
for  mental illness.  She had  experience in  several of  the                                                                   
different  beneficiary  groups  that the  Trust  served.  She                                                                   
made herself available for questions.                                                                                           
Co-Chair  Thompson  relayed that  Representative  Gattis  and                                                                   
Representative  Pruitt had  joined the  meeting. All  members                                                                   
were in attendance.                                                                                                             
Vice-Chair  Saddler asked  where  she saw  the Alaska  Mental                                                                   
Health  Trust's  mission  diverge  from the  mission  of  the                                                                   
Department  of Health  and Social  Services or  the State  of                                                                   
Ms.  Derr responded  that  one of  the  criticisms the  Trust                                                                   
frequently received  from the legislature was  that in trying                                                                   
new  ways  of   serving  its  beneficiaries  it   would  turn                                                                   
successful programs  over to the  legislature for  funding in                                                                   
the regular budget  for DHSS. She thought the  Trust could be                                                                   
more flexible  and provide additional  funds as  new programs                                                                   
became  available. She  suggested  that the  trust should  be                                                                   
more nibble and able to serve new programs.                                                                                     
Vice-Chair    Saddler   mentioned    the   Medicaid    reform                                                                   
legislation, SB  74. He asked  for her thoughts on  where the                                                                   
trust  would  make  the most  contribution  to  the  Medicaid                                                                   
reform process.                                                                                                                 
Ms. Derr  responded that there  had been a lot  of discussion                                                                   
about  the funding  of the  Medicaid  reform bill.  It was  a                                                                   
significant  amount of  money. She mentioned  that the  Trust                                                                   
had reviewed budgets  from previous years and  directed staff                                                                   
to look  at different  possibilities.  In looking at  budgets                                                                   
going  forward  and  looking at  revenues  from  the  Trust's                                                                   
land's division,  the Trust  concluded  it could support  the                                                                   
Medicaid  reform  for  3  years.  Therefore,  The  Trust  had                                                                   
dedicated  funds   for  at  least  3  years   to  assist  the                                                                   
1:38:59 PM                                                                                                                    
Vice-Chair   Saddler   reported    having   been   a   Deputy                                                                   
Commissioner  for Boards  and Commissions.  He asked  for her                                                                   
thoughts about  serving in  a board position  for as  long as                                                                   
she  had. He  asked  if she  could remain  a  voice with  new                                                                   
ideas and innovative  directions for the board  after serving                                                                   
for a decade.                                                                                                                   
Ms. Derr relayed  her struggle trying to make  a decision, as                                                                   
Governor Walker had  replaced her when he took  office in the                                                                   
previous year.  She was replaced  with a new member.  She had                                                                   
been  involved   for  so  long  that  there   were  different                                                                   
programs and  policies that had  been put into place  she was                                                                   
able to  observe their success.  The person who  had replaced                                                                   
her   the  preceding   year   was   not  confirmed   by   the                                                                   
legislature. As  a result, she  bounced back onto  the board.                                                                   
She reported  being really  pleased to be  back on  the Board                                                                   
and  was happy  to be  able to  provide some  history to  new                                                                   
board members.  She added that if  she did not have  many new                                                                   
ideas she  would at least  be able to  see the completion  of                                                                   
the ones that had been instituted.                                                                                              
1:41:13 PM                                                                                                                    
Representative  Munoz thanked  Ms. Derr  for her service  and                                                                   
elaborated  that she had  served the  community of  Juneau in                                                                   
many  ways and  received  some  of the  highest  recognitions                                                                   
that   Juneau  had   to  offer   including   the  "Women   of                                                                   
Distinction  Award," as  well as an  honorary doctorate.  She                                                                   
was pleased  to support her  reappointment to the  board. She                                                                   
asked about  the land  in the  sub port  area. She wanted  an                                                                   
update of what the board intended to do with the property.                                                                      
Ms. Derr responded  that the sub port used to  be across from                                                                   
the Prospector Hotel  on the waterfront. The  Trust owned the                                                                   
property  and had  had many  opportunities to  give it  away.                                                                   
She relayed having  to remind folks that the  property was an                                                                   
asset and used  to support the Trust's program.  The property                                                                   
was currently on  the market for purchase. The  Department of                                                                   
Natural Resources' Lands office handled all offers.                                                                             
Representative  Gara  thanked  Ms.  Derr  for  her  important                                                                   
work.  He believed  that  if  she remained  passionate  about                                                                   
doing  the  job then  he  encouraged  her  to  do so  and  he                                                                   
supported her. Ms. Derr thanked Representative Gara.                                                                            
Representative  Guttenberg   pointed  out  that   Boards  and                                                                   
Commissions had  forwarded her  application to the  Permanent                                                                   
Fund Board, which was currently in front of members.                                                                            
Ms.  Derr remarked  that  her application  was  from a  while                                                                   
ago. She  had served  on the  Permanent Fund  Board when  she                                                                   
was  previously   the  commissioner  of  the   Department  of                                                                   
Co-Chair Thompson OPENED public testimony.                                                                                      
Co-Chair Thompson CLOSED public testimony.                                                                                      
Co-Chair Thompson  suggested advancing  Ms. Derr's name  to a                                                                   
joint floor session for consideration. No members objected.                                                                     
1:44:49 PM                                                                                                                    
AT EASE                                                                                                                         
1:46:44 PM                                                                                                                    
1:46:51 PM                                                                                                                    
Co-Chair  Thompson invited  Representative  Stutes' staff  to                                                                   
the table.                                                                                                                      
HOUSE BILL NO. 254                                                                                                            
     "An Act extending  the termination date of  the Big Game                                                                   
     Commercial   Services  Board;   and  providing   for  an                                                                   
     effective date."                                                                                                           
1:46:51 PM                                                                                                                    
STEVE HANDY, STAFF, REPRESENTATIVE LOUISE STUTES, read from                                                                     
a prepared statement:                                                                                                           
     What the bill does:                                                                                                        
     ·  House Bill  254,  An  Act extending  the  termination                                                                   
        date of the Big Game Commercial Services Board and                                                                      
        providing for an effective date, extends sunset date                                                                    
        of the Big Game Commercial Service Board's                                                                              
        (BGCSB) three years from June 30, 2016, to June 30,                                                                     
     Who the BGCSB is:                                                                                                          
     ·  The   BGCSB   is   staffed   by   the   Division   of                                                                   
        Corporations, Business and Professional Licensing                                                                       
        and consists of;                                                                                                        
        · two licensed Registered Guide                                                                                         
        · two licensed Transporters                                                                                             
        · two private landholders                                                                                               
        · two public members                                                                                                    
        · one member from the Board of Game.                                                                                    
     What the BGCSB does:                                                                                                       
        · The BGCSB provides a legislative command to                                                                           
          assist   in  resource  conservation   and  consumer                                                                   
          protection.  The  Board develops  professional  and                                                                   
          ethical  standards, administers exams,  makes final                                                                   
          licensing   decisions   and  takes   civil   action                                                                   
          against persons who violate regulations.                                                                              
        · Board members are appointed by the Governor and                                                                       
          confirmed by the Legislature.                                                                                         
     Why should the BGCSB be extended?                                                                                          
     The  Board's  regulated  professions  include  Assistant                                                                   
     Guides,     Class                                                                                                          
     According  to the  report  titled  "Economic Impacts  of                                                                   
     Guided Hunting in Alaska" prepared for the Alaska                                                                          
     Professional  Hunters Association  by McDowell  Group, a                                                                   
     research and consulting firm;                                                                                              
        · Guided hunting in Alaska accounted for a total of                                                                     
          2,210 jobs and $35 million in total labor income                                                                      
          in 2012, including all direct, indirect and                                                                           
          induced impacts.                                                                                                      
        · Guided hunting generated a total of $78 million                                                                       
          in economic activity in Alaska in 2012.                                                                               
        · Guided hunters purchased nearly $2 million in                                                                         
          hunting license and game tags.                                                                                        
     Due  to oversight  by  the  legislature,  the Board  was                                                                   
     allowed  to sunset before  and this caused  catastrophic                                                                   
     effects.  It   was  the  sunset  that   contributed  the                                                                   
     financial  difficulties  reflected  in  the  Legislative                                                                   
     Audit  before  you.  However,  in  December,  2015,  the                                                                   
     board was reinstated by the legislature.                                                                                   
     The Big Game  Commercial Services Board is  essential to                                                                   
     the safety  of hunters,  guides and transporters  coming                                                                   
     to Alaska  to harvest our  natural resources and  to the                                                                   
     management of the resource itself.                                                                                         
     Please consider and pass HB 254 to secure the BGCSB.                                                                       
     We  have present  Fred  Parady, Deputy  Commissioner  of                                                                   
     Department of Commerce, Community, and Economic                                                                            
     Development   and  Sam   Roher,   president  of   Alaska                                                                   
     Professional  Hunter  Association,   and  Eddie  Grasser                                                                   
     with   the   Alaska   chapter   of   the   Safari   Club                                                                   
     International to answer specific questions.                                                                                
1:50:10 PM                                                                                                                    
Representative Wilson asked for more details about when the                                                                     
Board sunsetted and the potential fiscal impact. Mr. Handy                                                                      
deferred to Mr. Parady.                                                                                                         
Co-Chair Thompson encouraged committee members to continue                                                                      
with questions and he would invite Mr. Parady to the table                                                                      
Representative Kawasaki asked when it sunsetted. Mr. Handy                                                                      
responded that it sunsetted in 2005.                                                                                            
Representative  Munoz  remarked  that there  was  legislation                                                                   
moving through  the process that  would increase  hunting and                                                                   
licensing  fees. She  asked  whether that  legislation  would                                                                   
bring in  revenue sufficient  to cover  the deficit.  If not,                                                                   
was  the issue  addressed with  the bill  sponsor. Mr.  Handy                                                                   
again differed to DCCED.                                                                                                        
Co-Chair Neuman  had received comments from  Resident Hunters                                                                   
of  Alaska  and  other  groups  that  opposed  the  extension                                                                   
primarily because  of charging transporters costs  that might                                                                   
have  been incurred  by  big  game commercial  services.  The                                                                   
legislation   also  applied  to   people  who  carried   non-                                                                   
transporters. He  read from a statement prepared  by Resident                                                                   
Hunters of Alaska:                                                                                                              
     "…not  all air  carriers  who transport  hunters to  and                                                                   
     from  the field choose  to be  a "transporter,"  in fact                                                                   
     many  of the  major air-taxis  who fly  hunters are  not                                                                   
     "transporters"  -  are  requesting   the  new  fees  for                                                                   
     mandated transporter hunt activity reports…"                                                                               
Co-Chair  Neuman  remarked that  they  would be  charged  new                                                                   
fees that  mandated transporter  hunter activity  reports. He                                                                   
suggested that  other Alaska  Airlines, Frontier,  and Reeves                                                                   
transported hunters.  He wondered  if they would  be required                                                                   
to  pay  the  fees.  He  asked   for  details  regarding  the                                                                   
discrepancies. Mr. Handy deferred to the experts at DCCED.                                                                      
Co-Chair  Neuman was  not certain  if he  received the  right                                                                   
answer. Mr.  Handy conveyed that  he did not have  the answer                                                                   
and referred to the experts.                                                                                                    
Co-Chair Neuman asked  who would also be addressing  the bill                                                                   
before the committee.                                                                                                           
Co-Chair  Thompson would  bring  up others  in  the room  and                                                                   
online. He reviewed the list of available testifiers.                                                                           
Co-Chair  Neuman   had  just  been   asked  by  one   of  his                                                                   
constituents about  the issue.  He asked how many  registered                                                                   
guides were  in the State of  Alaska and how many  guides and                                                                   
transporters   were  members   of  the  Alaska   Professional                                                                   
Hunters Association.  Mr. Handy thought it was  over 1000. He                                                                   
had other individuals that could provide specific numbers.                                                                      
Co-Chair Thompson invited Mr. Parady to come forward.                                                                           
1:54:02 PM                                                                                                                    
FRED  PARADY, DEPUTY  COMMISSIONER,  DEPARTMENT OF  COMMERCE,                                                                   
254 to  extend the  sunset date for  the BGCSB. He  expressed                                                                   
the  department's  appreciation   for  the  valuable  insight                                                                   
provided  to the department  by the  Legislative auditor  and                                                                   
her staff  for process improvements.  In looking at  the 2015                                                                   
audit  by  the  Division  of  Legislative  Audit  there  were                                                                   
strong words  of support provided  to the board.  Amongst the                                                                   
findings  were   that  the  board  had   provided  reasonable                                                                   
assurances  that  licensees  were   qualifies  and  that  the                                                                   
board's  regulation and  licensing  benefitted public  safety                                                                   
and safeguarded  Alaska's wildlife. In light of  the deficit,                                                                   
the department  recommended a  3-year extension to  2019. The                                                                   
division's audit  had 4 recommendations.  The first  was that                                                                   
the  department  improved  its  public  notice  process.  The                                                                   
Department  of Commerce, Community  and Economic  Development                                                                   
had  completed   the  process  by  rewriting   its  policies,                                                                   
improving  its  checklists, and  shifted  responsibility  for                                                                   
notifications  to one  person to  ensure accountability.  The                                                                   
second  recommendation concerned  investigations. There  were                                                                   
currently  approximately 70  cases  before the  board in  the                                                                   
context  of investigations.  He mentioned  that Angela  Birt,                                                                   
Section Chief,  was in charge  of the investigative  unit for                                                                   
all professions  had insured  that the  gap in inactivity  in                                                                   
