Legislature(2007 - 2008)HOUSE FINANCE 519
04/06/2008 04:00 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB254 | |
| HB314 | |
| HB106 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 106 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 422 | TELECONFERENCED | |
| += | HB 314 | TELECONFERENCED | |
| += | SB 254 | TELECONFERENCED | |
HOUSE FINANCE COMMITTEE
April 6, 2008
4:41 p.m.
CALL TO ORDER
Co-Chair Chenault called the House Finance Committee meeting
to order at 4:41:59 PM.
MEMBERS PRESENT
Representative Mike Chenault, Co-Chair
Representative Kevin Meyer, Co-Chair
Representative Bill Stoltze, Vice-Chair
Representative Harry Crawford
Representative Richard Foster
Representative Les Gara
Representative Mike Hawker
Representative Reggie Joule
Representative Mike Kelly
Representative Mary Nelson
Representative Bill Thomas, Jr.
MEMBERS ABSENT
None
ALSO PRESENT
Frank Homan, Commissioner, Commercial Fisheries Entry
Commission; Pete Ecklund, Staff, Representative Kevin
Meyer; Frank Richards, Deputy Commissioner of Highways &
Public Facilities, Department of Transportation and Public
Facilities; Representative Bryce Edgmon; Adam Berg, Staff,
Representative Bryce Edgmon; Representative Kyle Johansen;
Jerry Burnett, Director, Division of Administrative
Services, Department of Revenue; Nancy Slagle, Director,
Division of Administrative Services, Department of
Transportation and Public Facilities
PRESENT VIA TELECONFERENCE
Johanna Bales, Deputy Director, Tax Division, Department of
Revenue
SUMMARY
SB 254 "An Act extending the termination date of the
Alaska regional economic assistance program; and
providing for an effective date."
HCS SB 254(FIN) was REPORTED out of Committee with
a "do pass" recommendation, a title change
resolution, a new zero fiscal note by the
Department of Fish and Game, and with two
previously published fiscal notes by the
Department of Commerce, Community and Economic
Development.
HB 314 "An Act providing for and relating to the issuance
of general obligation bonds for the purpose of
paying the cost of state transportation projects;
and providing for an effective date."
CSHB 314(FIN) was REPORTED out of Committee with a
"do pass" recommendation and with fiscal note #1
by the Office of the Governor and a new fiscal
note by the Department of Revenue.
HB 106 "An Act repealing fees imposed on the sale of new
tires, the sale of certain studded tires, and the
installation of certain metal studs on tires; and
providing for an effective date."
CSHB 10 106(FIN) was REPORTED out of Committee
with a "do pass" recommendation and with
previously published fiscal note #2 by the
Department of Revenue.
4:42:27 PM
SENATE BILL NO. 254
"An Act extending the termination date of the Alaska
regional economic assistance program; and providing for
an effective date."
Vice-Chair Stoltze MOVED to ADOPT HCS SB 254(FIN), labeled
25-LS1367\E, as the work draft before the Committee. There
being NO OBJECTION, it was so ordered.
Representative Nelson informed the Committee that there was
a change in the bill to include hair crab fisheries.
FRANK HOMAN, COMMISSIONER, COMMERCIAL FISHERIES ENTRY
COMMISSION, offered to provide additional information about
the bill.
Representative Nelson reported that the addition to the bill
would extend the life of the hair crab fisheries along the
west coast of Alaska. Mr. Homan said that was correct. In
addition, it extends the scallop fisheries. The two
fisheries are unique in that they are vessel based license
systems.
Representative Nelson said her understanding is that those
two fisheries alone have 4 out of 18 permit holders that are
owned by Community Development Quota (CDQ) groups. Mr.
Homen thought that was correct.
Representative Nelson asked how many permit holders from
Alaska are in the limited entry system. Mr. Homen responded
that there are about 15,000 limited entry permits and 78
percent are from Alaska. Representative Nelson asked if
there were about 10,000. Mr. Homan thought it was more like
11,000.
Representative Nelson estimated that from the two CDQ's that
are owners in the hair crab and scallops fisheries, the
Coastal Village Region Fund has about 20 villages and about
9,000 people, and Norton Sound has fewer villages but about
8,500 people. Just in those 4 permit holders, the owners of
the permits total about 17,000 residents of Alaska. She
stated that the CDQ's are not Native programs. She saw the
CDQ's with their community shareholders as positive for
communities.
