Legislature(2021 - 2022)ADAMS 519
04/21/2021 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB41 | |
| HB47 | |
| HB127 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 69 | TELECONFERENCED | |
| += | HB 71 | TELECONFERENCED | |
| + | HB 41 | TELECONFERENCED | |
| + | HB 47 | TELECONFERENCED | |
| + | HB 127 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
April 21, 2021
1:36 p.m.
1:36:58 PM
CALL TO ORDER
Co-Chair Foster called the House Finance Committee meeting
to order at 1:36 p.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Kelly Merrick, Co-Chair
Representative Dan Ortiz, Vice-Chair
Representative Ben Carpenter
Representative Bryce Edgmon
Representative DeLena Johnson
Representative Andy Josephson
Representative Bart LeBon
Representative Sara Rasmussen
Representative Steve Thompson
Representative Adam Wool
MEMBERS ABSENT
ALSO PRESENT
Liz Harphold, Staff, Representative Ortiz; Representative
Andi Story, Sponsor; Aimee Bushnell, Staff, Representative
Bart LeBon.
PRESENT VIA TELECONFERENCE
Sam Rabung, Director, Division of Commercial Fisheries,
Department of Fish and Game; Jeremy Woodrow, Executive
Director President, Alaska Seafood Marketing Institute,
Juneau; Heather McCarty, Chair, Mariculture Task Force;
Ginny Eckert, Co-Chair, Steering Committee, Alaska King
Crab Research, Rehabilitation, and Biology; Kyle Scherrer,
Program Budget Analyst, Office of Management and Budget;
Chris Becker, Auditor, Tax Division, Department of Revenue;
Mary Aparezuk, Staff, Representative Andi Story; Xh'unei,
Lance A. Twitchell, Associate Professor, Alaska Native
Languages, University of Alaska Southeast; Sandra Moller,
Director, Division of Community and Regional Affairs,
Department of Commerce, Community and Economic Development;
Deven Mitchell, Executive Director, Alaska Municipal Bond
Bank Authority, Department of Revenue; Myron Dosch, Chief
Financial Officer, University of Alaska, Fairbanks; Luke
Welles, Chairman, Alaska Municipal Bond Bank.
SUMMARY
HB 41 SHELLFISH PROJECTS; HATCHERIES; FEES
HB 41 was HEARD and HELD in committee for further
consideration.
HB 47 COUNCIL FOR ALASKA NATIVE LANGUAGES
HB 47 was HEARD and HELD in committee for further
consideration.
HB 127 MUNI BOND BANK: UA, LOAN AND BOND LIMITS
HB 127 was HEARD and HELD in committee for
further consideration.
Co-Chair Merrick relayed the agenda for the meeting.
HOUSE BILL NO. 41
"An Act relating to management of enhanced stocks of
shellfish; authorizing certain nonprofit organizations
to engage in shellfish enhancement projects; relating
to application fees for salmon hatchery permits and
shellfish enhancement project permits; allowing the
Alaska Seafood Marketing Institute to market aquatic
farm products; and providing for an effective date."
1:37:45 PM
REPRESENTATIVE DAN ORTIZ, SPONSOR, reported that the bill
was familiar because it was heard in the prior year and
voted out of committee. He believed that HB 41 was
important because it served to jump start Alaska's economy
and expand the fishing industry. He read the sponsor
statement:
Enhancement of Alaska's shellfish industry holds the
potential of expanded economic opportunities in
Alaska's coastal communities and increased resilience
of the State's fisheries portfolio.
To tap this potential House Bill 41 allows qualified
non-profits to pursue enhancement and/or restoration
projects involving shellfish species including red and
blue king crab, sea cucumber, abalone, and razor
clams.
The bill creates a regulatory framework with which the
Department of Fish & Game can manage shellfish
enhancement projects and outlines criteria for
issuance of permits. It sets out stringent safety
standards to ensure sustainability and health of
existing natural stocks. The commissioner of ADF&G
must also make a determination of substantial public
benefit before a project can proceed.
In addition, the bill allows the Department of Fish &
Game to set the application fee for a shellfish
enhancement project permit and grants the similar
authority over the application fee for a salmon
enhancement project permit. This bill also amends the
statutes governing the Alaska Seafood Marketing
Institute to allow ASMI to market aquatic farm
products including oysters and kelp.