an investigation  was less than 60  days. It was part  of her                                                                   
performance  evaluation for  each of  her investigators.  The                                                                   
department  had  created  a  system   to  sustain  electronic                                                                   
contact when  guides were in  the field and created  standard                                                                   
operating procedures.  The department created a  tickler file                                                                   
to send  out reminders if there  was inactivity for  30 days.                                                                   
Often  the sources  of  inactivity  were awaiting  action  by                                                                   
some other agency  so that the investigation  was momentarily                                                                   
on hold.  The department had  also created a  sanction matrix                                                                   
that guided the implementation of investigations.                                                                               
Mr. Parady  continued with  the third  recommendation  by the                                                                   
Division  of Legislative  Audit which was  to increase  fees.                                                                   
The fees  were increased  for the  2015 2-year renewal  cycle                                                                   
and were  increased again  for the 2017  cycle, part  of what                                                                   
was  drawing  the  question from  the  transporters.  He  was                                                                   
happy to  report that  whereas the deficit  of the  board was                                                                   
$1.1  million  on  June  30,   2015,  it  decreased  by  $896                                                                   
thousand as of  December 31, 2015. It was a  decrease of $225                                                                   
thousand  in  the current  licensing  cycle.  He  anticipated                                                                   
that the  debt would  be reduced by  $535 thousand  and would                                                                   
be eliminated in  the subsequent 2-year cycle.  The board was                                                                   
operating  in the black  at present  and was working  towards                                                                   
erasing  its deficit.  The fourth  recommendation  had to  do                                                                   
with a  transportation  licensing update,  the work of  which                                                                   
had been accomplished.                                                                                                          
Mr. Parady  emphasized  the need  for the board  in order  to                                                                   
direct  the associated  profession. Because  of their  unique                                                                   
insights   into   their   activities   the   board   provided                                                                   
assistance to  the public, the  state, the DCCED, and  to the                                                                   
Division   of   Corporations,   Business   and   Professional                                                                   
Licensing (DCBPL).  In stepping back to the  30 thousand foot                                                                   
view,  guides  in  this  sort  of activity  as  part  of  the                                                                   
tourism industry  were a bright spot in the  state's economy.                                                                   
He  concluded his  comments by  noting  that licensing  would                                                                   
not  go away  even if  the board  did. The  issues that  came                                                                   
before   the   board   were  complex   and   the   department                                                                   
appreciated   the   board's    expertise   in   guiding   the                                                                   
profession. He was ready for questions.                                                                                         
1:58:23 PM                                                                                                                    
Representative  Wilson  wanted to  understand  how the  board                                                                   
sunsetting  caused the  current deficit.  Mr. Parady  did not                                                                   
know  all  the details  due  to  when  he started  as  deputy                                                                   
commissioner.   His  general   understanding  was   that  the                                                                   
department  did not have  the board's  expertise and  insight                                                                   
guiding  how  to  proceed with  investigations  in  terms  of                                                                   
knowing what  was worthy  of investigation  and how  to spend                                                                   
investigative resources.  A second  problem was noted  in the                                                                   
audit  that the  deficit situation  was made  worse by  about                                                                   
$236  thousand (Page  11  of the  audit  report) because  the                                                                   
indirect  cost  allocation  methodology  that  was  corrected                                                                   
following a special audit in 2011.                                                                                              
Representative   Wilson   asked    for   the   fee   increase                                                                   
information.  Mr.   Parady  would  provide  a   copy  of  the                                                                   
increases  which occurred  in 2015  and 2017  on a  bi-annual                                                                   
cycle.  He added that  in 2017  the average  increase was  31                                                                   
percent.  There  was  also  a  new  records  fee  and  a  new                                                                   
transporter  fee  of  $50  -   a  fee  to  help  draw  monies                                                                   
associated with  specific activities  and to spread  the load                                                                   
to erase the deficit.                                                                                                           
Representative  Wilson was  concerned with  the bill  and was                                                                   
aware of  guides that had  been investigated. She  was trying                                                                   
to understand  whether  the deficit  resulted from  something                                                                   
that  had happened  and  the indirect  costs  or whether  the                                                                   
DCCED  had  conducted  investigations that  should  not  have                                                                   
occurred. She provided  an example. A fellow  was charged and                                                                   
went to  court. He  was found not  guilty and the  department                                                                   
paid over  $80 thousand trying  to prosecute him. It  was her                                                                   
understanding that  the cost of $80 thousand  was then passed                                                                   
on  to  other guides  in  the  form of  increased  fees.  She                                                                   
thought  only  those found  guilty  should  have to  pay  the                                                                   
fees.  She   asked  whether  there   was  a  provision   that                                                                   
protected guides that did the right thing.                                                                                      
Mr. Parady  responded that her  question was germane.  It was                                                                   
a  conflict that  confronted  the department  in  all of  the                                                                   
DCBPL  statues  where  the department  was  directed  by  the                                                                   
legislature  to  balance  each   profession  within  its  fee                                                                   
structure  when there was  already a  regulatory function  in                                                                   
place  for the  general  benefit of  citizens  of Alaska  and                                                                   
perhaps  should  come from  the  general fund.  He  suggested                                                                   
that she would  run into her questions that  she had broached                                                                   
across  any range  of  state activities  where  investigation                                                                   
took place.  Some investigations did  not result in  a guilty                                                                   
conviction  and  therefore  she   was  suggesting  that  they                                                                   
should  not return  to the  board. However,  the decision  to                                                                   
conduct  the  investigation,  the  rules  that  governed  the                                                                   
profession,  and  the  need  for   the  investigation  rested                                                                   
within the  profession. Unless  there was  a place  to divert                                                                   
the costs they would be carried by the profession.                                                                              
2:02:33 PM                                                                                                                    
Co-Chair  Thompson  commented  that  the  bill  was  only  to                                                                   
extend the board rather than to address fees.                                                                                   
Representative  Wilson contended that  if the department  was                                                                   
performing  undue investigations  and putting  the cost  onto                                                                   
the board  it was  something that needed  to be changed.  For                                                                   
instance,   in   the  audit   report   on  Page   14,   under                                                                   
"contractual" the  state went from  $94 thousand in FY  12 to                                                                   
$172 thousand,  to $188  thousand. She assumed  "contractual"                                                                   
had to  do with  investigator services.  She wondered  if she                                                                   
was correct.                                                                                                                    
Co-Chair Thompson  relayed that Ms. Curtis from  the Division                                                                   
of  Legislative  Audit  would  be  testifying  following  Mr.                                                                   
Parady's testimony.                                                                                                             
Mr.  Parady   was  unsure  of   the  contractual   line  item                                                                   
Representative Wilson  was referring to. He thought  that the                                                                   
Department  of   Law's  services  were  covered   through  an                                                                   
interagency receipt.                                                                                                            
Representative  Wilson was  concerned  that additional  costs                                                                   
were being  passed to guides through  the board. She  felt it                                                                   
was relevant  and expressed misgivings about  increasing fees                                                                   
such that  it would discourage  guides from participating  in                                                                   
the industry.                                                                                                                   
Representative Kawasaki  referred to Exhibit 2 on  page 14 of                                                                   
the  BGCSB Audit  produced  by  the Division  of  Legislative                                                                   
Audit (copy  on file).  He pointed  to the personal  services                                                                   
line between $250  thousand to $300 thousand  the past couple                                                                   
of years.  He also pointed to  Exhibit 3 on page 18  where it                                                                   
showed  the total  number  of  licenses issued.  The  exhibit                                                                   
showed 111  total licenses  issued in  FY 12,  141 in  FY 13,                                                                   
157  in  FY  14,  and 119  in  the  following  year.  He  was                                                                   
uncertain  of the  costs,  time, and  effort  to process  the                                                                   
renewals. He mentioned  talking earlier in the  day about the                                                                   
Board  of  Barbers  and  Hairdressers   reporting  that  1000                                                                   
manicurists needed  licenses. He  thought it seemed  like for                                                                   
that board  it would  take a  significant amount  of time  to                                                                   
process renewals.  He wondered  how much  time it would  take                                                                   
for BGCSB to process its renewals.                                                                                              
Mr.  Parady responded  that  the activities  in  each of  the                                                                   
licensee  groups   that  were  mandated  in   statute  varied                                                                   
broadly.  In   dealing  with  Manicurist's   licensures,  for                                                                   
example, there  were substantial health issues.  He explained                                                                   
that  for  big  game outfitters  several  times  a  year  the                                                                   
department administered  extensive tests for guides  to be in                                                                   
the field.  The cost of  administering those tests  would not                                                                   
necessarily  exist  for  another profession.  There  were  43                                                                   
professions  that were licensed;  21 that  had boards  and 22                                                                   
that  did  not.  Licensing varied  widely  depending  on  the                                                                   
Representative Guttenberg  was concerned with  administrative                                                                   
and legal  costs associated with  legal actions.  He wondered                                                                   
if  the  department  would  be   responsible  for  initiating                                                                   
charges if  there was  not a board.  Mr. Parady responded  in                                                                   
the affirmative. He  supposed that costs would be  borne by a                                                                   
particular   profession   if  the   "bad   actors"  in   that                                                                   
profession  were unlicensed and  generated an  investigation.                                                                   
ON a lighter note,  he reported that in the two  years of his                                                                   
tenure he  had a case where  a chiropractor treated  a horse.                                                                   
There  was a question  about whether  it was  a violation  of                                                                   
chiropractic or  veterinary practice.  It turned out to  be a                                                                   
violation of veterinary practice.                                                                                               
Representative  Guttenberg thought  Mr.  Parady had  answered                                                                   
his question about  whether charges went back  to the license                                                                   
holder, independent of whether the board existed.                                                                               
Vice-Chair  Saddler asked,  in the  years which  there was  a                                                                   
deficit in the  expenses of the board for  investigations, if                                                                   
they were  made up from  the general  fund. If not,  he asked                                                                   
him to  identify the funding  source. Mr. Parady  believed it                                                                   
remained  within the  DCBPL, a  receipt-supported agency.  He                                                                   
would confirm his answer later.                                                                                                 
Vice-Chair  Saddler was  unclear about  Mr. Parady's  answer.                                                                   
He suspected  that investigators  received payment  for their                                                                   
services. He  asked if it came  out of the DCBPL's  budget in                                                                   
which  the legislature  appropriated from  the general  fund.                                                                   
Mr.  Parady   responded  that   he  needed  to   confirm  his                                                                   
response.  He  explained  that   DCBPL  operated  within  its                                                                   
budget,  operating  in the  black.  The agency  was  receipt-                                                                   
supported   and    did   not   received   a    general   fund                                                                   
Vice-Chair  Saddler asked  if  the deficit  was  a result  of                                                                   
ongoing receipt  deficits from those individuals  paying fees                                                                   
or if  it was historical deficits  from the past.  Mr. Parady                                                                   
indicated  that  the board  was  currently operating  in  the                                                                   
black.  The   deficit  was  generated   from  the   past.  He                                                                   
clarified  that he  was  referring to  the  rolled up  DCBPL,                                                                   
receipt-supported in aggregate.                                                                                                 
Representative  Gara mentioned  that when  he worked  for the                                                                   
Office  of  the  Attorney  General there  were  a  couple  of                                                                   
attorneys  he  worked  with. One  of  them  handled  criminal                                                                   
cases going after  people that had committed  game violations                                                                   
and one  who handled civil  cases going after  penalties from                                                                   
people   (some  of   them  guides)   who   engaged  in   game                                                                   
violations.  He asked  if  Mr. Parady's  department  received                                                                   
bills  from the  attorney general's  office  when it  handled                                                                   
such  cases.   Mr.  Parady   would  have   to  get   back  to                                                                   
Representative Gara with an answer.                                                                                             
Representative  Gara suggested  fines would  be collected  as                                                                   
well.  He wondered  if the  fines came  through Mr.  Parady's                                                                   
office.  Mr. Parady  stated that  fines  typically went  into                                                                   
the general fund  rather than their source. He  would have to                                                                   
do some research and get back to Representative Gara.                                                                           
Representative Munoz  asked about the criteria  for beginning                                                                   
an investigation.  Mr. Parady  could provide a  guide handout                                                                   
on the investigation matrix.                                                                                                    
Co-Chair Thompson  asked that  a copy be  given to  his staff                                                                   
to be dispersed.                                                                                                                
2:11:54 PM                                                                                                                    
Co-Chair Neuman  agreed that  the state  needed the  BGCSB to                                                                   
oversee  guides  and transporters.  His  concerns  had to  do                                                                   
with some  of the recommendations  that were provided  by the                                                                   
Division  of Legislative  Audit. He  referred to  Page 33  of                                                                   
the audit  for the BGCSB which  was the response  from DCCED.                                                                   
He pointed  to Recommendation  3 which  talked about  how the                                                                   
program had a  known deficit in 2011 and after  a legislative                                                                   
inquiry   into   the  division's   proposed   necessary   fee                                                                   
increases  for the  program,  the decision  was  made not  to                                                                   
pursue a  fee increase  at the time.  He summarized  that the                                                                   
board  had been  encouraged to  increase its  fees which  the                                                                   
board  had refused  to do.  It  appeared that  the board  was                                                                   
looking at a  modest increase. He asked what  fees would have                                                                   
to  be increased  in order  to  reduce the  deficit. He  also                                                                   
wondered why the board had not taken any action at present.                                                                     
Mr. Parady  thought that it  was a historical  description of                                                                   
the  board's unwillingness  to  act in  2011.  The board  had                                                                   
enacted  two full  rounds of  fee  increases in  2013 and  in                                                                   
2015.  He had  a 1-page  summary  which he  would share  with                                                                   
staff.  The increases  were  typically  31 percent.  Some  of                                                                   
them  were 14  percent.  The board  was  trying  to keep  the                                                                   
costs   lower  on   the  newer   members   coming  into   the                                                                   
profession. The most  recent round of increases was  14 to 31                                                                   
2:14:34 PM                                                                                                                    
Co-Chair Neuman  had no  idea about  what the percentage  was                                                                   
applied to.  Mr. Parady provided  two examples. A  new master                                                                   