4:47:21 PM
Representative Thomas asked how corporations can hold
permits when it is prohibited throughout the whole limited
entry permit system. Mr. Homan clarified that the vessel-
based program is unique. In 2002, the legislature passed a
bill allowing the two fisheries to have different systems.
The limited entry system was designed around the salmon
fisheries with an individual owner. Vessel-based limited
entry fisheries are managed differently. They are large
boats with multiple crews and skippers. The traditional
method could not be used. Sometimes the vessels are owned
by corporations made up by two or three individuals, due to
the expense of getting into these two fisheries. They
require a different financial structure. There is no
intention of moving the vessel-based system to any other
fishery.
Representative Thomas thought the doors would be opened when
the rules change. He voiced concern about the process. He
related that he fought the limited entry program so that no
corporation would ever own the permits. Mr. Homan related
that the legislature in 2002 made that allowance and it
would require legislation to change it. Representative
Thomas reiterated his concerns. He suggested consolidating
or releasing more permits. He said the usual route is
through the Board of Fish.
Mr. Homan recalled that in 2002 the legislature did
recognize consolidation. No vessel owner could own more
than two permits.
4:53:21 PM
Vice-Chair Stoltze pointed out that the bill would extend
the termination date of the Alaska Regional Economic
Assistance Program.
Representative Nelson said in addition to extending the
termination date, there are 18 hair crab permits and 19
scallop permits. In the 18 crab permits, there are 250
quota holders. She inquired if the fishery were abolished,
if all of those quota holders would be able to come in and
fish that resource. Mr. Homan confirmed that to be true for
both fisheries; both would return to open access.
Representative Nelson said that is of great concern because
of the potential loss of revenue to Alaskan permit holders.
Representative Nelson commented that the fishery is also
needed to prevent over fishing. Mr. Homan added that the
resource is fragile and the fishery very small. If it is
opened to unlimited harvest, restrictions will need to be
applied.
Representative Nelson asked if the other 14 permit holders
are from across the state, in addition to the 4 CDQ's. Mr.
Homan replied that it is a mixture of Alaskans and non-
residents. Representative Nelson thought there were permit
holders from Southeast Alaska as well as from the Interior
and South Central Alaska. Mr. Homan said that was correct.
4:57:05 PM
Representative Gara asked for an explanation of the hair
crab and scallop fisheries. Mr. Homan explained the history
of the two fisheries. The Department of Fish and Game put
restrictions on the fisheries, requiring a vessel license,
in 2002.
Representative Gara asked how long the extension is for.
Mr. Homan said 5 years. Representative Gara asked if, when
it lapses, it becomes a permit fishery again. Mr. Homan
explained that the sunset allows revisiting the issue.
Representative Gara asked if the bill would limit additional
vessels. Mr. Homan said that is correct. He recalled
testimony by Fish and Game that regulation of the fisheries
would be increased if the bill does not pass.
5:01:11 PM
Representative Thomas recalled during the time of statehood
and the intent to abolish fish traps owned by non-Alaskan
corporations back then. Limited entry was developed very
carefully to ensure that corporations were not able to own
permits.
Representative Nelson thought that if there was open and
unlimited access to the fisheries, it would be more
expensive to manage them. She reported that there was also
a possibility that they would be managed by the federal
government. One of the purposes of statehood was to ensure
state management of fish and game resources. Alaska has
already lost management of resources on federal land.
Losing limited entry will make Alaska vulnerable to more
federal management.
Mr. Homan related that the federal government also limits
these fisheries in the federal fishery zone; however, the
state manages both fisheries in all waters. If it goes back
to open access there would be two management systems.
Representative Nelson noted support for the bill from the
Department of Fish and Game and from United Fishermen of
Alaska. North Pacific Management Council and the Commercial
Fisheries Entry Commission (CFEC) also support this
legislation. Mr. Homan concurred that all prominent
fisheries support the bill.
Representative Kelly asked if the sunset date was expected
to be extended. Mr. Homan said it was, and he related the
history of another bill that was supposed to extend the
termination date, but failed. Representative Kelly asked if
everyone in the area supports the bill. Mr. Homan reported
that it is generally supported. A few oppose it because
they think it is going to do something else. They are
uneasy with consolidation. Representative Kelly asked what
would happen to protect the resource if it was not extended.
Mr. Homan replied that Department of Fish and Game said they
would initiate more restrictive policies toward the two
fisheries. He said the Commission would not be able to
extend any limitation if the bill does not pass.