House Bill 41 plays an important role in the
development of mariculture in Alaska by providing a
method to increase the available harvest of shellfish
for public use in an environmentally safe and
responsible manner.
LIZ HARPHOLD, STAFF, REPRESENTATIVE ORTIZ, relayed that the
bill provided the legal framework for the Department of
Fish and Game (DFG) to permit and regulate shellfish
hatcheries. The bill was mirrored off salmon hatchery
statutes that were established decades ago. She shared that
industry stakeholders brought the idea to the sponsors
attention. She indicated that Julie Decker [Chair, Alaska
Fisheries Development Foundation; Member, Alaska
Mariculture Task Force] had been a big proponent of the
bill but was unable to testify. She detailed that
mariculture included farming (i.e., oysters and kelp) and
was a private industry. Statutes allowing mariculture were
already in existence and the bill did not change that
except to allow the Alaska Seafood Marketing Institute
(ASMI) to market aquatic farm products. The bill primarily
pertained to the enhancement and restoration of shellfish
stocks. She noted that certain shellfish stocks were
depleted in some areas of the state like king crab in
Western Alaska. A few groups were researching how to
restore and enhance depleted stocks. The bill provided the
framework to regulate and permit the groups.
1:43:56 PM
Ms. Harphold read the sectional analysis:
Sec. 1: Provides the Alaska Board of Fisheries
authority to direct the department to manage
production of enhanced shellfish stocks, beyond brood
stock needs, for cost recovery harvest.
Sec. 2: Grants the Department of Fish and Game the
authority to set the fee for new private nonprofit
salmon hatcheries based on regulatory costs.
Sec. 3: Conforming language consistent with other fee
structures set and adjusted by regulation, requiring
fees to approximately reflect the cost of
administering the application process, and to be
reviewed and adjusted periodically.
Sec. 4: Adds a new Chapter 12 to Title 16, "Shellfish
Stock Enhancement Projects."
AS 16.12.010: Provides direction to the
commissioner of the Department of Fish and Game
on issuance of permits for private nonprofit
shellfish fishery enhancement projects and grants
the department the authority to set the permit
application fee. States the permit fee will be
accounted for separately as non-general fund
program receipts. This section directs the
commissioner to consult with technical experts in
the relevant areas before permit issuance;
AS 16.12.020: Provides for a hearing and public
notification and input process prior to issuance
of a permit;
AS 16.12.030 Describes terms and conditions for
permit holders to conduct their work, including
cost recovery fisheries, harvest, sale, and
release of enhancement project produced
shellfish, and selection of brood stock sources;
AS 16.12.040: Describes the revocation process
should a permit holder fail to comply with the
terms and conditions of the permit;
AS 16.12.050: Specifies that shellfish produced
under an approved enhancement project are a
common property resource, with provision for
special harvest areas by permit holders. This
section also specifies the Board of Fisheries to
establish regulations relating to this chapter;
AS 16.12.060: Directs the department to advise
and assist permit holders in their planning,
operations, and construction of facilities to a
reasonable and appropriate extent;
AS 16.12.070 provides department authority to
approve source and number of shellfish taken for
use as brood stock.
AS 16.12.080 places restrictions on how monies
received from sale of shellfish may be used only
for operating costs associated with their
facilities;
AS 16.12.090 Relates to Cost Recovery Fisheries
and provides a means by which a shellfish
hatchery may contract to either harvest and sell
shellfish, or to implement a self-assessment from
amongst its membership, for purposes of
recovering operational costs associated with the
hatchery.
AS 16.12.100 Gives the department authority to
inspect facilities at any time while the facility
is in operation;
AS 16.12.110 Requires a permit holder to submit
an annual report to the department;
AS 16.12.199 provides definitions for "facility,"
"genetically modified shellfish," and
"shellfish;"
Sec. 5: Provides the Commercial Fisheries Entry
Commission authority to issue special harvest area
entry permits to holders of private nonprofit
enhancement project permits.
Sec. 6: Defines legal fishing gear for special harvest
area entry permit holders.
Sec. 7: adds marketing and promotion of aquatic farm
products to the powers and duties of the Alaska
Seafood Marketing Institute (ASMI).