guide  license  for  a  resident  was $650  and  for  a  non-                                                                   
resident it was  $1350. After the fee increase the  cost of a                                                                   
resident  license would  be $850  and for  a non-resident  it                                                                   
was $1700 - both numbers reflected a 31 percent increase.                                                                       
Co-Chair  Neuman asked  if the air  transport industry  would                                                                   
be  charged  additional  fees.  Mr. Parady  would  provide  a                                                                   
written answer  to his question.   In general,  he understood                                                                   
the  transporter fee  was  $50 for  transporting  a big  game                                                                   
animal. It was  unclear to him as to whom might  transport an                                                                   
animal that was  not a registered transporter  versus who had                                                                   
to be registered.                                                                                                               
Co-Chair Thompson invited Ms. Curtis to the table.                                                                              
KRIS  CURTIS,   LEGISLATIVE  AUDITOR,   ALASKA  DIVISION   OF                                                                   
LEGISLATIVE  AUDIT, relayed  that  there  was information  in                                                                   
the  audit report  that would  answer many  of the  questions                                                                   
that   were   asked   earlier.  She   would   first   address                                                                   
Representative  Wilson's   questions  concerning   fees.  She                                                                   
relayed  that  in  the  appendix   of  the  audit  there  was                                                                   
historical  information  by license  including  the  proposed                                                                   
fee at the  time of the  audit in the previous  summer. There                                                                   
was a  question regarding  personal services and  contractual                                                                   
information  in Exhibit 2.  There was  a question about  what                                                                   
was "contractual."  She confirmed that Department  of Law was                                                                   
included.  The board  could  also  hire experts  for  certain                                                                   
cases  and could  be found  on  the contractual  line and  it                                                                   
varied by investigation.  She had heard some  questions about                                                                   
what drove  the investigative  costs. She responded  that her                                                                   
audit  found  that  there  was  a  high  case  load  for  the                                                                   
particular  occupation.  When  Legislative Audit  tested  the                                                                   
timeliness  of the  investigations they  found 17  out of  25                                                                   
cases that  were reviewed had  periods of inactivity  ranging                                                                   
from  5 months  to 5  years. There  were  several cases  that                                                                   
were  not being  addressed  in a  timely  manner. There  were                                                                   
some changes  made including adding  a dedicated  investor to                                                                   
the board to help address some of the backlog.                                                                                  
Ms. Curtis  continued with  her response.  She addressed  the                                                                   
questions  about  the  number  of  licensees.  Representative                                                                   
Kawasaki  drew attention  to  Exhibit  3 on  page  18 of  the                                                                   
audit. She noted  that in comparing the current  audit to the                                                                   
one  completed  in  2011  overall  there  was  a  13  percent                                                                   
decrease in the  number of licenses (found in  the footnote).                                                                   
Various types of  licensees decreased to different  rates and                                                                   
could be found in the exhibit.                                                                                                  
Ms.   Curtis   next   addressed    the   most   controversial                                                                   
recommendation  of  the  audit  having  to  do  with  the  $1                                                                   
million deficit.  She had heard  allegations that it  was the                                                                   
sunset  itself that  caused  the deficit.  She  did not  know                                                                   
where the information  was coming from. It was  not something                                                                   
the audit concluded.  She explained that when  the occupation                                                                   
sunsetted,  the   occupation  was  still  regulated   by  the                                                                   
department  and  would  still  incur costs  that  would  have                                                                   
become part  of the  new deficit  at the  time the board  was                                                                   
created.  When  her  division   did  the  audit  in  2011  it                                                                   
identified  the deficit  at that  time of  $376 thousand.  If                                                                   
the state did  not reduce expenditures and  increase revenues                                                                   
the deficit  would increase.  After that  point the  division                                                                   
changed its  cost allocation methodology which  increased the                                                                   
deficit by  over $200 thousand.  They tried to  increase fees                                                                   
in  2012. There  was a  great amount  of push  back from  the                                                                   
industry.  Their proposed  increases  were  over 60  percent.                                                                   
The  occupation objected  and  ultimately the  fees were  not                                                                   
increased  in FY 12.  There were  fewer licenses bringing  in                                                                   
revenue to share  the costs. She concluded that  she had just                                                                   
listed the major  contributors. Fees were increased  in FY 14                                                                   
but  at  that  point  the  increase   in  revenues  were  not                                                                   
covering the costs.                                                                                                             
2:20:43 PM                                                                                                                    
Representative  Wilson  was concerned  about  payments  being                                                                   
received  without  a board  in  place. Ms.  Curtis  responded                                                                   
that that  the cost  of investigating would  be borne  by the                                                                   
occupation  regardless  of  whether  they had  a  board.  The                                                                   
process  would  be different,  but  the  costs would  be  the                                                                   
Representative Wilson  supposed a problem was brought  to the                                                                   
board  and the board  decided  whether to go  forward with  a                                                                   
complaint.  She wondered,  without  a board,  if the  problem                                                                   
would be  brought to someone  else in the administration  who                                                                   
would  determine whether  the  complaint  moved forward.  Ms.                                                                   
Curtis  explained  how it  worked.  A complaint  was  brought                                                                   
forward to be  investigated. The board was not  involved with                                                                   
the  investigation  at all.  Members  had  to keep  an  arms-                                                                   
length  distance to  be able to  eventually  rule on it.  The                                                                   
complaint  would  be investigated  and  an attempt  would  be                                                                   
made to  work out a consent  agreement with the  claimant. If                                                                   
an agreement  was not successful  there would most  likely be                                                                   
a review  of the  evidence by  an assistant attorney  general                                                                   
and a  determination would  be made  about whether  there was                                                                   
enough evidence.  The commissioner would subsequently  file a                                                                   
complaint with the  board. They would move forward  to try to                                                                   
take  the  license  away.  She   was  uncertain  whether  the                                                                   
progress would happen without the board.                                                                                        
Representative Wilson  asked if legislation was  necessary to                                                                   
enforce using the  fees paid to the state to  help offset the                                                                   
state's   deficit.  Ms.   Curtis   responded   that  it   was                                                                   
definitely outside  of the board  purview. She  was uncertain                                                                   
about the violation of dedicated revenues.                                                                                      
Representative Wilson  expressed her opinion  that increasing                                                                   
the fees  like the  state had been  would definitely  have an                                                                   
impact. They were  private business folk not  making a profit                                                                   
and  would likely  stop  their service.  She  thought it  was                                                                   
important to know  whether the problem was being  made better                                                                   
or worse.                                                                                                                       
Co-Chair  Neuman asked  what caused the  $1 million  deficit.                                                                   
Ms.  Curtis  responded  that   it  was  due  to  an  untimely                                                                   
increasing  of   fees.  If  the   fees  had  been   increased                                                                   
appropriately at the  first sign of a deficit,  it could have                                                                   
been  addressed  more  timely.   In  addition,  the  division                                                                   
changed its  cost allocation methodology  after it  was found                                                                   
to  be inappropriate  in  2011. She  relayed  that over  $200                                                                   
thousand  of the  deficit was  because of  the indirect  cost                                                                   
allocations.   Mainly,  though,  it   was  due  to   untimely                                                                   
increasing fees.                                                                                                                
2:25:15 PM                                                                                                                    
Co-Chair  Neuman thought  he was hearing  that $200  thousand                                                                   
of  the  $1  million  deficit   was  because  the  department                                                                   
changed  the  fee schedule  as  opposed  to the  board  self-                                                                   
regulating and increasing  its own fees. Ms.  Curtis referred                                                                   
to  Exhibit  2  that showed  that  the  department  allocated                                                                   
indirect costs  to boards  such as  electricity. There  was a                                                                   
methodology of allocating  the costs to the  boards. In 2011,                                                                   
when  Legislative Audit  looked they  found that  it was  not                                                                   
appropriate  because  certain   divisions  were  not  getting                                                                   
their  appropriate   allocation   and  the  methodology   was                                                                   
changed.  They  started  allocating  based  on  licensees  by                                                                   
board,  an equitable  way of allocating  it.  They had  to do                                                                   
some  widespread  adjustments  which resulted  in  the  BGCSB                                                                   
having an increase of over $200 thousand in its deficit.                                                                        
Co-Chair Neuman  confirmed that  it was  due to changes  from                                                                   
the department. Ms. Curtis responded affirmatively.                                                                             
2:26:42 PM                                                                                                                    
Co-Chair Thompson OPENED public testimony.                                                                                      
2:26:57 PM                                                                                                                    
MARK RICHARDS  EXECUTIVE   DIRECTOR,   RESIDENT  HUNTERS   OF                                                                   
ALASKA,   opposed  the   legislation.  He   noted  a   letter                                                                   
previously  submitted on  April 1, 2016.  There were  several                                                                   
reasons the  group opposed extending  the BGCSB the  main one                                                                   
being  that the  board had  been involving  itself in  issues                                                                   
that affected  resident Alaska  hunters outside its  purview.                                                                   
Speaking about  financial matters  associated with  the board                                                                   
he wanted  to address  the board's ongoing  debt and  why the                                                                   
group  did  not believe  the  board  would  be able  to  fund                                                                   
itself  in the  black  moving forward.  He  pointed out  that                                                                   
whether there was  a BGCSB the guide industry  would continue                                                                   
being  regulated.  Guide  licensing  and  examinations  would                                                                   
still  take  place,  complaints  would  still  come  in,  and                                                                   
investigations  would  still   occur.  Not  all  occupational                                                                   
licensees  had  their  own  board   but  were  regulated  and                                                                   
overseen by the  State of Alaska. If the board  sunsetted the                                                                   
continual  modification  and  changes  to  guide  regulations                                                                   
would stop.  The associated costs  with such changes  and the                                                                   
continual   lessoning  of  guide   ethics  regulations   that                                                                   
allowed big  game guides to  do things like spotting  animals                                                                   
from the air  with the intention of harvesting  those animals                                                                   
would also  stop. He  pointed out that  the new 3000  percent                                                                   
increase in  fees to transporters  was in large part  how the                                                                   
board intended to  pay off its debt by the end  of FY 17. The                                                                   
new fees to  transporters were not enshrined  permanently. In                                                                   
the letter by  his group and another letter  from Seahawk Air                                                                   
owner, Roland  Ruoss reported  that shortly  the board  would                                                                   
be voting  on reducing or  eliminating fees to  transporters.                                                                   
There  was also  the  possibility  that a  forthcoming  legal                                                                   
opinion could  render the entire  transporter category  as it                                                                   
related  to  aircraft  untenable and  unworkable.  The  board                                                                   
would  lose the  fees to  aircraft transporters  permanently.                                                                   
He  felt  that the  board  needed  to  fund itself  from  the                                                                   
licensees  as originally  supposed  to oversee  as the  guide                                                                   
board and as the legislature originally intended.                                                                               
Mr.  Richards noted  that  the recent  fiscal  note that  was                                                                   
given to the  committee only showed the cost  of meetings and                                                                   
did not  reflect the  other costs  associated with  the board                                                                   
such  as  administrative  costs associated  with  changes  to                                                                   
regulations or  investigatory costs;  the main source  of the                                                                   
board's  continued debt.  He  mentioned  the McDowell  report                                                                   
from the Alaska  Professional Hunters Association  that spoke                                                                   
to the  income the  guide industry  generated across  Alaska.                                                                   
He thought  it was  being used  to bolster  the need  for the                                                                   
board  to  continue.  He  opined   that  the  guide  industry                                                                   
generated enough revenue  that it should be able  to fund its                                                                   
own board  on the  licensing fees of  its licensees.  He also                                                                   
relayed  that the  same  report for  the  guide industry  was                                                                   
also  meaningless  in terms  of  whether the  guide  industry                                                                   
needed  the board  to  continue  to function.  He  reiterated                                                                   
that  the guide  industry would  not  cease to  exist if  the                                                                   
board sunsetted.  The question  was whether  the board  could                                                                   
function in  a manner  that was beneficial  to the  state and                                                                   
the guide industry  while being funded by its  main licensees                                                                   
it oversaw.  His group  did not  believe it  could. He  added                                                                   
that he  had attended the BGCSB  meetings for many  years and                                                                   
heard  guides   complain  about  other  guides   abusing  the                                                                   
system. He  inquired about  why the bad  actors had  not been                                                                   
dealt  with. Complaints  were  filed  with the  Alaska  State                                                                   
Troopers  and with  the board  to no avail.  He claimed  that                                                                   
high investigatory  costs were  responsible for slowing  down                                                                   
investigations  and   causing  the  board  to   sign  consent                                                                   
agreements rather  than bringing violators to  the full brunt                                                                   
of the law.  The consent agreements often allowed  a guide to                                                                   
continue to  operate. He  surmised that  the board  could not                                                                   
function  the way  it  was intended  to  function. His  group                                                                   
would have  no issue with the  board if it would stay  out of                                                                   
trying  to  affect resident  hunters.  He  thanked  committee                                                                   
members for their time.                                                                                                         
2:32:56 PM                                                                                                                    
SAM   ROHRER,    PESIDENT,   ALASKA   PROFESSIONAL    HUNTERS                                                                   
ASSOCIATION,  KODIAK (via teleconference),  spoke in  support                                                                   
of HB  254 to extend  the BGCSB.  He reported that  currently                                                                   
there  were approximately  304 active  contracting guides  in                                                                   
Alaska.   He  relayed   that   of  the   304  active   guides                                                                   
approximately  half  of  them  were  members  of  the  Alaska                                                                   
Professional  Hunters  Association.  He  signified  that  the                                                                   
board  was  critical  to  the   long-term  viability  of  the                                                                   
guiding  industry. The  board provided  the only  interaction                                                                   
between the  division and the  guiding industry.  He supposed                                                                   
that without the  board the industry had no  meaningful input                                                                   
on  the development  of  regulations that  directly  impacted                                                                   
the  guiding industry.  There  were  two specific  issues  he                                                                   
wanted  to  address.  The  first was  the  board's  debt.  He                                                                   
explained  that it  was important  to note  that some of  the                                                                   
debt began to  accumulate during the period of  time when the                                                                   
board previously  sunsetted. The current board  inherited the                                                                   
debt which continued  to increase due to  investigations that                                                                   
