Legislature(1999 - 2000)
03/17/2000 02:18 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
March 17, 2000
2:18 P.M.
TAPE HFC 00 - 72, Side 1
TAPE HFC 00 - 72, Side 2
CALL TO ORDER
Co-Chair Therriault called the House Finance Committee
meeting to order at 2:18 p.m.
PRESENT
Co-Chair Therriault Representative Foster
Vice Chair Bunde Representative Grussendorf
Representative Austerman
Representative J. Davies Representative Phillips
Representative G. Davis Representative Williams
Co-Chair Mulder and Representative Moses were absent from
the meeting.
ALSO PRESENT
Pete Fellman, Staff, Representative Harris; Mike Tibbles,
Staff, Representative Therriault; Dan Easton, Director,
Division of Facility Construction and Operation, Department
of Environmental Conservation; Andy Warwick, Chairman, Board
of Directors, Utilities Securities of Alaska; Carol Carroll,
Director, Division of Support Services, Department of
Natural Resources; Karen McCarthy, Staff, Representative
Bunde.
TESTIFIED VIA TELECONFERENCE
Lt. David Hudson, Alaska State Troopers, Department of
Public Safety; Debbie Ossiander, Anchorage School Board,
Anchorage; Marcia Ward, Ward Farms, Delta Junction; Chester
Johnson, Governmental Financial Associations, New York;
Dianna Bennett, Finance Director, Anchorage Water and
Wastewater Utility, Anchorage; Tom Boedecker, City Manager,
Soldotna; George Gordon, Fairbanks.
SUMMARY
HB 204 "An Act relating to elk farming."
CSHB 204 (RES) was REPORTED out of Committee with
a "do pass" recommendation and with three fiscal
notes: a fiscal impact note from the Department of
Natural Resources; a fiscal impact note from the
Department of Fish and Game, dated 3/8/00; and a
zero fiscal note from the Department of
Environmental Conservation, dated 3/8/00.
HB 277 "An Act relating to payment of retirement benefits
for subsequently reemployed retired members of the
teachers' retirement system."
HB 277 was appointed to a subcommittee consisting
of Representative Bunde as chair and
Representatives Davies and Davis.
HB 304 "An Act relating to issuance and sale of revenue
bonds to fund drinking water projects, to creation
of an Alaska clean water administrative fund and
an Alaska drinking water administrative fund, to
fees to be charged in connection with loans made
from the Alaska clean water fund and the Alaska
drinking water fund, and to clarification of the
character and permissible uses of the Alaska
drinking water fund; amending Rule 3, Alaska Rules
of Civil Procedure; and providing for an effective
date."
CSHB 304 (FIN) was REPORTED out of Committee with
a "do pass" recommendation and with a fiscal
impact note by the Department of Environmental
Conservation, dated 1/21/00; and zero fiscal note
by the Department of Revenue, dated 1/21/00.
HB 318 "An Act relating to property disposal by law
enforcement agencies."
CSHB 318 (JUD) was REPORTED out of Committee with
a "do pass" recommendation and with a zero fiscal
note by the Department of Public Safety dated
3/1/00.
HOUSE BILL NO. 277
"An Act relating to payment of retirement benefits for
subsequently reemployed retired members of the
teachers' retirement system."
Co-Chair Therriault appointed HB 277 to a subcommittee:
Representative Bunde, chair and Representatives Davies and
Davis. He noted concerns regarding the actuarial impact of
the legislation. He directed the subcommittee to look at the
way that other states have addressed the issue.
DEBBIE OSSIANDER, ANCHORAGE SCHOOL BOARD, ANCHORAGE
testified via teleconference in support of HB 277. She
observed that school districts are having difficulty
recruiting teachers in specific critical need areas.
HB 277 was HELD in subcommittee.
HOUSE BILL NO. 204
"An Act relating to elk farming."
PETE FELLMAN, STAFF, REPRESENTATIVE HARRIS spoke in support
of HB 214. He explained that HB 204 is an effort to address
the needs of domesticated elk farmers in the state. The
Department of Fish and Game currently has the statutory
authority to regulate domesticated and wild elk stock. The
legislation would move the regulation of domesticated elk
into the Department of Natural Resources, Division of
Agriculture. The department, industry and the state
veterinarian support the legislation.
Vice Chair Bunde questioned the fiscal cost. Mr. Fellman
observed that farmers pay a $250 dollar annual fee for fence
inspections. The fiscal note covers $1.5 thousand dollars
for additional inspections.
Vice Chair Bunde maintained that the animals will escape and
asked if the Department of Natural Resources considered the
impact of escaped animals on other Alaskan resources.