Sec. 8: Conforming amendment, prohibiting ASMI from
promoting aquatic farm products not from Alaska, a
specific region of Alaska, or by a specific brand
name.
Sec. 9: Conforming amendment regarding the definition
of "seafood."
Sec. 10: Utilizes the existing definition of "aquatic
farm products" in AS 16.40.199
Sec. 11: Exempts shellfish raised in a private
nonprofit shellfish project from the definition of
"farmed fish."
Sec. 12 Makes application fee revenues received by the
Department of Fish and Game from the salmon hatchery
and shellfish hatchery programs be accounted for
separately. Appropriations from those program receipts
are not made from the unrestricted general revenue
fund.
Sec. 13: Establish state corporate income tax
exemption for a nonprofit corporation holding a
shellfish fishery enhancement permit.
Sec. 14: A technical conforming amendment required by
prior session law and has no impact on the policies
being set in this bill.
Sec. 15: Exempts shellfish harvested under a special
harvest area entry permit from seafood development
taxes.
Sec. 16: Establishes an effective date for the salmon
hatchery permit application fee described in section 2
of this bill.
Sec. 17: Authorizes the Department of Fish and Game to
adopt implementing regulations.
Sec. 18: Establishes an immediate effective date for
section 17 of this bill pursuant to AS 01.10.070(c).
Sec. 19: Establishes an effective date for section 14
of this bill concomitant with sec. 2, Chapter 55, SLA
2013 and has no effect on the policy set forth in this
bill.
1:50:12 PM
Co-Chair Merrick indicated that the committee would hear
invited testimony.
1:50:33 PM
SAM RABUNG, DIRECTOR, DIVISION OF COMMERCIAL FISHERIES,
DEPARTMENT OF FISH AND GAME (via teleconference),
introduced himself. He reported that he was appointed to
the governor's Mariculture Task Force by Governor Bill
Walker and remained a member since its establishment in
2016. He delineated that the DFG mission statement was to
protect maintain, and improve the fish, game, and aquatic
plant resources of the state and manage their use and
development in the best interest of the economy and the
wellbeing of the people of the state consistent with the
sustained yield principle. He cited AS 16.05.092 (2) (3):
(2) encourage the investment by private enterprise in
the technological development and economic utilization
of the fisheries resources;
(3) through rehabilitation, enhancement, and
development programs do all things necessary to ensure
perpetual and increasing production and use of the
food resources of state waters and continental shelf
areas;
Mr. Rabung continued that the work described in the statute
was previously under the purview of the Division of
Fisheries Rehabilitation Enhancement and Development (FRED)
until 1994 when the division was merged with the Division
of Commercial Fisheries (DCF). The division no longer
carried out fisheries restoration, rehabilitation, or
enhancement projects. The Division of Commercial Fisheries
still operated the pathology, gene conservation, mark and
tag, and age labs and contracted out prior FRED hatcheries
to private non-profit aquaculture associations. The
Statewide Aquaculture Planning and Permitting Section
provided salmon hatchery permitting and oversight. The
section was responsible for the salmon hatchery program,
aquatic farming program, and permitting research and
educational projects statewide. He explained the
significant differences between aquatic farming and
fishery enhancement. He expounded that currently the state
limited mariculture to aquatic farming. He defined aquatic
farming as a facility the grows farms or cultivates aquatic
farm products in captivity or under positive control.
1:53:18 PM
Mr. Rabung continued that aquatic farm product was
considered private property. He elaborated that in
contrast, the other form of mariculture was fishery
enhancement, which entailed the restoration,
rehabilitation, or enhancement of natural production and
benefitted the common property fisheries where the
organisms were harvested for personal, sport, or commercial
use. The bill would allow mariculture for fishery
enhancement. He noted that restoration and rehabilitation
projects ceased once its targets were achieved. Enhancement
boosted naturally producing stock above what it could
produce in nature to provide harvestable surplus. If the
project ceased, the supplemental harvest was eliminated and
reverted to natural harvest levels.
Mr. Rabung provided an example of a mariculture enhancement
project; the Alaska King Crab Research, Rehabilitation, and
Biology Program (AKCRRB). He elucidated that the program
planted juvenile king crab from nearby stocks into
locations that had previously supported larger stocks.