the  board had  little  or no  input  in. The  situation  had                                                                   
changed and  the debt was well  on its way to  being retired.                                                                   
However,  the  debt would  not  go  away  even if  the  board                                                                   
disbanded.  He claimed  that  without the  board's  oversight                                                                   
the debt  would continue  to grow and  would continue  to get                                                                   
charged back to  the guide industry in the  form of increased                                                                   
licensing fees.                                                                                                                 
Mr.  Rohrer  continued  by  addressing  a  second  issue.  He                                                                   
pointed out  that it was in  the public's interest to  have a                                                                   
well-regulated  guide industry. An  important aspect  was the                                                                   
licensing  of  new  registered   guides.  Under  the  current                                                                   
board,  prospective  guides  went  through  rigorous  testing                                                                   
including  a written test  and multiple  oral tests  taken in                                                                   
front  of proctors  made up  of board  members and  currently                                                                   
licensed guides.  During the period  the board  was sunsetted                                                                   
the  registered guide  test consisted  of  a multiple  choice                                                                   
test  and  eventually  with  the   test  the  answers  became                                                                   
available  online for  a fee.  He reiterated  that without  a                                                                   
board  he did not  believe it  was possible  to maintain  the                                                                   
same level  of testing and  assumed the testing  would return                                                                   
to the multiple  choice test. He urged members  to support HB
2:35:56 PM                                                                                                                    
PAUL CHERVENAK,  SELF, KODIAK (via teleconference),  spoke in                                                                   
favor of HB  254. He relayed that  he was a 36  year resident                                                                   
and hunter  of Alaska  and was  a licensed  master guide  and                                                                   
marine  transporter.  He  believed   in  helping  to  develop                                                                   
standards  and manage  the industry  to  make it  one of  the                                                                   
safest and  most professional there  was. He opined  that the                                                                   
BGCSB enabled  it to  happen. He  also believed that  hunters                                                                   
and  commercial   operators  should  help  to   pay  for  the                                                                   
industry  they used.  He  supported  the recent  increase  in                                                                   
license and reporting  fees and urged members  to support and                                                                   
move HB 254 out of committee.                                                                                                   
2:37:01 PM                                                                                                                    
DICK   ROHRER,  SELF,   KODIAK   (via  teleconference),   was                                                                   
introduced  to the  guide business  in 1965  when he came  to                                                                   
Alaska. He  had been licensed as  a guide since 1971.  He was                                                                   
a master guide  and served 2 terms on the BGCSB  beginning in                                                                   
2005  when the  board was  reinstated.  He spoke  of being  a                                                                   
financial officer  to the board. He was disappointed  when he                                                                   
found out  through accounting  methods that $236  thousand of                                                                   
revenue disappeared  in 2011.  In the same year  he had heard                                                                   
the  deficit  at the  time  was  $376 thousand.  Taking  both                                                                   
figures   into  consideration   if  the   revenue  had   been                                                                   
maintained there  would not have been a concern  with revenue                                                                   
or expenses. Another  thing that happened when  the board was                                                                   
reinstated was  that the board  encouraged the  Department of                                                                   
Commerce, Community  and Economic Development to  implement a                                                                   
computer  system to  keep hunting  records in  order to  have                                                                   
information  readily  available  for  the  various  agencies.                                                                   
During the time  it was being put together  the board thought                                                                   
it  had commitments  from  federal  agencies to  provide  $30                                                                   
thousand  to  $40  thousand  in revenue  to  go  towards  the                                                                   
project  that   would  have   generated  substantially   more                                                                   
revenue.  The  board  was  unable  to figure  out  a  way  to                                                                   
transfer the money  directly to the board. He  responded to a                                                                   
question  asked  by  Representative  Kawasaki  relaying  that                                                                   
there were  only 112 under the  board. He thought  the number                                                                   
reflected  only the  number of  master  guide outfitters.  He                                                                   
anticipated  approximately  500 additional  registered  guide                                                                   
outfitters  and  approximately 700  to  1000 more  class  "A"                                                                   
assistant   guides.   He  did   not   know  the   number   of                                                                   
transporters. He pointed  out that it was not  the board that                                                                   
set the fees but  rather the DCCED. He commented  that it was                                                                   
the legislature  through the BGCSB statutes  that established                                                                   
the  transporter  license, rather  than  the board.  He  also                                                                   
noted  that,  under  the  statutory   definitions,  air  taxi                                                                   
operators who flew  from point-to-point were exempt  from the                                                                   
transporter  licensing  requirement. It  was  only those  air                                                                   
transporters  that advertised big  game hunting services  and                                                                   
charged a  different fee  for hunts were  required to  have a                                                                   
transporter license.  Any other air taxi operator  was exempt                                                                   
from the  licensing requiring  and exempt  from the  $50 that                                                                   
he was claiming.                                                                                                                
KELLY  VREM, CHAIRMAN,  BIG GAME  COMMERCIAL SERVICES  BOARD,                                                                   
SUTTON  (via teleconference),  testified  in  support of  the                                                                   
bill. He relayed  that the board was operating  in the black.                                                                   
The  legal  costs  that  caused  the debt  were  out  of  the                                                                   
board's  control as  Ms. Curtis  had pointed  out. The  board                                                                   
could  only react  to the  charges levied  against guides  or                                                                   
transports  after  they  were  made. The  board  decided  the                                                                   
appropriate  level of punishment  but did  not get  to decide                                                                   
who to  pursue in  a violation. There  were multiple  ways to                                                                   
incur a violation.  It could be completely  inadvertent. Some                                                                   
examples  included failing  to file  a form,  failing to  get                                                                   
official permission  from a land manager, or  overtly meaning                                                                   
to  subvert the  law.  He relayed  that  the board  currently                                                                   
treated people with  the same hammer. He felt  a more nuanced                                                                   
approach  was  needed  and  could   only  be  attained  after                                                                   
reaching a  consent agreement  or obtaining a  conviction. He                                                                   
relayed  additional   challenges  having   to  do   with  the                                                                   
division raising  the fees. Although he favored  raising them                                                                   
he claimed  there had  not been  adequate public input  prior                                                                   
to the department  deciding to do so. He believed  it was the                                                                   
only board that used volunteer proctors.                                                                                        
2:45:14 PM                                                                                                                    
VIRGIL UMPHENOUR,  SELF, FAIRBANKS (via teleconference),  was                                                                   
in  support  of  the  board.   He  shared  that  the  guiding                                                                   
industry was unlike  any other in the state: it  was the most                                                                   
regulated  and  had  the highest  standards.  The  board  was                                                                   
needed  to decide  whether  investigations  went forward.  He                                                                   
was  very  aggravated  to see  the  DCCED  violate  Alaskans'                                                                   
constitutional rights.  He also mentioned  that investigators                                                                   
typically  launched  large  investigations.  He  provided  an                                                                   
occurrence in which  a young guide turned himself  in and was                                                                   
fined. He thought  the board was needed to  set standards and                                                                   
to   eliminate   bureaucratic   bullying.  He   thought   the                                                                   
transporters had  been getting a  free ride for too  long. He                                                                   
thanked the committee.                                                                                                          
Co-Chair Thompson CLOSED public testimony.                                                                                      
2:49:29 PM                                                                                                                    
Representative  Wilson  asked  about setting  the  fees.  She                                                                   
wondered  if  DCCED  had  not set  the  fees  correctly.  Mr.                                                                   
Parady  responded that  the calculation  of  fees across  the                                                                   
department  had confounded  the  DCCED for  the past  decade.                                                                   
They  had been  the  subject of  a legislative  audit  twice.                                                                   
Although  the fee  calculations were  founded in  mathematics                                                                   
as the auditor  described, the original push  to increase the                                                                   
fees  was  resisted  by  the  board.  The  fee  increase  was                                                                   
generated  by the  regulation  rule making  authority of  the                                                                   
DCCED, but  it was  done with  the advice and  recommendation                                                                   
of  the  board.  The  delay lead  to  the  worsening  of  the                                                                   
problem.  Currently,   the  board  and  the   department  had                                                                   
initiated  two  rounds  of  fee   increases,  the  board  was                                                                   
operating in the black, and the deficit would be erased.                                                                        
Representative Wilson  interjected that a larger  picture was                                                                   
at hand.  She suggested  that boards  were mandated  to cover                                                                   
their  costs with  no costs  to  the state.  She thought  the                                                                   
question  the legislature  should be  addressing was  whether                                                                   
the state  should allow boards  to continue if they  were not                                                                   
self-sufficient.  Boards  having the  ability  to reject  fee                                                                   
increases was  an issue unto  itself. Mr. Parady  agreed that                                                                   
it was  in statute  that the fee  balance in each  profession                                                                   
had  to  be self-supporting.   The art  of  the  mathematical                                                                   
calculation was  in the allocation of costs:  the compilation                                                                   
of all  of the  detail. It  was currently  changing with  the                                                                   
state's  new accounting  system and the  department would  be                                                                   
adapting further.                                                                                                               
Representative Wilson  was not interested in moving  the bill                                                                   
forward  because   of  her  concerns  with   the  legislature                                                                   
breaking  its own  statute.  She  believed that  because  the                                                                   
board had  a deficit it was  not in compliance with  the law.                                                                   
Mr.  Parady  offered  that  it  was not  the  only  board  or                                                                   
profession  in the  same circumstance.  He  conveyed that  in                                                                   
the audit  report a  revenue cycle was  a 2-year  period. For                                                                   
example,  in  the  first  year  the  revenue  might  be  $350                                                                   
thousand or  $400 thousand.  In the second  year it  might be                                                                   
$150 thousand.  The department was  trying not to  send shock                                                                   
waves into  the system  in terms  of correcting the  deficit.                                                                   
The department was  mindful of the statute and  the statutory                                                                   
Representative   Pruitt  conveyed   that   the  Division   of                                                                   
Corporations,  Business and Professional  Licensing  had been                                                                   
a  giant  mess for  a  while.  It  was not  just  the  BGCSB.                                                                   
However,  the  BGCSB was  the  most  expensive board  due  to                                                                   
investigations. As  a result, it had the largest  deficit. He                                                                   
reminded   members  that   the   legislature  placed   intent                                                                   
language in  the bill directing  the division to  ensure that                                                                   
the state  covered its costs.  He recalled the Board  of Real                                                                   
Estate  raising  its fees  to  cover  costs and  people  were                                                                   
outraged.   Subsequently,  the   costs   were  dropped   down                                                                   
substantially.  The legislation  gave boards  the ability  to                                                                   
ensure  their costs  were  covered relieving  the  department                                                                   
from  having to  do  so.  He thought  boards  would  be in  a                                                                   
better position  going forward.  Lastly, there was  one board                                                                   
not covered  by the  statute being  discussed: the  Marijuana                                                                   
Board. He thought it would be a problem in the future.                                                                          
Co-Chair Thompson thought a future bill might be in order.                                                                      
2:55:12 PM                                                                                                                    
Representative  Gattis noted  that  part of  the problem  for                                                                   
the BGCSB was  that the fee structure was not  increased when                                                                   
it should  have been. She thought  there also needed  to be a                                                                   
change regarding  investigations. She referred  to a previous                                                                   
testimony  in  the   meeting  and  offered  that   she  might                                                                   
initiate a bill for consideration in the future.                                                                                
Vice-Chair Saddler  reviewed one fiscal impact  note from the                                                                   
Department of  Commerce, Community and Economic  Development.                                                                   
The  appropriation was  from  the Division  of  Corporations,                                                                   
Business,   and  Professional   Licensing.   The  Office   of                                                                   
Management  and  Budget  Component  number  was  2360,  dated                                                                   
March 24, 2016 in the amount of $22.3 thousand for FY 17.                                                                       
Co-Chair Thompson  relayed that  the fiscal  note he  had was                                                                   
dated, April 1, 2016.                                                                                                           
Vice-Chair Saddler stood corrected.                                                                                             
Representative  Wilson asked why  the deficits for  the board                                                                   
were not reflected in a fiscal note.                                                                                            
Co-Chair Thompson  explained that  the fiscal note  reflected                                                                   
the  amount of  revenue that  would  be brought  in, and  the                                                                   
source  from  which  it  was being  paid.  It  did  not  have                                                                   
deficits listed.  However, there were reports  from the DCCED                                                                   
that  showed  all  of  the  boards  and  their  deficits  and                                                                   
overages. He would provide the information from the DCCED.                                                                      
Representative Wilson  thought there should be  a fiscal note                                                                   
that included  an explanation of  what the members  had heard                                                                   
in  the meeting.  She thought  it should  reflect the  fiscal                                                                   
Representative  Pruitt  commented that  the  issue should  be                                                                   
reflect  on  paper  and  was   an  accounting  situation.  He                                                                   
furthered that  boards had borrowed  from other boards  to be                                                                   
able  to pay  the deficits  previously. That  was the  reason                                                                   
the division  was not  in a deficit.  He mentioned  the Board                                                                   
of  Nurses  that  brought  in   a  substantial  surplus.  The                                                                   
surplus  had been  borrowed to  pay for some  of the  deficit                                                                   
costs. He did not  believe including it in a  fiscal note was                                                                   
the proper  way to  address the  issue. He  asserted that  it                                                                   
was  a   clustered  problem   triggering  two  audits.   Many                                                                   
legislators had expressed frustration.                                                                                          
3:00:02 PM                                                                                                                    
Representative  Wilson  thought   there  should  still  be  a                                                                   
fiscal note  from the Boards  and Commissions  that reflected                                                                   
the  accounting  of  each  board. The  fiscal  note  was  not                                                                   
reflective of the bill.                                                                                                         
Co-Chair Thompson  mentioned that  Mr. Parady and  Ms. Curtis                                                                   
had  reported the  deficit of  the board  and explained  that                                                                   
the  amount of  fees  resulting  from licensure  would  catch                                                                   
them up by FY 17 bringing the board into the black.                                                                             
Representative  Pruitt  indicated   there  was  a  difference                                                                   
between  a board and  the programs.  All the  bill was  doing                                                                   
was extending  the board.  He asserted that  the board  had a                                                                   
$22.3 thousand cost. He suggested separating the two.                                                                           
Vice-Chair  Saddler suggested  that  when  the House  Finance                                                                   
Committee  was  considering  a   board  extension  it  should                                                                   