5:09:05 PM
Vice-Chair Stoltze wondered if a five-year sunset was long
enough or if a sunset was even needed. Representative
Nelson thought a sunset was not needed. She noted that it
has been proven that the resources are rebounding and the
fisheries are bringing dollars to Alaska's coffers. She
worried that a new chairman of fisheries might change the
termination date of the sunset in the future.
Mr. Homan related that the original intention of the bill
was to not have a sunset date.
Representative Gara thought the conservation aspect was
working.
Representative Thomas said he does not like the bill but
also did not think it needed a sunset.
Vice-Chair Stoltze noted the title restrictions. He
suggested a 10-year extension.
5:14:05 PM
Representative Kelly said he was uncomfortable with changing
the sunset date, but liked the bill.
Representative Gara thought there was not a good option
surrounding the sunset issue. He did not think that getting
rid of the sunset was any worse a solution.
Vice-Chair Stoltze said eliminating the sunset is not an
option in this bill. Representative Kelly thought he could
agree to the 10-year option.
5:16:40 PM
Vice-Chair Stoltze MOVED to ADOPT Conceptual Amendment 1 to
extend the vessel permit portion of the bill to 2018.
Representative Hawker OBJECTED. He clarified that the
amendment would apply to Section 2 of the bill.
Representative Gara requested that Representative Nelson be
added as a sponsor of the bill. Representative Nelson was
added as a sponsor.
Representative Hawker WITHDREW his OBJECTION to Conceptual
Amendment 1. There being NO OBJECTION, it was so ordered.
Co-Chair Chenault reviewed the fiscal notes. He noted a
need for a new fiscal note from the Department of Fish and
Game.
Mr. Homan said a new zero fiscal note from the Commercial
Fisheries Entry Commission would be forthcoming.
5:20:19 PM
Representative Foster MOVED to REPORT HCS SB 254(FIN), as
amended, out of Committee with individual recommendations, a
title change resolution, and the accompanying fiscal notes.
There being NO OBJECTION, it was so ordered.
HCS SB 254(FIN) was REPORTED out of Committee with a "do
pass" recommendation, a title change resolution, a new zero
fiscal note by the Department of Fish and Game, and with two
previously published fiscal notes by the Department of
Commerce, Community and Economic Development.
AT-EASE: 5:21:41 PM
RECONVENED: 5:37:28 PM
HOUSE BILL NO. 314
"An Act providing for and relating to the issuance of
general obligation bonds for the purpose of paying the
cost of state transportation projects; and providing
for an effective date."
Representative Thomas MOVED to ADOPT CSHB 314(FIN), labeled
25-GH2041\M, Cook, 4/5/08, as the work draft before the
Committee. There being NO OBJECTION, it was so ordered.
PETE ECKLUND, STAFF, REPRESENTATIVE KEVIN MEYER, discussed
the changes in the bill. He referred to a handout entitled
"Project Title", which describes the changes (copy on file.)
The new total for the G.O Bonds bill is $220,600,000. Mr.
Ecklund listed those projects added to the bill.
5:40:44 PM
Mr. Ecklund listed the three items removed from the bill.
Co-Chair Meyer asked if the Gravina Access was removed in
the Transportation Committee meeting. Mr. Ecklund replied
that was correct. Co-Chair Meyer asked if the South Denali
Access Road project was removed by the Senate. Mr. Ecklund
said it was in the Senate version of the capital budget.
Co-Chair Meyer reported that it was agreed that the Northern
Access Study should not be included in a bond package.
Representative Gara asked if the Gravina Access project was
included somewhere else. Co-Chair Meyer said it was totally
removed.
Representative Crawford asked about the grant to Anchorage
th
for the Victor Road-Dimond Boulevard to 100 Avenue -
upgrade and trade. Co-Chair Meyer explained that there are
about 7 or 8 state roads in Anchorage that are neighborhood
roads now. The City of Anchorage has agreed to take over
these roads. Representative Crawford asked what the
tradeoff was. Co-Chair Meyer said the state would spend $14
million to upgrade the roads and the city would maintain
them.
5:44:29 PM
Vice-Chair Stoltze added that in 1990 two roads in his area
had a similar arrangement.
Representative Thomas noted $10 million for the Port of
Anchorage, which had been twice vetoed. Co-Chair Meyer
explained that the Governor felt that the project should be
in a road bond.
Representative Gara wondered what would happen to the Port
of Anchorage if it was not funded with $10 million in G.O.
Bonds. Co-Chair Meyer thought municipal money should not go
to this project because it is a state project. He requested
testimony from the Department of Transportation and Public
Facilities.