Fishing closures was the only tool the department had to
try to restore overfished stocks. The bill allowed for
enhancement projects as another tool to try to rebound
depleted stocks. He offered an example of a mariculture
rehabilitation project that was collecting adult razor
clams from the east side of Cook Inlet inducing them to
spawn in a hatchery and replanting them on the same beach.
He mentioned that the same method could work for hard shell
clams in Kachemak Bay or for collecting and aggregating
abalone in Southeast Alaska.
Mr. Rabung highlighted mariculture enhancement projects. He
elucidated that back stocking sea cucumber juveniles
immediately following a dive fishery that occurred on a
three year rotation was a prime example of enhancement and
could allow for a quicker rotation. He added that the
enhancement example could be done with other species, i.e.,
geoduck or king crab to increase the numbers available for
harvest. He indicated that targeting enhanced stocks could
allow for the rebounding of other natural stocks by
reducing their harvest pressure. The passage of a law that
would allow for restoration, rehabilitation, or enhancement
of shellfish stocks was one of the priorities identified in
the Alaska Mariculture Taskforces Mariculture Development
Plan. He shared that if HB 41 passed, the work would be
subject to oversight by DFG. The state was known for the
most stringent aquaculture guidance in the world. He was
confident the department had the ability to carry out the
provisions of HB 41.
1:58:09 PM
JEREMY WOODROW, EXECUTIVE DIRECTOR PRESIDENT, ALASKA
SEAFOOD MARKETING INSTITUTE, JUNEAU (via teleconference),
read from a prepared statement:
Alaska Seafood Marketing Institute (ASMI) fosters
economic development of Alaska's seafood resources. It
plays a key role in positioning Alaska's seafood
industry as a competitive market-driven food
production industry and functions as a brand manager
of the Alaska Seafood family of brands. Recognizing
mariculture is an emerging maritime industry with
tremendous opportunity for Alaska's coastal economies,
ASMI supports HB 41.
Mariculture involves cultivating marine organisms in
the ocean for food and other products such as oysters,
mussels, abalone, or geoducks, as well as seaweeds,
such as kelp. The practice does not require feed,
fertilizers, insecticides, herbicides, or antibiotics,
making it sustainable and inexpensive. Because of its
economic and environmental promise, the Alaska
Mariculture Task Force has identified the goal to
build Alaska's mariculture production into a $100
million per year industry in 20 years.
In order to increase jobs and economic opportunity for
fishermen and Alaskan businesses, the ASMI Board of
Directors unanimously supports HB 41 and legislative
action to allow for the marketing of mariculture
products or "aquatic farm products" as defined in
Alaska Statute 16.40.199, which it is currently
prohibited from doing. It is joined in support of this
bill by the Alaska seafood industry, the Alaska
Mariculture Task Force, and the Alaska Shellfish
Growers' Association, as well as many new Alaskan-
owned and operated businesses.
Not only does mariculture present a significant
economic opportunity for Alaska, it offers the ability
for seafood companies to diversify their existing
product portfolios. With the support and efforts of
the Mariculture Task Force, small family businesses
have already proven products to be commercially viable
by selling boutique products while offering fishermen
opportunities to utilize their vessels and skills on
shoulder seasons.
If passed, ASMI plans to include mariculture products
in its effective and lucrative consumer, retail,
foodservice, and food aid outreach, in domestic and
targeted foreign markets. In efforts to ramp up this
burgeoning industry, ASMI will lend the same expertise
in outreach to this industry as it has to Alaska's
seafood industry for 40 years.
Thank you for recognizing the value of Alaska's
maritime economy and for your consideration of
meaningful legislation to aid economic development
across Alaska's coastal communities.
2:01:06 PM
HEATHER MCCARTY, CHAIR, MARICULTURE TASK FORCE (via
teleconference) introduced herself. She relayed that she
was also the Co-Chair of the AKCRRB program. She also
worked for the Central Bering Sea Fishermens Association
(CBSFA) located on the Priblof Islands. She reiterated the
history of HB 41. She offered that the mariculture
taskforce had two priority recommendations contained in HB
41:
• Allow for shellfish fishery enhancement and
restoration.