request that  a statement  of the balance  of the  deficit or                                                                   
credit   for  their   investigations  be   included  in   the                                                                   
information  packets for  members. He referred  to a  comment                                                                   
Mr.  Richards  had  made  a comment  about  a  pending  legal                                                                   
decision  regarding  transporters.  He  wanted to  know  more                                                                   
about it.                                                                                                                       
Co-Chair  Thompson wondered  if it was  something that  could                                                                   
be discussed because it was currently a pending court case.                                                                     
Vice-Chair Saddler was unsure.                                                                                                  
Co-Chair Thompson  did not want  to bring the issue  up again                                                                   
but suggested addressing it on the House Floor.                                                                                 
Vice-Chair Saddler withdrew his question.                                                                                       
Co-Chair  Neuman MOVED  to  REPORT HB  254  out of  committee                                                                   
with individual  recommendations and the  accompanying fiscal                                                                   
impact note. There being NO OBJECTION, it was so ordered.                                                                       
HB  254  was REPORTED  out  of  committee  with a  "do  pass"                                                                   
recommendation  and with  a  new fiscal  impact  note by  the                                                                   
Department of Commerce, Community and Economic Development.                                                                     
3:03:50 PM                                                                                                                    
AT EASE                                                                                                                         
3:07:26 PM                                                                                                                    
HOUSE BILL NO. 156                                                                                                            
     "An Act relating to compliance with federal education                                                                      
     laws; relating to public school accountability; and                                                                        
     providing for an effective date."                                                                                          
3:07:54 PM                                                                                                                    
REPRESENTATIVE WES  KELLER, SPONSOR, explained  that he would                                                                   
be  happy to  provide  a general  overview  of  the bill  and                                                                   
answer any questions  members might have. However,  he wanted                                                                   
to first address the issue of the bill's fiscal note.                                                                           
Representative   Keller   began   by   asking   for   serious                                                                   
consideration of  and action on the bill. The  bill addressed                                                                   
three  sections  of  law.  The  first  had  to  do  with  the                                                                   
reporting requirements  for school districts. The  second was                                                                   
the  accountability section  which laid  out the  assessments                                                                   
and  different issues  related to  the No  Child Left  Behind                                                                   
(NCLB) Act,  the Every Student  Succeeds Act (ESSA),  and the                                                                   
duties of  the commissioner.  He explained  that much  of the                                                                   
bill  addressed housekeeping  issues. For  example, with  the                                                                   
ESSA there  was a  new emphasis  on local  control and  local                                                                   
input. He  referred to Section  6, page  3, line 26  where it                                                                   
talked about  the assessment process.  It required  the local                                                                   
input  of the  local school  district and  the teachers.  The                                                                   
most  colorful part  of  the bill  was  in  the last  section                                                                   
where  it  pushed   the  pause  button  on   standards  based                                                                   
assessments  until  the  Department of  Education  and  Early                                                                   
Development  and the  school  board could  come  back with  a                                                                   
report on the  totality of the state's section  of law, Title                                                                   
14, as it related to accountability  and assessments and with                                                                   
recommendations for  any changes. Most importantly  the group                                                                   
would  come  back  with  an assessment  plan  that  could  be                                                                   
implemented. He pointed to page 6 of the bill.                                                                                  
Representative Keller next wanted  to address the question as                                                                   
to whether the bill would cost  the state money. He contended                                                                   
that it  would not. However, he  was not confident  enough in                                                                   
bringing a zero fiscal note from  the DEED. He had supporting                                                                   
opinions from various  entities. He had a memo  from the U.S.                                                                   
Department  of Education  that  he would  be  passing out  to                                                                   
members  (Copy  on file).  He  relayed  that he  and  Senator                                                                   
Dunleavy   had  met   telephonically   with  Adam   Honeysett                                                                   
[Managing Director  of state and local outreach  for the U.S.                                                                   
Department of  Education] and  Ann Whalen [Senior  Advisor to                                                                   
the Secretary  of Elementary and  Secondary Education  of the                                                                   
U.S.  Department  of  Education]. They  subsequently  sent  a                                                                   
memo that  was forwarded  to the State  of Utah.  He wondered                                                                   
what  would  happen   if  the  state  did  not   fulfill  the                                                                   
requirements  laid  out in  NCLB  and  ESSA. He  mentioned  a                                                                   
handout  that members  had  in  their packets  (Letter  dated                                                                   
February  3, 2016  from Assistant  Secretary Deborah  Delisle                                                                   
to Commissioner  Mike Hanley:  copy on  file). He pointed  to                                                                   
number  3  on  page  3.  He  read   the  question  about  the                                                                   
consequences  of a state  or district  that failed  to adhere                                                                   
to the federal assessment requirements.                                                                                         
Representative  Keller  explained that  in  order  to have  a                                                                   
fiscal note,  there had to be  a decision somewhere  that the                                                                   
state  failed to  comply. He  contended  that it  would be  a                                                                   
difficult step  for the U.S.  Department of Education  to get                                                                   
over because the  intent of the bill was to take  a break and                                                                   
do a better  job of complying in terms of  accountability and                                                                   
assessment  issues. In other  words, if  there was  a failure                                                                   
to comply  enforcement actions could  be taken. There  were 7                                                                   
things  that could  be done if  the state  refused to  comply                                                                   
with the  requirements. He argued  again that it was  not the                                                                   
3:13:36 PM                                                                                                                    
Representative  Guttenberg  asked  Representative  Keller  to                                                                   
identify the  full document. Representative  Keller responded                                                                   
that  the full  document  was a  memo  from Deborah  Delisle,                                                                   
Assistant  Secretary of  the  U.S. Department  of  Education.                                                                   
The  memo  was  addressed to  Commissioner  Mike  Hanley.  He                                                                   
thought it was  the best response to the question  about what                                                                   
happened  to states  that did  not  comply. He  was happy  to                                                                   
supply the letter to the committee.                                                                                             
Co-Chair  Thompson  relayed that  he  would have  the  letter                                                                   
Representative  Keller  continued to  explain  that taking  a                                                                   
break  would   not  be  a   new  precedence.  The   State  of                                                                   
California took  a 3-year  break to review  its laws  and was                                                                   
receiving  reports. The  difference for  California was  that                                                                   
it negotiated  the  process as  it went along.  The State  of                                                                   
Alaska was in  a situation where there were  failed tests and                                                                   
angry  parents.  He  relayed  that the  ESSA  would  go  into                                                                   
effect  in  August  2016.  He   referred  back  to  the  U.S.                                                                   
Department's  letter  indicating that  it  was  early in  the                                                                   
process of implementing  the ESSA and many decisions  had not                                                                   
been  made yet.   He  thought  that it  was  logical for  the                                                                   
State  of Alaska to  take a  break to  develop an  assessment                                                                   
plan  and  to  conduct  a review  of  the  state's  laws  and                                                                   
regulations  having to do  with ESSA.  He reported  that ESSA                                                                   
afforded more local control.                                                                                                    
Representative  Keller  next   referred  to  page  4  of  Ms.                                                                   
Delisle's  letter  that addressed  the  specific  enforcement                                                                   
actions. He read directly from the letter:                                                                                      
     "The specific enforcement action (s) the Department of                                                                     
     Education would take depends on the severity of non-                                                                       
Representative  Keller surmised  that  Alaska would  unlikely                                                                   
experience   severe   enforcement   actions  based   on   the                                                                   
intention  of  taking a  break  to  get things  accurate.  He                                                                   
noted that  the state would not  be refusing to  do anything.                                                                   
Rather, the  state was taking  a break. He also  informed the                                                                   
committee that the  money was Title "A" money:  federal money                                                                   
designated  to be  dispersed to  states with  the attempt  to                                                                   
make  things equitable  for  disadvantaged  students. In  the                                                                   
act of  applying for  Title A money  the state promised  that                                                                   
it would follow  all of the rules. One of the  rules was that                                                                   
Alaska  had  to test  grades  3  to 8  and  a grade  in  high                                                                   
school. He  thought Alaska was  in an uncomfortable  position                                                                   
because  The Alaska  Measures  of Progress  (AMP) failed.  He                                                                   
noted that  in the  previous week  in Education Weekly  there                                                                   
was  a report  on  different states  and  it discussed  state                                                                   
school boards across  the nation feeling the  urgency to flex                                                                   
muscle. He claimed  that what Alaska was trying to  do was to                                                                   
reinsert itself  back into the education policy  business. He                                                                   
continued  that   the  money  had  gone  directly   into  the                                                                   
department and, in  turn, the department had given  it to the                                                                   
districts.  He believed  that having input  in the  education                                                                   
process was critical.                                                                                                           
3:18:42 PM                                                                                                                    
Representative Keller  continued to discuss the  issue of the                                                                   
assessment.  He  talked about  dealing  with the  parents  of                                                                   
students. He  thought it  was a mistake  to choose  the wrong                                                                   
people  to handle  the subject.  He  believed people  working                                                                   
for the  state wanted  a good  assessment plan.  He had  also                                                                   
had the  opportunity to get to  know some of the  new members                                                                   
of the State  Board of Education and was impressed.  He urged                                                                   
the  committee to  proceed with  the legislation.  He had  no                                                                   
problem with the indeterminate fiscal note.                                                                                     
Representative  Gattis  thanked   Representative  Keller  for                                                                   
bringing  the legislation  forward.  She  thought  it was  an                                                                   
ideal  time to  be  looking at  the state's  assessment.  She                                                                   
thought it was  a good idea to think about  pushing the pause                                                                   
or reset  button and  mentioned the  state might be  eligible                                                                   
for a  waiver. She liked the  option of applying  hind sight.                                                                   
Other states had  been able to do so. She thought  the timing                                                                   
was perfect.                                                                                                                    
Representative  Keller responded  that the  worst case  would                                                                   
be  that the  legislature would  pass  the law  and the  U.S.                                                                   
Department  of Education would  not approve  of it.  It would                                                                   
take  some  time before  the  state  received any  notice  of                                                                   
disapproval. He  supposed that by  such time the  state would                                                                   
be able to complete its own assessment.                                                                                         
3:23:14 PM                                                                                                                    
Representative  Kawasaki  referred  to  the letter  that  was                                                                   
handed  out during  the meeting.  The  letter indicated  that                                                                   
the U.S.  Department of  Education could  withhold a  portion                                                                   
of  the state's  Title  1  Part  A administrative  funds  and                                                                   
programmatic funds. He wondered what the value equated to.                                                                      
Representative   Keller  suggested  Representative   Kawasaki                                                                   
direct  his question  to the DEED.  He pointed  out that  the                                                                   
letter specifically  stated "administrative  funds"  would be                                                                   
at  risk.  He relayed  that  administrative  funds  would  be                                                                   
withheld  before program  funding  was revoked.  He had  been                                                                   
told by  the Department of Education  that 70 percent  of the                                                                   
revenue  for the  department was  federal money.  He did  not                                                                   
know what portion was Title 1A.                                                                                                 
Representative  Gara asked  about the  implementation of  the                                                                   
ESSA  adopted in  the prior  year.  He wondered  if the  bill                                                                   
reestablished  the  designation  of  schools.  Representative                                                                   
Keller  responded that  the legislation  did  not change  the                                                                   
state's  law regarding  the designation  process. One  of the                                                                   
requirements  was for the  school system to  give a  grade to                                                                   
schools  and to  assign  a designation  and  a  grade to  the                                                                   
state  education system.  However,  the state  had never  set                                                                   
any guidelines  for grading. There  was one slight  change in                                                                   
the bill that  required the DEED to assign  a designation for                                                                   
the state  public school system  based on the  proficiency of                                                                   
students compared to other states.                                                                                              
Representative  Gara  wondered   if  the  designations  under                                                                   
state law  were adopted  because of the  passage of  the NCLB                                                                   
Act. Representative  Keller responded in the  affirmative and                                                                   
added there  was not a  lack of interest  in knowing  how the                                                                   
state's school system was performing.                                                                                           
3:26:51 PM                                                                                                                    
Representative  Gara remembered one  of the largest  flaws of                                                                   
the  federal designation  system was  that although  teachers                                                                   
and  a school's  administration  were doing  a  good job  and                                                                   
students were  making improvements, given where  the students                                                                   
were starting  or their  home life, some  of them  were still                                                                   
failing. The designation  was influenced. He wondered  if the                                                                   
state   still    maintained   the   same    grading   system.                                                                   
Representative  Keller admitted  that in  some ways the  bill                                                                   
kicked  the can  down  the road.  However,  it  called for  a                                                                   
review process.                                                                                                                 
Representative  Gara asked if  it was  more feasible  to come                                                                   
up with  a better school ranking  system rather than  the one                                                                   
from the  NCLB Act. Representative  Keller indicated  that it                                                                   
would be a monumental  task. The bill was an  attempt to look                                                                   
at  things more  closely  and get  further  input from  local                                                                   
school  districts, parents,  and  students.  There were  many                                                                   
people in  the state that had  a lot invested in  the current                                                                   
system. He  suggested that the  bill provided a  step forward                                                                   
to get  collaborative input on  how to proceed, but  it would                                                                   
not fix all of the problems.                                                                                                    
Representative  Wilson relayed  the state  did not  currently                                                                   
use  the same  system to  grade  the state's  schools as  was                                                                   
used when  the NCLB Act was  in place. She reported  that the                                                                   
state  changed  it  with  a  waiver,   imposed  more  teacher                                                                   
accountability,  and switched  to  a star  rating system  for                                                                   
school  performance.  She  had  just  read  an  article  that                                                                   
stated that  the new testing  that was most recently  imposed                                                                   
was a failure  because of technical and computer  issues. She                                                                   