5:47:27 PM
FRANK RICHARDS, DEPUTY COMMISSIONER OF HIGHWAYS & PUBLIC
FACILITIES, DEPARTMENT OF TRANSPORTATION AND PUBLIC
FACILITIES, reported that in conversations with Governor
Sheffield, it was noted that there were needs for state
funds in order to continue with necessary expansions. The
state is involved because the vast majority of cargo comes
into this port.
Representative Gara said he was just questioning the need
for state money; he was not criticizing the project.
5:51:12 PM
Co-Chair Meyer MOVED to ADOPT Amendment 1:
Page 2, Line 31
Delete: Access Road to Evacuation Center and
Insert: Access Road, Evacuation Center and
Page 3, Line 7
Delete: Shelter Cove Road
Insert: Shelter Cove, Road Construction
Page 4, Line 21
Delete: $220,000,000
Insert: $220,600,000
Vice-Chair Stoltze OBJECTED.
Mr. Ecklund explained the technical changes in the
amendment.
Representative Hawker MOVED to ADOPT Conceptual Amendment 1
to Amendment 1, to make the same change on line 24, as on
line 21. There being NO OBJECTION, it was so ordered.
Vice-Chair Stoltze WITHDREW his OBJECTION to adopt Amendment
1. There being NO OBJECTION, Amendment 1 was adopted, as
amended.
5:53:19 PM
Representative Joule MOVED to ADOPT Amendment 2:
Page 1, line 9:
Delete "$220,600,000" and insert "234,600,000"
Page 2, line 10:
Delete "$196,600,000" and insert "210,600,000"
Page 2, line 14, insert:
"Aleknagik Wood River Bridge $14,000,000"
Page 4, line 21:
Delete "$220,000,000" and replace with "$234,000,000"
Page 4, line 24:
Delete "$220,000,000" and replace with "$234,000,000"
Vice-Chair Stoltze OBJECTED.
REPRESENTATIVE BRYCE EDGMON, explained that Amendment 2 is
also a technical amendment. It proposes to fully fund a
bridge that would connect the north and south shores of
Aleknagik.
Co-Chair Meyer asked if $14 million is the total cost.
Representative Edmonds clarified that the total cost is $22
million.
Co-Chair Chenault asked if this project is near Dillingham
or Naknek. Mr. Edgmon explained that it was 30 miles away
from Dillingham.
5:55:49 PM
ADAM BERG, STAFF, REPRESENTATIVE BRYCE EDGMON, explained
that the bridge has $2.2 million in funding already secured.
The requested amount would complete the project. Co-Chair
Meyer and Vice-Chair Stoltze recalled visiting the site.
5:56:59 PM
Representative Crawford asked for information about the
bridge. Representative Edgmon said it was a vehicle bridge.
He explained why it was needed to transport children to
school.
Vice-Chair Stoltze asked if a mineral development
controversy was involved. Mr. Edgmon replied that it was
not.
Representative Nelson recalled that the request has been
around for a number of years. She spoke in support of the
bill for various reasons.
Representative Gara agreed that the bridge has been needed
for years. Representative Edgmon related further reasons
for the need for a bridge.
6:00:48 PM
Co-Chair Meyer noted the attempt to seek a balance in the
G.O. Bond package. He asked the Committee not to accept the
amendment. Representative Edgmon deferred to the will of
the Committee.
Representative Joule WITHDREW Amendment 2.
Representative Joule MOVED to ADOPT Amendment 3:
Page 1, line 9:
Delete "$220,600,000" and replace with "$223,100,000"
Page 2, line 10:
Delete $196,600,000" and replace with "$199,100,000"
Page 2, line 18, add:
"Port of Bristol Bay Dock Expansion/Repair $2,500,000"
Page 4, line 21:
Delete "$220,000,000" and replace with "$222,500,000"
Page 4, line 24:
Delete "$220,000,000" and replace with "$222,500,000"
Vice-Chair Stoltze OBJECTED.
Representative Edgmon explained the amendment is for money
that would be used to help fully fund the expansion of the
Bristol Bay dock.
Co-Chair Meyer said there was money in the capital budget
for this project. Mr. Ecklund agreed. Co-Chair Meyer
preferred to not have this item in the bond package.
Representative Joule WITHDREW Amendment 3.
6:05:28 PM
Representative Thomas asked if the Dalton Highway project is
in the capital budget. Co-Chair Meyer thought that it was
not in the capital budget and that the Governor had
requested it be in a road bond package.