CAROL CARROLL, DIRECTOR, DIVISION OF SUPPORT SERVICES,
DEPARTMENT OF NATURAL RESOURCES stated that the department
will inspect fences and issue licenses. She did not have
information on the impact of escaped animals. She pointed
out that there are already elk in Alaska.
Mr. Fellman emphasized that the animals are valuable and
estimated that owners would keep track of them. He added
that the animals would be tested for disease prior to their
importation.
Representative Phillips agreed that the farmers would not
risk losing the animals and noted the value of the elk.
Co-Chair Therriault pointed out that the Department of Fish
and Game supports the legislation.
In response to a question by Vice Chair Bunde, Mr. Fellman
observed that the Department of Fish and Game currently
regulates the animals. The intent is to transfer regulation
to the Department of Natural Resources
MARCIA WARD, WARD FARMS, DELTA JUNCTION testified via
teleconference in support of HB 204. She gave a brief
history of elk farming in Alaska. Ward Farms was begun on
the Kenai Peninsula in 1990. The legislation places domestic
elk farming in the Division of Agriculture, with other
domestic farm stock. She assured the Committee that fences
are adequate; the fences are eight feet high and made sturdy
enough to withstand: buffalo, elk, or deer. She added that
elk are territorial and maintained that an elk that escape
would attempt to return. Elk cost from $4,500 to $10,000
dollars each and are more valuable than beef cattle or
bison. Elks are tagged for identification. She pointed out
that elk have passed health inspections and stressed that
elk farmers are concerned that disease from wild Caribou
stock could infect their elk. Elk farmers pay a $250 dollar
fee every two years. She observed that they are the only
livestock industry that pays a licensing fee.
Representative Phillips spoke in support of the legislation.
She emphasized that the elk industry is successful and is
good for Alaska.
Representative Austerman asked if there had been problems
with bears. Ms. Ward noted that the elk are aggressive and
have repelled bears. She stressed that the fence can
withstand a tree falling on it and that there have been no
problems with predators.
Representative Austerman asked if wild Southeast elk could
be certified for domestication. Ms. Ward responded that she
did not think that the Department of Fish and Game would
allow wild elk to be domesticated. She stated that
veterinarians in the state could test them. She emphasized
that elk farms would quarantine wild elk before exposing
their domesticated herds.
In response to a question by Representative J. Davies, Ms.
Ward emphasized that it is easier to have all of the
regulations under one department. Branding and health
services are under the Department of Natural Resources,
while licensing and inspections were under the Department of
Fish and Game.
Ms. Ward noted that there are nine elk farmers in the state
and that the industry is growing.
Representative Foster MOVED to report CSHB 204 (RES) out of
Committee with the accompanying fiscal note. There being NO
OBJECTION, it was so ordered.
CSHB 204 (RES) was REPORTED out of Committee with a "do
pass" recommendation and with three fiscal notes: a fiscal
impact note from the Department of Natural Resources; a
fiscal impact note from the Department of Fish and Game,
dated 3/8/00; and a zero fiscal note from the Department of
Environmental Conservation, dated 3/8/00.
HOUSE BILL NO. 318
"An Act relating to property disposal by law
enforcement agencies."
Vice Chair Bunde spoke in support of the legislation. The
legislation would allow a finder of lost property who
responsibly delivers the property to the state to acquire
title if the true owner were not located. He noted that the
legislation was introduced as the result of an instance
where a handgun was found. Vice Chair Bunde observed that
the state does not have statutes to address found property.
The intent is to encourage individuals to turn in found
property.
The legislation excludes:
Property found within municipalities or boroughs;
Prehistoric, archaeological, historical, Native or
similar property;
Property that is not legal to be possessed or people
who may not posses certain property (sawed off
shotguns);
Companies, institutions, banks, state employees who
find property in the course of their job; or
Intangible property (stocks and bond).
Representative Phillips questioned why cash was not covered.
Vice Chair Bunde explained that cash is already covered
under AS 34.35.
KAREN MCCARTHY, STAFF, REPRESENTATIVE BUNDE provided
information on HB 318. She clarified that AS 34.35 refers to
safety deposit boxes, bonds, or securities. She observed
there are already provisions for cash found on state land.
Alaska Statute 34 only covers things that are already in
banks or other financial institutions.
In response to a question by Representative Phillips, Ms.
McCarthy observed that other states have similar laws. The
legislation is based on common law. Common law states that
the finder has greater right to the property than any one
else in the world except the true owner.