wanted  Representative Keller's  take on  classroom time  and                                                                   
teaching versus continuing tests.                                                                                               
Representative Keller  restated that it was a  time of crisis                                                                   
with  several  loose  ends needing  resolution.  He  believed                                                                   
testing was critical  and important in education  in order to                                                                   
better  understand the  educational  needs  of each  student.                                                                   
From a teacher's  perspective student learning  was extremely                                                                   
important,  and  from  the state's  perspective  in  spending                                                                   
money, accountability  was very  important. He felt  that the                                                                   
legislation provided an opportunity to come together.                                                                           
3:31:58 PM                                                                                                                    
Representative  Gattis  responded  to  Representative  Gara's                                                                   
comment.  She asserted  that there  were  several things  the                                                                   
state placed into  statute that dealt with the  NCLB Act. She                                                                   
thought the  state would definitely  have to conduct  another                                                                   
review.  She added  that  with  the signing  of  the ESSA  in                                                                   
December 2015  states were still  trying to figure  out their                                                                   
options  and  what  was  allowed.  She  believed  there  were                                                                   
several  things at  play and that  the state  should not  get                                                                   
ahead  of  itself. She  thought  the  bill helped  press  the                                                                   
pause  button  and to  come  together.  There would  be  huge                                                                   
changes in reporting,  the statute, how the  state graded its                                                                   
schools,  and   how  it  held   its  teachers   and  students                                                                   
accountable. She  agreed with Representative Gara  that there                                                                   
was a  flaw in  the system.  There were  folks that  were not                                                                   
graded  on  their  progress.  Teachers  that  could  help  to                                                                   
advance  a  student from  a  second  grade proficiency  to  a                                                                   
third or fourth  grade proficiency were not  given due credit                                                                   
because of  the student not  being proficient in  an expected                                                                   
grade.  There  were  huge  challenges   for  the  state.  She                                                                   
thought in  going through the  process and slowing  down, the                                                                   
state would have an advantage.                                                                                                  
Vice-Chair Saddler  referred to Section  2, page 2,  lines 9-                                                                   
10  of the  bill.  It  described  that the  department  would                                                                   
inform the  governing body  of the  designations assigned  to                                                                   
the  district  and to  the  state  public school  system.  He                                                                   
wondered  who applied  the designation  to  the state  public                                                                   
school  system. Representative  Keller  clarified that  there                                                                   
was a  section of  the law  that drove  the designation  that                                                                   
was not in the legislation. He referred to AS 14.03.123a.                                                                       
Vice-Chair Saddler read from statute AS 14.03.123a:                                                                             
     (a) By  September 1 of  each year, the department  shall                                                                   
     assign a  performance designation to each  public school                                                                   
     and  school  district and  to  the state  public  school                                                                   
     system in accordance with (f) of this section.                                                                             
Vice-Chair Saddler  relayed that later  on in (g)  it defined                                                                   
"state   public   school   system."    He   asked   for   the                                                                   
representative to  provide a couple examples of  the elements                                                                   
of a public  school system by which Alaska's  system could be                                                                   
compared to those of other states.                                                                                              
Representative   Keller  responded   that  in  drafting   the                                                                   
legislation  he  did not  want  to  get specific  about  what                                                                   
would  be used. It  stated that  the state  board would  make                                                                   
the regulations  for the determination.  He relayed  that the                                                                   
only  tool that  did a  proficiency  comparison was  National                                                                   
Assessment  of Educational  Progress  (NAEP).   The bill  did                                                                   
not designate  what was to  be used other  than it had  to be                                                                   
based on proficiency.  There were tests that  were comparable                                                                   
that the  board could  look at  using. He  left the  language                                                                   
broad on purpose.                                                                                                               
3:36:49 PM                                                                                                                    
Vice-Chair  Saddler  referred  to  the  indeterminate  fiscal                                                                   
note.  He highlighted  a  couple of  places  in the  analysis                                                                   
section  of  the fiscal  note  that  stated that  the  fiscal                                                                   
impact  could  not  be  determined   because  of  a  lack  of                                                                   
measures  necessary  to  estimate  costs.  He  expressed  his                                                                   
concerns  about  going  ahead   with  an  assessment  without                                                                   
knowing  the designations  or measures  or the  price of  the                                                                   
Representative  Keller  highlighted that  the  bill placed  a                                                                   
tool  in the  tool box  for the  commissioner  and the  state                                                                   
board in  interpreting and figuring  out how the  state would                                                                   
respond  to forthcoming  regulations.  It  was  not that  the                                                                   
state would be  incurring a cost by some  federal enforcement                                                                   
act that  worried him. It  was more that  the state  would be                                                                   
at the  table with  the federal  government trying  to figure                                                                   
out what was going on.                                                                                                          
Vice-Chair Saddler  did not want to lose the  $200 million of                                                                   
federal   money   in  impact   aid.   Representative   Keller                                                                   
responded that it  happened one year at a time.  If there was                                                                   
a  threat of  losing  millions of  dollars  of federal  money                                                                   
legislation would  be before the committee again.  He was not                                                                   
particularly worried  about the  federal money but  he wanted                                                                   
it to  show up  on the  fiscal note  as indeterminate  rather                                                                   
than zero. However,  at present he would be  comfortable with                                                                   
a zero fiscal note.                                                                                                             
Representative Guttenberg  referred to Section 8,  page 6, on                                                                   
line  16. He  wondered if  the  bill placed  the standards  -                                                                   
based assessment  on hold  between July 1,  2016 and  July 1,                                                                   
2018. The  bill would not  allow the first administration  of                                                                   
whatever plan  that was  developed until  the school  year of                                                                   
2020.  There  was  always  a   contradiction  between  having                                                                   
assessments  and not  having assessments  and standards  when                                                                   
speaking  with   teachers.  He  wondered  if   students  fall                                                                   
between  the seams  by not  having something  when they  were                                                                   
applying for  college. He was  concerned that  colleges would                                                                   
reject Alaskan  students  because they  did not have  testing                                                                   
or  grades  to compare  with  those  of students  from  other                                                                   
states.  He  thought   the  change  being  proposed   in  the                                                                   
legislation was  significant. He  asked if Alaska's  students                                                                   
would  fall   through  the   cracks.  Representative   Keller                                                                   
responded  that  members  of  the  committee  understood  the                                                                   
dynamics of  what happened  in the  districts better  than he                                                                   
did.  He mentioned  the most  recent  education chairman  and                                                                   
deferred to a district expert.                                                                                                  
3:41:32 PM                                                                                                                    
Representative   Munoz  asked   if   school  districts   were                                                                   
supportive  of the  bill. Representative  Keller stated  that                                                                   
districts were  concerned with  anything that might  threaten                                                                   
federal money.  However, he received positive  responses from                                                                   
many  districts  about a  possible  change. He  thought  that                                                                   
districts' fears were over-rated.                                                                                               
Representative  Munoz asked if  there was enough  flexibility                                                                   
for states  to figure things  out by  2020 with the  new ESSA                                                                   
Representative  Keller  responded  that  in  his  opinion  he                                                                   
thought yes.  He added that the  state did not know  what the                                                                   
response of  the federal government  would be. The  state was                                                                   
not  simply  refusing  to  comply.   Rather,  the  state  was                                                                   
wanting to do it correctly with some time to do so.                                                                             
Representative  Munoz  clarified that  all  testing would  be                                                                   
discontinued   from   third   grade   when   testing   began.                                                                   
Representative Keller  responded that she was  incorrect. The                                                                   
department  would not  be  able to  require  assessment-based                                                                   
testing.  He  elaborated that  when  a  school took  Title  1                                                                   
monies it was  a promise to conduct testing.  The requirement                                                                   
did not go away.  The state was halting the  state department                                                                   
from using  the sanction  on the  mandate on local  districts                                                                   
to administer the assessment-based test.                                                                                        
Representative  Munoz   asked  whether  the   district  would                                                                   
continue  with the testing  if it  received federal  funding.                                                                   
She wondered  if the state  department could not  require the                                                                   
testing.  Representative Keller  responded affirmatively.  He                                                                   
indicated  that   the  Department  of  Education   and  Early                                                                   
Development  agreed  to  require  the  testing.  The  federal                                                                   
government  required   the  state   to  offer  the   test  to                                                                   
everyone. It required  districts to administer  the tests. It                                                                   
did not  require parents  to take  the test. The  requirement                                                                   
stated  that the  test  had to  be administered  to  everyone                                                                   
fairly.  No group  of people could  not be  excluded. It  was                                                                   
part of the NCLB Act which was in effect until August 2016.                                                                     
3:45:11 PM                                                                                                                    
Representative   Gattis    wondered   if   she    had   heard                                                                   
Representative  Keller correctly  that the  schools would  be                                                                   
able to  continue their  testing. She  recognized that  other                                                                   
states had  applied for  waivers or  the opportunity  to slow                                                                   
the process down  to get things right. She  wanted to confirm                                                                   
that  Alaska  would  not  be jumping  "out  of  the  box"  in                                                                   
comparison  to  other  states.    She  thought  the  Title  1                                                                   
dollars were a  huge concern. She asked if it  was his intent                                                                   
to decline  the federal dollars  or to just slow  the process                                                                   
down to  get things correct  using the federal  dollars while                                                                   
going through the  process. She opined that the  new ESSA was                                                                   
a  moving  target that  needed  to  be better  understood  in                                                                   
terms of what it allowed.                                                                                                       
Representative  Keller  responded   that  by  taking  federal                                                                   
dollars  the  state  was  obligated  to  operate  as  it  was                                                                   
currently operating  - basically operating as  an outpost for                                                                   
policy   from  the   U.S.   Department   of  Education.   The                                                                   
legislation  would allow  the  commissioner  to have  another                                                                   
tool in the toolbox to negotiate.                                                                                               
Co-Chair  Thompson  indicated   that  the  meeting  would  be                                                                   
recessed  for 10  minutes. Upon  reconvening  representatives                                                                   
from the DEED would be testifying on HB 156.                                                                                    
3:48:08 PM                                                                                                                    
AT EASE                                                                                                                         
3:57:26 PM                                                                                                                    
Co-Chair  Thompson  relayed  that Ms.  MacKinnon  and  Deputy                                                                   
Commissioner Walter available from the DEED.                                                                                    
BETTY  WALTERS, INTERIM  DEPUTY  COMMISSIONER, DEPARTMENT  OF                                                                   
EDUCATION AND EARLY DEVELOPMENT, introduced herself.                                                                            
MARGARET     MACKINNON,     DIRECTOR,      ASSESSMENT     AND                                                                   
ACCOUNTABILITY,    DEPARTMENT   OF   EDUCATION    AND   EARLY                                                                   
DEVELOPMENT, introduced herself.                                                                                                
Representative  Kawasaki  referred  to  the question  he  had                                                                   
asked the  sponsor of the bill  dealing with funding.  In the                                                                   
memo members  received written to Commissioner  Hanley stated                                                                   
that  failure  to comply  with  the  assessment  requirements                                                                   
could place  Title 1, Part A  funds in jeopardy.  He wondered                                                                   
how  much funding  could be  at risk.  Ms. MacKinnon  replied                                                                   
that Title  1a funding  was approximately  $40 million  which                                                                   
included  money that  went out  to each of  the districts  in                                                                   
the state.                                                                                                                      
Representative  Kawasaki continued  to reference portions  of                                                                   
the memo  to Commissioner  Hanley  that went  on to say  that                                                                   
the state  could find  itself out of  compliance with  a wide                                                                   
range of  other programs that  required the state  assessment                                                                   
results.  One of  them was  school  improvement grants,  ESSA                                                                   
Title  III, Part  B, which  dealt with  the Individuals  with                                                                   
Disabilities  Act. Another  was  programs  for rural  schools                                                                   
under ESSA  Title IV.  Additionally it  could affect  migrant                                                                   
education  under ESSA  Title 1,  Part C. He  wondered if  she                                                                   
had a value  for each listed. Ms. MacKinnon  responded in the                                                                   
affirmative.  She stated  that  based on  the information  in                                                                   
the letter, the  total amount of funds that  were represented                                                                   
would be over $99 million for FY 2017.                                                                                          
3:59:55 PM                                                                                                                    
Representative Wilson  asked if it  was an opportunity  to be                                                                   
able to reevaluate  what kind of testing the  state wanted to                                                                   
conduct. She  wondered if it  would provide more  opportunity                                                                   
and   flexibility  to   utilize  the   testing  that   school                                                                   
districts  were  already  doing   such  as  the  Measures  of                                                                   
Academic Progress  (MAP) testing.  She suggested that  it was                                                                   
a  reset of  sorts. She  believed  the bill's  intent was  to                                                                   
utilize the  opportunity to  do what  was best for  Alaskans.                                                                   
The most recent testing was not very successful.                                                                                
Ms.   MacKinnon  reported   that   she  had   had  a   recent                                                                   
conversation  with Anne  Whalen, the  assistant secretary  at                                                                   
the  U.S. Department  of  Education to  clarify  some of  the                                                                   
requirements under  the ESSA. She had provided  Dr. McCauley,                                                                   
the  department's   interim  commissioner,   a  letter.   She                                                                   
continued  that  the passage  of  the  ESSA did  provide  the                                                                   
state  more  flexibility  in  certain  areas.    Those  areas                                                                   
primarily   related    to   the   design   of    the   school                                                                   
accountability  system  that had  some  required  indicators,                                                                   
including achievement  on the  state assessments, and  also a                                                                   
measure of  growth. In other  words, not everything  would be                                                                   
based only on  the assessment. There was some  flexibility in                                                                   
the  assessment and  a couple  of new  options. However,  the                                                                   
state  was  still   required  to  give  the   same  statewide                                                                   
assessment to measure  the state's standards to  all students                                                                   