• Amend the ASMI statutes to allow marketing of
aquatic farm products.
Ms. McCarty continued that the CBSFA had a great deal of
interest in shellfish mariculture. She explained that
until 40 years ago a viable blue crab fishery existed
around the Priblof Islands. So far, the only tool to
restore the fishery has been to close the fishery. She
described a similar situation with the depletion of red
king crab near Kodiak that collapsed at the same time. She
related that citizens from Kodiak and the Priblofs formed
the AKCRRB program with the hope of rehabilitating crab
stocks. The program was in existence for 15 years and
undertook research to understand the crab lifecycle. The
program was successful in rearing crab in captivity and the
next step was to produce more crab stock and release it
into the wild. The crab rearing technology was transferable
to other crab species. She described the strong support for
the bill, especially for the rehabilitation of crab stocks.
She spoke to the marketing portion of the bill and felt
that it was also extremely important.
2:06:15 PM
GINNY ECKERT, CO-CHAIR, STEERING COMMITTEE, ALASKA KING
CRAB RESEARCH, REHABILITATION, AND BIOLOGY PROGRAM (via
teleconference), shared that she was also a fisheries
professor at the University of Alaska Fairbanks and
Director of Alaska Sea Grant. She also served as the
Science Director for the AKCRRB program. She had worked in
many shellfish fisheries. She spoke to the need for the
rehabilitation of shellfish. She related that many of the
shellfish had declined in abundance and were important
fishery resources. She elaborated that the king crab
fishery crashed in the early 1980s due to overfishing in
the 1960s and 1970s. The populations depressed so low
that they were not able to recover on their own. Over the
last decade many scientists had studied king crab and
published papers regarding their lifecycle. Enough is now
known to move king crab rehabilitation forward in a
responsible manner. She illuminated that the research
revealed the population was bottlenecked and struggling to
recover on its own. They performed a test model of planting
crabs in the wild and were able to recover planted animals
one year later. She reported that genetic concerns
accompanied the type of rehabilitation, but genetic studies
were undertaken. The scientists understood the genetics of
the wild population so they could appropriately culture the
planted stock to minimize impacts on the wild stocks. Ms.
Eckert along with colleagues also surveyed 17 traditional
abalone sites and found abalone in only 4 sites; Abalone
was also overfished. She emphasized that there was
potential for restoration in Alaska based on efforts in
Washington state. The bill was needed to move forward with
any of the restoration projects.
2:10:48 PM
Co-Chair Merrick OPENED Public Testimony.
2:11:08 PM
Co-Chair Merrick CLOSED Public Testimony.
Co-Chair Merrick asked Mr. Woodrow to review published Zero
Fiscal Note 1 from the Department of Commerce, Community
and Economic Development [FN 1 CED] appropriated to ASMI.
Mr. Woodrow indicated that ASMI did not anticipate any
fiscal impact if HB 41 was adopted.
2:11:50 PM
Co-Chair Merrick invited Mr. Rabung to review Fiscal Note 2
[FN 2 DFG] and Fiscal Note 3 [FN 3 DFG] from DFG that were
both zero and were appropriated to the Division of
Commercial Fisheries. Mr. Rabung shared that the division
would utilize existing staff in its aquaculture section to
administer the program. The department would absorb any
costs related to the bill.
2:12:45 PM
Co-Chair Merrick requested a review of the Special
Appropriations published Fiscal Note 4 appropriated to
Shared Taxes.
KYLE SCHERRER, PROGRAM BUDGET ANALYST, OFFICE OF MANAGEMENT
AND BUDGET (via teleconference), reported that the fiscal
note was indeterminate. He furthered that because the
Department of Revenues (DOR) revenue estimate was
indeterminate the appropriation to the hatchery permit
holder is also indeterminate.
Co-Chair Merrick asked DOR to review published Fiscal Note
5 from DOR [FN 5 DOR] appropriated to Taxation and
Treasury.
2:13:37 PM
CHRIS BECKER, AUDITOR, TAX DIVISION, DEPARTMENT OF REVENUE
(via teleconference), reported that Fiscal Note 5 was
indeterminant. He expounded that it was not currently
possible to determine the revenue impact because the number
of fishers and hatcheries that would participate was
unknown. He added that implementation costs were zero.