Mr. Richards said there was $4 million in the capital budget
for the Dalton Highway. Co-Chair Meyer summarized that
there was $4 in the Senate capital budget and a request for
$14 million in the G.O. bond bill. Mr. Richards concurred.
Mr. Richards corrected that it was a $5 million project and
was removed from the Senate version of the budget.
Vice-Chair Stoltze asked about the language "bikeway" on
page 2, line 30. Co-Chair Meyer asked if it could be
changed. Mr. Richards said the intent is that improvements
outside of the paved roadway be included. Representative
Hawker offered "multi-modal pedestrian facilities".
Representative Gara thought that bikeway was appropriate as
a tourist attraction.
6:10:50 PM
Representative Gara asked about the Ketchikan project for
$10 million: Harriet Hunt Lake to Shelter Cove Road.
REPRESENTATIVE KYLE JOHANSEN, explained that the road is
part of the Ketchikan Coastal Management Plan. It has been
approved by the Forest Legacy Program, the Department of
Natural Resources, the Ketchikan City Council, Tongass Land
Management Plan, and the Department of Transportation and
Public Facilities. It is part of the Ketchikan Borough's
20-20 plan and has a multi-use purpose. It Connects Cape
Fox with 10 miles of road that will tie into 100 miles of
logging roads.
Co-Chair Meyer asked if it is a state road. Representative
Johansen reported that it is a borough road and accesses
Mental Health Trust lands.
AT-EASE: 6:15:38 PM
RECONVENED: 6:27:58 PM
Representative Hawker noted that the project was on the
Roads to Resources Initiative.
Co-Chair Meyer asked about the Department of Revenue fiscal
note.
JERRY BURNETT, DIRECTOR, DIVISION OF ADMINISTRATIVE
SERVICES, DEPARTMENT OF REVENUE, said the department would
provide the Committee with a debt service fiscal note with
annual payments of about $17, 254, 046.30.
Representative Foster MOVED to REPORT CSHB 314(FIN) out of
Committee, as amended, with individual recommendations and
the accompanying fiscal notes. There being NO OBJECTION, it
was so ordered.
CSHB 314(FIN) was REPORTED out of Committee with a "do pass"
recommendation and with fiscal note #1 by the Office of the
Governor and a new fiscal note by the Department of Revenue.
6:32:38 PM
HOUSE BILL NO. 106
"An Act repealing fees imposed on the sale of new
tires, the sale of certain studded tires, and the
installation of certain metal studs on tires; and
providing for an effective date."
JOHANNA BALES, DEPUTY DIRECTOR, TAX DIVISION, DEPARTMENT OF
REVENUE, explained the bill repeals the fees imposed on the
sale of new and studded tires. She said it is a deterrent
to those who would not replace old, worn tires. The
Administration does not believe that the tire fee is an
efficient way to raise money and acts as a deterrent to
those who should replace old or worn tires.
Ms. Bales pointed out that the fiscal note should address
the repeal this year instead of last year. Co-Chair Meyer
said that change would be made by amendment.
Vice-Chair Stoltze commented on needing to replace money in
the budget for the Glenn Highway.
6:36:01 PM
Co-Chair Chenault asked what the annual income has been for
this legislation since 2003. Ms. Bales reported that
approximately $1.5 million has been collected each year.
Co-Chair Chenault related that in FY 08 the fees were
expected to bring in $3.3 million to $5 million, when
actually it was $1.184 million. He asked why that might
have been. Ms. Bales said it was a combination of over-
estimating the number of tires sold and a change in what
kind of tires were purchased.
Co-Chair Chenault noted in 2003 the fiscal note estimated
that it would cost $53,000 a year to implement the program.
The current fiscal note shows a greater cost.
6:39:56 PM
Co-Chair Meyer MOVED to ADOPT Amendment 1 to change the date
on page 1, line 1, from July 1, 2007, to July 1, 2008.
Co-Chair Chenault OBJECTED.
Co-Chair Chenault asked if the amendment fixes the
department's concern. Ms. Bales said it did.
Co-Chair Chenault WITHDREW his OBJECTION. There being NO
OBJECTION, it was so ordered.
6:41:14 PM
Representative Foster MOVED to REPORT CSHB 106(FIN) out of
Committee with individual recommendations and the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
CSHB 10 106(FIN) was REPORTED out of Committee with a "do
pass" recommendation and with previously published fiscal
note #2 by the Department of Revenue.
Representative Thomas thought that arbitrage should be
halted. No one should be able to borrow state money and
profit from it.
ADJOURNMENT
The meeting was adjourned at 6:42 PM.
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