in grades 3 through  8 annually and at least  once in school.                                                                   
There was  an option  allowing a  state to approve  districts                                                                   
to request  a local  choice of  a nationally recognized  high                                                                   
school  assessment comparable  to and  reported similarly  to                                                                   
the  results  on  the state's  assessment.  The  option  only                                                                   
applies to high school and not to grades 3 through 8.                                                                           
Representative  Wilson  asked if  other  states had  obtained                                                                   
waivers.  She supposed  other  states  were taking  a  slower                                                                   
approach  to  making  the  necessary  changes  and  doing  it                                                                   
correctly. Ms.  MacKinnon reported having talked  with people                                                                   
who had  worked with the  state department in  California and                                                                   
also asked Anne  Whalen at the U.S. Department  of Education.                                                                   
The  situation  in  California  was that  they  were  in  the                                                                   
process of implementing  the smarter balanced  assessment. In                                                                   
the  year  in  which  the  assessments   were  field  tested,                                                                   
California used those  assessments in a field  test mode then                                                                   
transitioned  into the  regular assessment  in the  following                                                                   
year. Some of the  transition might have had to  do with when                                                                   
the assessments were  used or growth from the  assessments in                                                                   
California's  accountability system.  She thought having  the                                                                   
assessment  was  different. Assistant  Secretary  Whalen  had                                                                   
indicated that  no state  had been able  to receive  a waiver                                                                   
of the assessment requirements.                                                                                                 
4:03:35 PM                                                                                                                    
Representative   Wilson   noted   that  she   had   requested                                                                   
previously that the  state would not make up its  own test or                                                                   
cut  scores. She  did not  believe  it was  fair to  Alaska's                                                                   
children.  The  State  had not  been  successful  again.  She                                                                   
hoped  that  the state  had  learned  that there  were  great                                                                   
assessments  available. She  contended  that it  was time  to                                                                   
stop trying  to reinvent  the wheel and  to start  looking at                                                                   
assessments that  were already  available for less  money and                                                                   
allowed  for comparison  of Alaska's  kids to  kids in  other                                                                   
Representative  Guttenberg   asked  about   the  department's                                                                   
evaluation  of  the bill.  He  also  asked how  difficult  it                                                                   
would be  to align  assessment tests  if they were  different                                                                   
from  school  district  to  school  district.  Ms.  MacKinnon                                                                   
responded   that  the   state  would   have  a  high   school                                                                   
assessment.   The  state  could   opt  to  allow   individual                                                                   
districts  to  choose  a nationally  recognized  high  school                                                                   
assessment  such as  the ACT  (American  College Testing)  or                                                                   
the SAT  (Scholastic Aptitude  Test). The U.S.  Department of                                                                   
Education was  clear that  the ACT and  the SAT were  not the                                                                   
only  examples and  that  it would  be up  to  the states  to                                                                   
determine whether  to allow a  district to choose to  give an                                                                   
alternate   assessment.   The   test   would   have   to   be                                                                   
administered  to all students  in a  district and would  have                                                                   
to  measure and  be able  to be  reported  comparably to  the                                                                   
state's   assessment  (designed   to   measure  the   state's                                                                   
standards).   It  was   a   process  of   determining   other                                                                   
assessments that  could also be shown to measure  the state's                                                                   
Representative  Guttenberg assumed that  it was feasible  and                                                                   
not  as  difficult  as  it  could  be.  He  asked  about  the                                                                   
department's consideration  of the bill  in terms of  what it                                                                   
did,  its implementation,  and  the  risk of  losing  federal                                                                   
funding if  it passed. Ms.  MacKinnon responded that  the way                                                                   
in which the  bill was written would prohibit  the department                                                                   
from  requiring   districts  to   take  a  test   within  the                                                                   
following  2 school years.  She thought  that it  potentially                                                                   
put the state at  risk for losing Title 1 federal  funds. She                                                                   
reported receiving  a letter that  indicated the  state would                                                                   
be  out  of   compliance.  She  was  working   with  district                                                                   
superintendents  and stake holders  to look  at what  kind of                                                                   
assessment  the  state  would  want  to  implement  over  the                                                                   
following 2  years. Alaska  had choices and  did not  have to                                                                   
have  a  custom  assessment,   only  one  that  measured  the                                                                   
state's  standards. She  suggested that  the state might  end                                                                   
up   with  a   system   of   assessments.  There   was   some                                                                   
flexibility. She  reiterated that the  state would be  out of                                                                   
compliance if it did not administer an assessment.                                                                              
Representative   Guttenberg    thought   it   would    be   a                                                                   
considerable  risk.  He  wanted  to  weigh  and  measure  the                                                                   
state's  ability to  do its own  assessment  and the risk  of                                                                   
lost funding which would affect Alaska immediately.                                                                             
4:08:34 PM                                                                                                                    
Co-Chair Thompson OPENED HB 156 to public testimony.                                                                            
Co-Chair Thompson CLOSED public testimony.                                                                                      
4:09:24 PM                                                                                                                    
Vice-Chair  Saddler reviewed  the  indeterminate fiscal  note                                                                   
from  DEED.  The  appropriation  was  Teaching  and  Learning                                                                   
Support   and  the   allocation   was  Student   and   School                                                                   
Achievement.  The Office of  Budget and Management  component                                                                   
number was  2796. The amount  was zero for  FY 17 and  in the                                                                   
future it was indeterminate.                                                                                                    
Vice-Chair  Saddler MOVED  to REPORT  CHHB 156  (EDC) out  of                                                                   
committee   with    individual   recommendations    and   the                                                                   
accompanying fiscal note.                                                                                                       
Representative Kawasaki OBJECTED for discussion.                                                                                
Representative  Kawasaki relayed  having  a discussion  about                                                                   
the previous bill  dealing with the BGCSB with  a fiscal note                                                                   
indicating  a  cost of  about  $20  thousand for  travel.  He                                                                   
thought  that  there  was  a   larger  picture  to  look  at.                                                                   
Although  the   fiscal  note  detailed  potential   loses  of                                                                   
federal  education funds  and impact aide  that could  equate                                                                   
to $200.2  million. He had not  seen an updated  letter other                                                                   
than the one  dated February 3, 2014 to  Commissioner Hanley.                                                                   
It  seemed like  there  might be  more  information from  the                                                                   
department  that  they  had  received   a  subsequent  letter                                                                   
stating  that  if,  in  fact,   the  state  did  not  have  a                                                                   
standardized  test in 2017  and 2018 it  could cost  Alaska a                                                                   
large amount  of money. He  did not feel comfortable  letting                                                                   
the bill  out of  committee without  fully understanding  its                                                                   
impact. He  thought it was  bad business to push  legislation                                                                   
forward without knowing the consequences to the state.                                                                          
Representative Kawasaki WITHDREW his OBJECTION.                                                                                 
Representative Guttenberg OBJECTED for discussion.                                                                              
Representative  Wilson   thought  the  state   had  a  unique                                                                   
opportunity.  She thought  that  the letter  to  Commissioner                                                                   
Hanley from  the U.S. Department  of Education  conveyed that                                                                   
each school district  could design a test to be  used for the                                                                   
purpose  of assessing  state  standards.  She favored  moving                                                                   
the bill forward.                                                                                                               
Representative   Guttenberg  spoke   to  his  objection.   He                                                                   
indicated that without  having a better understanding  of the                                                                   
true risk  or implications  of losing  about $90 million  per                                                                   
year  in   federal  funding,   he  could   not  support   the                                                                   
legislation. The  bill sponsor  had mentioned coming  back in                                                                   
the following year  to fix any issues. However,  he mentioned                                                                   
that even a  brief simple bill took months  to travel through                                                                   
the  legislature. He  did  not want  to  risk losing  federal                                                                   
Representative  Gattis believed  the  state was  in a  "Catch                                                                   
22" position  and thought moving  forward would be  the right                                                                   
thing to do currently. She would be supporting the bill.                                                                        
4:14:53 PM                                                                                                                    
AT EASE                                                                                                                         
4:21:34 PM                                                                                                                    
Representative  Kawasaki   discussed  the  letter   from  the                                                                   
United States  Department of Education  dated, April  1, 2016                                                                   
(copy  on  file).  He  believed   the  letter  conveyed  that                                                                   
federal   funds  and   impact   aid  could   potentially   be                                                                   
jeopardized and opposed the legislation.                                                                                        
4:22:24 PM                                                                                                                    
Representative Gattis  remarked that although  she understood                                                                   
Representative  Kawasaki's  point  of view,  she  hoped  that                                                                   
prior to  the bill getting to  the floor there would  be more                                                                   
of an  opportunity to take a  harder look at  the legislation                                                                   
and  some  of the  options  other  states had  executed.  She                                                                   
would be a "yes" vote.                                                                                                          
Representative Guttenberg MAINTAINED his OBJECTION.                                                                             
A roll call vote was taken on the motion.                                                                                       
IN FAVOR: Gattis,  Munoz,  Pruitt, Saddler,  Wilson,  Edgmon,                                                                   
OPPOSED: Guttenberg, Kawasaki,                                                                                                  
Representative  Neuman and  Representative  Gara were  absent                                                                   
from the vote.                                                                                                                  
The MOTION PASSED (7/2).                                                                                                        
CSHB  156 (EDC)  was REPORTED  out  of committee  with a  "do                                                                   
pass"   recommendation   and   with  a   previously   publish                                                                   
indeterminate fiscal note: FN1 (EED).                                                                                           
4:23:42 PM                                                                                                                    
AT EASE                                                                                                                         
4:25:11 PM                                                                                                                    
4:25:24 PM                                                                                                                    
Co-Chair  Thompson  called  the  meeting back  to  order  and                                                                   
indicated that there was a committee substitute.                                                                                
HOUSE BILL NO. 209                                                                                                            
     "An Act relating to an Alaska Water and Sewer Advisory                                                                     
     Committee; and providing for an effective date."                                                                           
Vice-Chair  Saddler MOVED  to  ADOPT the  proposed  committee                                                                   
substitute  for  HB  209  (FIN),  Work  Draft  (29-LS0306\P).                                                                   
There being NO OBJECTION, it was so ordered.                                                                                    
BRODIE  ANDERSON,   STAFF,  REPRESENTATIVE   STEVE  THOMPSON,                                                                   
spoke to  two changes in  the bill. The  first change  was in                                                                   
Section  2, page  2,  line 3.  It deleted  the  number 9  and                                                                   
replaced  it with  10. The second  change was  in Section  2,                                                                   
page 2, line 16. It added the following:                                                                                        
     "A  senior  employee  with  expertise  in  environmental                                                                   
     health  and engineering  from a  large nonprofit  tribal                                                                   
     health organization  operating in the stat  appointed by                                                                   
     the members of the bush caucus; and"                                                                                       
Mr.   Anderson  relayed   that   Representative  Edgmon   was                                                                   
available to speak about the impacts of the changes.                                                                            
Representative Edgmon  explained that the change  would bring                                                                   
the  Alaska   Native  Tribal   Health  Consortium   into  the                                                                   
advisory committee.  He thought it was a change  that rounded                                                                   
out  the make-up  of  the advisory  committee  and  it was  a                                                                   
worth-while addition to the bill.                                                                                               
Vice-Chair  Saddler  had no  objection  to the  addition  but                                                                   
wanted  to  see  a  definition  of  the  bush  caucus  and  a                                                                   
membership  list  before  he   could  support  the  committee                                                                   
Mr. Anderson  believed the  sponsor might  be able  to better                                                                   
address  the  full definition.  He  pointed  to the  bill  in                                                                   
Section  2, page  4,  line 2-7,  provided  the definition  of                                                                   
"bush caucus."                                                                                                                  
Vice-Chair  Saddler still  wanted to  see a  list of  current                                                                   
members.  He  supposed   in  reading  the  language   of  the                                                                   
committee  substitute in  Section  2, page  4  it would  mean                                                                   
whomever  happened to  be representing  the communities  into                                                                   
the  future. He  wanted  to see  a  list of  current  members                                                                   
before the bill went to the floor.                                                                                              
Co-Chair Thompson would have the list produced.                                                                                 
Representative  Guttenberg referred  to  Page 4,  line 2.  He                                                                   
hoped that  it included legislators  that represented  any of                                                                   
the  communities  rather than  all  of the  communities.  The                                                                   
communities  listed  represent  villages  that did  not  have                                                                   
sewer and water at present. He asked if he was correct.                                                                         
4:30:17 PM                                                                                                                    
REPRESENTATIVE   NEIL    FOSTER,   SPONSOR,    DISTRICT   39,                                                                   
introduced  himself. The  villages  listed in  the bill  were                                                                   
communities   currently   unserved.   Bush   Caucus   members                                                                   
currently  included  were  Representatives   Foster,  Nageak,                                                                   
Edgmon, Talerico,  and Herron  and Senators Olson,  Hoffmann,                                                                   
and Bishop.                                                                                                                     
PAUL  LABOLLE,  STAFF,  REPRESENTATIVE  NEIL  FOSTER,  stated                                                                   
that the list  of villages in question was  the list provided                                                                   
by Village Safe Water.                                                                                                          
Representative  Foster emphasized  that the  bill had  a zero                                                                   
fiscal note.                                                                                                                    
Mr. Labolle stated  that the bill essentially  established an                                                                   
advisory   committee  to   look  at  the   gap  between   the                                                                   
established  need  for  water and  sewer  infrastructure  and                                                                   
available  funding.  He  thought everyone  was  in  agreement                                                                   
that it  was unlikely to see  any increase in funding  in the                                                                   
near future.  The main  focus of the  committee would  be how                                                                   
to do the job  better, faster, and cheaper.  Members would be                                                                   
asked to  work telephonically,  as there  would be  no travel                                                                   
budget, and  there would be  no compensation for  members. It                                                                   
required that  the committee  issue a  report on December  1,                                                                   
2017  due  to  the  legislature.   He  was  happy  to  review                                                                   
committee  appointment  and  members   or  be  available  for                                                                   