Vice Chair Bunde pointed out that municipalities have their
own regulations. The legislation covers items found on state
property.
Representative J. Davies questioned if state troopers have
an obligation to advertise found property. Vice Chair Bunde
responded that the troopers are not obligated to seek owners
of lost property or the finder. The Department of Public
Safety is concerned with alleviating the need for storage
space.
LT. DAVID HUDSON, ALASKA STATE TROOPERS, DEPARTMENT OF
PUBLIC SAFETY stated that the legislation would benefit the
Department of Public Safety by the change in section 1,
which would allow disposal of property after one instead of
two years.
Representative J. Davies questioned if the department came
into possession of a bicycle or snow machine if it would be
check against items reported lost or stolen.
Mr. Hudson observed that a computer check would be done to
see if it had been reported. Found property would also be
logged into the department's computerized system. The
property would be disposed of after a year if it is not
claimed. A cross-reference would be done before the
disposition to see if the finder was interested in acquiring
the property. Finders are not required to give their name or
contact address.
Representative Foster provided members with a newspaper
article from 1900 (copy on file). It recounts a story of a
person in Nome who found a $20 dollar bill and was advised
by the Sheriff to keep the money.
Vice Chair Bunde MOVED to report CSHB 318 (JUD) out of
Committee with the accompanying fiscal note. There being NO
OBJECTION, it was so ordered.
CSHB 318 (JUD) was REPORTED out of Committee with a "do
pass" recommendation and with a zero fiscal note by the
Department of Public Safety dated 3/1/00.
HOUSE BILL NO. 304
"An Act relating to issuance and sale of revenue bonds
to fund drinking water projects, to creation of an
Alaska clean water administrative fund and an Alaska
drinking water administrative fund, to fees to be
charged in connection with loans made from the Alaska
clean water fund and the Alaska drinking water fund,
and to clarification of the character and permissible
uses of the Alaska drinking water fund; amending Rule
3, Alaska Rules of Civil Procedure; and providing for
an effective date."
Co-Chair Therriault provided members with a proposed
committee substitute 1-GH2031\G, Cook 3/17/00 (copy on
file).
MIKE TIBBLES, STAFF, REPRESENTATIVE THERRIAULT provided
information on the proposed committee substitute. The title
was amended to include "to the Alaska Clean Water Fund".
This reflects changes in the legislation.
References to AS 46.03.032 and AS 46.03.036 were added on
page 1, lines 11 and 12: AS 46.03.032 refers to the Clean
Water Fund, which is waste water and AS 46.03.06 refers to
Alaska Drinking Water Fund (Safe Water).
A technical change was made on page 2, line 18: "for each
program" was deleted. This was no longer needed because both
programs are added under subsection (a).
Mr. Tibbles noted that "as appropriate" replaces
"respectively" in a number of places in the bill.
Section 18 is a new section; it amends the definition of
"other qualified entity". This addresses the Clean Water
Fund and brings in private entities approved under federal
statute 33. U.S.C. 1383. There are no private entities
currently approved under this section. The Drinking Water
Fund was amended in 1996, to allow loans to private
entities. The legislation makes both programs consistent.
In response to a question by Representative Grussendorf, Mr.
Tibbles explained that the intent is to cover privately
owned economically regulated utilities. There are 600
privately owned utilities. Only 24 of them are economically
regulated. The intent is to only cover the economically
regulated privately owned utilities. Page 9, subsection 1(b)
refers to the Alaska Drinking Water Fund and includes
economically regulated organizations that are not exempt
from regulation under AS 42.05.711(d).
Language was added on page 10, line 3 - 6 to allow the
Department of Environmental Conservation to establish
different loan terms, charges and rates. This addresses
concerns that higher risk entities would have a greater
impact.
(TAPE CHANGE, HFC 00 - 72, SIDE 2)
Mr. Tibbles noted that language was also added on page 10,
lines 17 and 18: "a loan may not be made to an organization
that is not a municipality to refinance debt of that
organization"
There is also is a delayed effective date.
Co-Chair Therriault noted that the ability to charge
different rates was requested by the Commissioner of the
Department of Natural Resources.
DAN EASTON, DIRECTOR, DIVISION OF FACILITY CONSTRUCTION AND
OPERATION, DEPARTMENT OF ENVIRONMENTAL CONSERVATION provided
information on HB 304. He noted that the original intent of
HB 304 was to give the department the same bonding authority
for drinking water as the they currently have for waste
water projects. There are two loan programs: the Clean Water
Fund for wastewater projects and the Drinking Water Fund for
drinking water projects. The department has bonding
authority for the Clean Water Fund. The department did not
have bonding authority for the Drinking Water Fund. Bonding
authority allows the department to use bonding revenues to
add more money to the Fund and make more money available for
loans. Bonding mechanisms can be used to pay for the state
match requirement.