Co-Chair Thompson encouraged Mr. Labolle to continue.                                                                           
Mr. Labolle referred  to Section 2, page 2, line  4. A member                                                                   
of  the senate  would be  appointed  by members  of the  bush                                                                   
caucus.  He reported  working with  the staff  of the  Senate                                                                   
Community  and Regional  Affairs Committee  to derive  a good                                                                   
definition for bush caucus.                                                                                                     
Representative  Gattis asked  if there  were any  communities                                                                   
that were  served by another  legislator outside of  the bush                                                                   
caucus that  was not included.  Mr. Labolle responded  in the                                                                   
negative.  He  indicated  that  the  comprehensive  list  was                                                                   
reflective  in  the bill.  Additional  people  were  desired.                                                                   
However,  in  trying   to  develop  a  good   definition  for                                                                   
statute, the list was as it stood.                                                                                              
Representative  Gattis specified that  her question  had been                                                                   
Representative  Guttenberg pointed out  that he had  no sewer                                                                   
and water systems in villages within his district.                                                                              
4:35:08 PM                                                                                                                    
Representative    Kawasaki   asked    about   the    selected                                                                   
communities  and  whether  they were  unserved.  Mr.  Labolle                                                                   
responded affirmatively.  He clarified that there  were three                                                                   
types  of  services  that Village  Safe  Water  worked  under                                                                   
including  unserved  communities,   underserved  communities,                                                                   
and  communities   with   upgrades  that   did  not   have  a                                                                   
substantial threat.                                                                                                             
Representative Kawasaki  was not concerned about  the way the                                                                   
bill   was  constructed.   He  commented   that  there   were                                                                   
underserved  rural communities.  He wondered  why they  would                                                                   
not  be included  and, thus,  a  larger list  of bush  caucus                                                                   
members.  Mr. Labolle  relayed  that  it had  been  discussed                                                                   
with  staff in  Community and  Regional  Affairs. The  reason                                                                   
was  to save  paper because  according  to Legislative  Legal                                                                   
every  community  had  to  be  cited  by  name,  rather  than                                                                   
referencing  a list.  The  bill  would have  been  physically                                                                   
much larger.                                                                                                                    
Representative   Wilson   asked  about   what   distinguished                                                                   
qualifying  communities from other  communities. Mr.  Labolle                                                                   
deferred   to  Mr.   Griffith  from   Alaska  Native   Health                                                                   
Consortium [Department of Environmental Conservation].                                                                          
Representative Wilson  explained that her question  was posed                                                                   
in  order  to   better  understand  the   difference  between                                                                   
communities  that  did  and  did  not  have  septic  systems.                                                                   
Individual  septic systems  were prominent  in the  Fairbanks                                                                   
North Star Borough.  She wondered if the designation  for the                                                                   
qualifying communities was based on the Clean Water Act.                                                                        
BILL  GRIFFITH,  DEPARTMENT  OF   ENVIRONMENTAL  CONSERVATION                                                                   
(via  teleconference),   answered  that  the   list  included                                                                   
communities  in which there  was no  community or  individual                                                                   
water and sewer  services to individual homes.  It meant that                                                                   
the  community did  not  have  a pipe  system,  or wells  and                                                                   
septic systems  that could  be installed.  There also  was no                                                                   
community  haul system.  The homes  were  without service  in                                                                   
the communities on the list.                                                                                                    
4:38:47 PM                                                                                                                    
Representative  Wilson asked if  they were  unable to  have a                                                                   
system  installed.  She wanted  to  make a  distinction.  Mr.                                                                   
Griffith  responded in  the affirmative.  The department  had                                                                   
been  providing  water and  sewer  services to  rural  Alaska                                                                   
villages.  Generally,  the villages  that  remained were  the                                                                   
ones  where  the  easier  options  were  not  available.  The                                                                   
preferred  option was  to install  wells  and septic  systems                                                                   
anywhere  possible. In  these  particular communities  either                                                                   
there was  no ground water for  wells or there was  no way to                                                                   
put individual  septic  systems in because  of permafrost  or                                                                   
ground water.                                                                                                                   
4:39:49 PM                                                                                                                    
Representative Edgmon  asked Mr. Griffith to list  the myriad                                                                   
of  state and  federal funding  sources  that generally  went                                                                   
into funding water  and sewer projects. He also  asked him to                                                                   
describe the  larger picture  of water  and sewer systems  in                                                                   
rural  Alaska.  Some  communities, although  had  systems  in                                                                   
place,  were  old   and  aging  and  would  be   in  need  of                                                                   
maintenance  at some  point  soon. He  opined  that down  the                                                                   
road without  proper maintenance  and upkeep  of the  systems                                                                   
their efficacy would be in question.                                                                                            
Mr. Griffith  reported that  the Department of  Environmental                                                                   
Conservation  (DEC) received  about  $60  million in  federal                                                                   
funds  to  make   improvements  in  rural  water   and  sewer                                                                   
systems.  He  explained  that  the federal  funding  came  to                                                                   
Alaska  from 3  different  federal  agencies.  The first  was                                                                   
Indian Health Service  (IHS) which did not require  any state                                                                   
match.  The  second was  the  U.S.  Environmental  Protection                                                                   
Agency (EPA) which  provided a grant award through  the State                                                                   
of Alaska  that required some  state match. The  third agency                                                                   
was  the U.S.  Department of  Agriculture  through the  rural                                                                   
development  program which  required  some  state match.  The                                                                   
largest single  funder was  the EPA. There  were a  couple of                                                                   
different ways  that the funding  was allocated.  The funding                                                                   
that came  through the State of  Alaska and required  a state                                                                   
match was  allocated by  the Village  Safe Water Program  and                                                                   
the DEC. The  Indian Health Service funding  was allocated by                                                                   
a  national  Indian  health  service   prioritization  system                                                                   
called the Sanitation  Deficiency System. Both  pots of money                                                                   
used the  same data base of  project needs. The data  base of                                                                   
water  and sewer  project  needs  was updated  yearly.  There                                                                   
were  three types  of projects  listed in  the database.  The                                                                   
first  type was  the first-time  service  project, a  project                                                                   
that provided  water and sewer  to homes for the  first time.                                                                   
He  furthered that  the total  project  need associated  with                                                                   
these types of projects was slightly over $521 million.                                                                         
Mr. Griffith  continued with the  second category  of project                                                                   
need,  upgrades to  address substantial  health threats.  The                                                                   
upgrades  were   significant  improvements  needed   to  keep                                                                   
existing  systems operational  to provide  adequate water  or                                                                   
to  meet   current  regulations.   The  funding   needed  for                                                                   
upgrades was about $300 million.                                                                                                
Mr. Griffith discussed  the third category of  need, upgrades                                                                   
to  benefit   system  operation  and  address   minor  health                                                                   
threats. The  amount was  about $400  million. The  state did                                                                   
not match these  funds. The total funding need  for the types                                                                   
of  projects DEC  provided  funding for  was  just over  $800                                                                   
million.  He reported  that typically  every  year the  state                                                                   
received  about $60  million to  address  the state's  needs.                                                                   
There  was a  significant  gap between  the  amount of  state                                                                   
project  need and  the  amount of  funding  it received  each                                                                   
4:44:49 PM                                                                                                                    
Representative  Edgmon asked  if an advisory  group would  be                                                                   
useful. He  was thinking  about the focus  on the  Arctic and                                                                   
the U.S.  having the chairmanship  of the Arctic  Council for                                                                   
a  couple more  years. Many  of  the underserved  communities                                                                   
were in  the Arctic. He thought  it could not hurt  the cause                                                                   
to  get additional  federal  funding  at  a time  when  state                                                                   
funding had plateaued.                                                                                                          
Mr. Griffith thought  the advisory committee could  be useful                                                                   
in raising  awareness and understanding  about some  of these                                                                   
challenges  in  Alaska  and  nationally.  The  Department  of                                                                   
Environmental  Conservation had  several things  going  on in                                                                   
relation to  the Arctic Council.  There was an  international                                                                   
conference  planned   for  September  2016  to   be  held  in                                                                   
Anchorage  at which  DEC would  be  focusing on  some of  the                                                                   
challenges  at the  conference. An  advisory committee  could                                                                   
be tied in with the conference and other things going on.                                                                       
Mr.  Griffith  informed members  that  a  lot of  the  things                                                                   
called  for  in the  bill  were  already going  on.  However,                                                                   
there  were other  things on  the list  of deliverables  that                                                                   
might  benefit from  having  an  advisory committee  to  work                                                                   
with. The  committee would  be able  to keep the  legislature                                                                   
more  informed  about  things   happening  and  some  of  the                                                                   
challenges that  were being faced.  He thought it  could help                                                                   
the overall effort.                                                                                                             
Vice-Chair Saddler  referred to Section  1, page 1,  line 12.                                                                   
He  asked  about   the  word  "sewer"  system   and  what  it                                                                   
encompassed.   Mr.  Griffith  stated   that  it   applied  to                                                                   
whatever  means an  individual community  had for  collecting                                                                   
sewage  from  individual  homes  and other  buildings  -  the                                                                   
collection  system overall  and  the treatment  and  disposal                                                                   
system the  community used. In  some cases it could  be pipes                                                                   
and  a  community lagoon  and  in  other  cases it  could  be                                                                   
referring to individual septic systems.                                                                                         
Co-Chair Thompson thanked Mr. Griffith for his testimony.                                                                       
4:48:47 PM                                                                                                                    
Vice-Chair Saddler  referred to the same line  that stated it                                                                   
was  the  legislature's  responsibility  to ensure  safe  and                                                                   
sustainable  water and  sewer systems  to all communities  of                                                                   
the state.  He thought it  was a fairly broad,  encompassing,                                                                   
and  generous  statement.   He  wondered  if  he   meant  all                                                                   
communities.  He  asked  about  the  standards.  Mr.  Labolle                                                                   
explained  that  the  same  issue came  up  in  the  previous                                                                   
committee  in House  Community  and  Regional Affairs.  As  a                                                                   
result, the change  was made from "individuals"  in the state                                                                   
to "communities"  in the state.  The state would not  have to                                                                   
provide for a single person at a mining camp, for example.                                                                      
Vice-Chair  Saddler asked  about a standard  or a  definition                                                                   
of  what  the threshold  was  for  communities.  Mr.  Labolle                                                                   
stated  that   the  intent  of   the  bill  was   to  address                                                                   
communities on the Village Safe Water list.                                                                                     
Representative Guttenberg  commented that in Section  2, page                                                                   
3, line  19, he felt  that his issue  was addressed.  Many of                                                                   
the villages he  represented had water or sewer.  However the                                                                   
only thing  worse  than having  a sewer was  having one  that                                                                   
could not be  maintained and remained broken.  He appreciated                                                                   
hearing  about   maintaining  the  state's   investments.  He                                                                   
believed that building  modern systems that were  low in cost                                                                   
and sustainable  was very important  to discuss.  Mr. Labolle                                                                   
stated that one  of the main focuses was to  address the fact                                                                   
that previous systems  had been built to a  standard that was                                                                   
not really  maintainable. The  state was  trying to  get away                                                                   
from systems that could not be maintained.                                                                                      
Representative Edgmon made a humorous remark.                                                                                   
4:51:28 PM                                                                                                                    
Co-Chair Thompson OPENED public testimony.                                                                                      
Co-Chair Thompson CLOSED public testimony.                                                                                      
4:51:56 PM                                                                                                                    
Vice-Chair  Saddler reviewed  the zero  fiscal note from  the                                                                   
Alaska  Legislature. The  appropriation  was the  Legislative                                                                   
council  and the  allocation was  Council and  Subcommittees.                                                                   
The  component  number  from the  Office  of  Management  and                                                                   
Budget  was 783,  and the  fiscal  note was  dated March  25,                                                                   
Vice-Chair  Saddler MOVED  to report  CSHB 209  (FIN) out  of                                                                   
Committee   with    individual   recommendations    and   the                                                                   
accompanying  fiscal note(s).  There being  NO OBJECTION,  it                                                                   
was so ordered.                                                                                                                 
CSHB  209 was  REPORTED out  of  committee with  a "do  pass"                                                                   
recommendation  and with a  previously published  zero fiscal                                                                   
note: FN1 (CRA).                                                                                                                
Co-Chair  Thompson  reviewed  the agenda  for  the  following                                                                   
4:53:03 PM                                                                                                                    
The meeting was adjourned at 4:53 p.m.                                                                                          

Document Name Date/Time Subjects
HB254 Opposing Documents-Email Rolan Ruoss 3-22-2016.pdf HFIN 4/4/2016 1:30:00 PM
HB 254
HB254 Sponsor Statement.pdf HFIN 4/4/2016 1:30:00 PM
HB 254
HB 254 Sunset BGCSB - Mike McCrary Letter.pdf HFIN 4/4/2016 1:30:00 PM
HB 254
HB254 Supporting Documents-BGCS LBA Audit.pdf HFIN 4/4/2016 1:30:00 PM
HB 254
HB254 Supporting Documents-Email Henry D Tiffany IV 1-21-2016.pdf HFIN 4/4/2016 1:30:00 PM
HB 254
HB254 Supporting Documents-Email Paul A Chervenak 2-16-2016.pdf HFIN 4/4/2016 1:30:00 PM
HB 254
HB254 Supporting Documents-Report-Economic Impacts of Guided Hunting Final docx.pdf HFIN 4/4/2016 1:30:00 PM
HB 254
HB254 Supporting Documents-Report-SLC 1 19 16 Division of Corporations Business and Professional Licensi.pdf HFIN 4/4/2016 1:30:00 PM
HB 254
aCS HB 156 Sponsor Statment.pdf HFIN 4/4/2016 1:30:00 PM
HB 156
cCSHB 156S.pdf HFIN 4/4/2016 1:30:00 PM
HB 156
bCSHB0156-X.pdf HFIN 4/4/2016 1:30:00 PM
HB 156
dCSHB 156 Sectional.pdf HFIN 4/4/2016 1:30:00 PM
HB 156
eHB0156A.pdf HFIN 4/4/2016 1:30:00 PM
HB 156
fHB0156-EED Fiscal.pdf HFIN 4/4/2016 1:30:00 PM
HB 156
gCSHB 156 Ed Vote.pdf HFIN 4/4/2016 1:30:00 PM
HB 156
hCSHB 156 researh rpt..pdf HFIN 4/4/2016 1:30:00 PM
HB 156
iCSHB 156 DOE Key Perf Indicators.pdf HFIN 4/4/2016 1:30:00 PM
HB 156
jCSHB 156 2016 DOE-budget Narrative.pdf HFIN 4/4/2016 1:30:00 PM
HB 156
kHB 156 FED LAW REVISE.pdf HFIN 4/4/2016 1:30:00 PM
HB 156
lCSHB 156 Ed Week stories.pdf HFIN 4/4/2016 1:30:00 PM
HB 156
HB 209 Materials - 2015 House Count of Homes Served.pdf HFIN 4/4/2016 1:30:00 PM
HB 209
HB 209 Materials - Alaska Challenge R&D Project.pdf HFIN 4/4/2016 1:30:00 PM
HB 209
HB 209 Materials - Agency Coordination.pdf HFIN 4/4/2016 1:30:00 PM
HB 209
HB 209 Materials - Current Funding Needs and Available Funds.pdf HFIN 4/4/2016 1:30:00 PM
HB 209
HB 209 Materials - Water Innovations for Healthy Arctic Homes conference.pdf HFIN 4/4/2016 1:30:00 PM
HB 209
HB 209 Sponsor Statement.pdf HFIN 4/4/2016 1:30:00 PM
HB 209
HB 209 Supporting Documents AK constitution.pdf HFIN 4/4/2016 1:30:00 PM
HB 209
HB 209 Supporting Documents Water_Sewer_Systems_Feb2015.pdf HFIN 4/4/2016 1:30:00 PM
HB 209
HB 209 VSW Petrolium Revenue and PFD payouts.pdf HFIN 4/4/2016 1:30:00 PM
HB 209
HB 209 VSW Supporting Documents DEC funding.pdf HFIN 4/4/2016 1:30:00 PM
HB 209
HB 209 CS WORKDRAFT FIN vP 4-4-16.pdf HFIN 4/4/2016 1:30:00 PM
HB 209
HB 254 NEW FN DCCED CBPL 4-1-16.pdf HFIN 4/4/2016 1:30:00 PM
HFIN 4/12/2016 8:30:00 AM
HB 254
HB 254 Resident Hunters of Alaska - Comments on HB 254.pdf HFIN 4/4/2016 1:30:00 PM
HB 254
HB 254 Resident Hunters of Alaska - Comments on HB 254.pdf HFIN 4/4/2016 1:30:00 PM
HB 254
HB 254 SCI Letter.pdf HFIN 4/4/2016 1:30:00 PM
HB 254
HB 254 DCCED Handouts HFIN.pdf HFIN 4/4/2016 1:30:00 PM
HB 254
HB 156 US DOEDC Letters HFIN.pdf HFIN 4/4/2016 1:30:00 PM
HB 156
HB254 Followup HFIN 4-13-16.pdf HFIN 4/4/2016 1:30:00 PM
HB 254