Mr. Easton explained that the legislation was also intended
to provide a long-term mechanism to pay for the program's
operational expenses. The program's operational expenses
have been paid with federal funding that will cease. When
federal grants cease an alternative mechanism will be
needed. House Bill 304 allows the department to divert
money, paid back by communities, into another account that
could be used for operating costs through the capital and
operating budgets.
The proposed committee substitute makes privately owned
utilities eligible for loans for the Drinking Water Program.
Federal law currently prohibits loans for sewage and
wastewater projects to privately owned utilities. He
emphasized that the proposed committee substitute would
improve drinking water through financial improvements.
Mr. Easton referred to the department's request for
authorization to charge different rates on loans. He
observed that if loans to private utilities cost more to
make and are higher risk than the department can apportion
interest rates so that higher risk and entities with higher
costs pay more. Municipalities that are lower risk and cost
less would not have to pay the burden of the privately owned
utilities. He spoke in support of the delayed effective
date.
Co-Chair Therriault pointed out that only privately owned
utilities are economically regulated. He quoted from a
letter by the Regulatory Commission of Alaska:
Generally, all economically regulated expenses are
reviewed according to these criteria. Accordingly, any
reduction in debt-service expense associated with
allowed costs would generally be of benefit to the
ratepayers of the utility. The ratepayers would benefit
through rates lower than would otherwise be required to
allow the utility to recover its debt-service expense.
Co-Chair Therriault pointed out that the legislation allows
privately owned companies to lower their customer rates. The
benefit flows to the ratepayer.
Representative J. Davies suggested that a reasonable portion
could benefit the operators. He questioned if the
legislation would cover private drinking water and sewage
projects.
Discussion ensued regarding the legislation's coverage of
drinking water and wastewater projects.
ANDY WARWICK, CHAIRMAN, BOARD OF DIRECTORS, UTILITIES
SECURITIES OF ALASKA spoke in support of the legislation. He
observed that the program replaces general fund monies with
loan dollars and allows the program to expand. The proposed
committee substitute makes the program available to public
utilities regardless of whether they are municipal or
investor owned, as long as the investor owned utilities are
economically regulated. All benefits of the program would be
passed on to the customers. Customers would be on a level
playing field. He maintained that the legislation would
improve the quality of life for all Alaskans.
In response to a question by Representative J. Davies, Mr.
Warwick stated that it is his understanding that federal law
allows privately owned utilities to participate in drinking
water but not the wastewater programs. The legislation, as
it stands, follows the federal law; it does not allow
participation in the wastewater portion. If private
utilities become eligible under federal law than money from
the federal government would allow participation. He
observed that the intent is to participate in whatever is
allowed under federal law. Money is coming from the federal
government with the intent to benefit all utilities.
Representative J. Davies expressed concern that the federal
law could be written in a general way to permit a wide range
of privately owned utilities to participate. He wanted state
statutes to reflect the need that private utilities be
economically regulated (to be eligible for the loan
programs.) Mr. Warwick thought that the legislation
addressed Representative J. Davies' concerns.
Co-Chair Therriault observed that the legislation
specifically addresses drinking water. He noted that an
amendment would be needed to specifically add wastewater.
Mr. Easton concluded that the restriction that private
utilities must be economically regulated only applies to the
drinking water loan program and agreed that an amendment
would be needed to address wastewater.
Representative J. Davies MOVED to ADOPT a conceptional
amendment: add a condition that when sewage programs become
available under federal statutes, that they be allowed, but
that a further requirement be added that they would be
regulated by the RCA and economically regulated in the
manner parallel to the water funds. There being NO
OBJECTION, it was so ordered.
Representative Foster MOVED to ADOPT the proposed committee
substitute work draft, 1-GH2031\G, Cook 3/17/00. There being
NO OBJECTION, it was so ordered.
Representative Foster MOVED to report CSHB 304 (FIN) out of
Committee with the accompanying fiscal note. There being NO
OBJECTION, it was so ordered.
CSHB 304 (FIN) was REPORTED out of Committee with a "do
pass" recommendation and with a fiscal impact note by the
Department of Environmental Conservation, dated 1/21/00; and
zero fiscal note by the Department of Revenue, dated
1/21/00.
Adjournment
The meeting adjourned at 2:55 p.m.
House Finance Committee 3 3/17/00
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