2:14:16 PM
Representative Thompson asked if the committee would be
moving out the bill today. Co-Chair Merrick responded in
the affirmative. Representative Thompson indicated he had
an amendment currently being drafted.
Co-Chair Merrick set the bill aside.
HB 41 was HEARD and HELD in committee for further
consideration.
HOUSE BILL NO. 47
"An Act renaming the Alaska Native Language
Preservation and Advisory Council as the Council for
Alaska Native Languages; and relating to the Council
for Alaska Native Languages."
2:15:33 PM
REPRESENTATIVE ANDI STORY, SPONSOR, read from a prepared
statement:
Thank you, Chair Merrick, and members of the House
Finance Committee. For the record I am Rep. Andi
Story, representing district 34, which is on A'akw
Kwaan land and the Indigenous language of this region
is Tlingit.
House Bill 47 developed as the Alaska Native Language
Preservation & Advisory Council, wants to do two
things:
1. Shorten the Council name
2. Expand its' membership.
The Council provides recommendations and advice to
both the Governor and Legislature on programs,
policies, and projects, and to network and advocate in
support of the Council's mission.
The mission is to advocate for the survival and
revitalization of Alaska Native languages through
collaboration and sharing for all.
The Alaska Native Language Preservation & Advisory
Council was created by the second session of the 27th
Legislature. The Governor appointed five voting
members who are
professional language experts and who represent
diverse regions of the state.
Additionally, there are two nonvoting members. One
member of the Senate, appointed by the Senate
President and one member of the House, appointed by
the speaker. I have been fortunate to serve as the
non-voting member from the House, and this is how this
information was brought to me.
The two seemingly small changes proposed in HB 47 have
significant meaning to the council. The first item in
the name change simplifies the name from The Alaska
Native Language Preservation & Advisory Council to
Council for Alaska Native Languages. This reflects the
goal of sustaining and reinvigorating Alaska Native
language, - a concept that goes beyond preservation.
The second change requested is to add two new members,
going from 5 to 7 voting members. Alaska has about 20
distinct languages, and to be able to be inclusive of
more languages the council feels two more members
would capture a greater perspective.
I appreciate your consideration of House Bill 47. It
supports the requests of the council.
Chair Merrick, depending on the wishes of the
committee, my staff, Mary Aparezuk, is available to
walk through the sectional analysis.
HB 47 has a $10,000 fiscal note. Sandra Moeller from
the Department of Community, Commerce and Economic
Development is on-line with an explanation.
_
Importantly there is an invited testifier, X 'unei
(khoo - nay) Twitchell, online who is a voting member
of the council and a long-time indigenous language
advocate. We are all happy to take any questions.
Co-Chair Merrick directed Rep. Storys staff to review the
sectional analysis.
2:19:27 PM
MARY APAREZUK, STAFF, REPRESENTATIVE ANDI STORY, (via
teleconference), appreciated the members taking the time to
hear the bill. She read the sectional analysis:
Section 1: Amends AS 44.33.520(a) simplifies the name
of the Council from "Alaska Native Language
Preservation and Advisory Council" to "Council for
Alaska Native Languages."
Section 2: Amends AS 44.33.520(c) by changing voting
members from "five" to "seven."
Co-Chair Merrick moved to invited testimony.
2:20:48 PM
XH'UNEI, LANCE A. TWITCHELL, ASSOCIATE PROFESSOR, ALASKA
NATIVE LANGUAGES, UNIVERSITY OF ALASKA SOUTHEAST (via
teleconference) spoke in favor of HB 47. He read a prepared
statement:
Thank you, honorable Representatives. Gunalch?esh
Representative Story and her office for introducing
this House Bill 47. My name is Xunei Lance Twitchell,
and I represent myself here today, speaking in favor
of this bill. It is an honor to visit with you here
today, and to talk about the sacred and irreplaceable
languages of Alaska. My work is teaching the Linig?t
language at the University of Alaska Southeast and
advocating for the health and safety of 22 additional
Alaska Native languages as a scholar of language
revitalization. I am also the vice chair of the Alaska
Native Language Preservation and Advisory Council.
However, I do not speak for those organizations today.
I wish I could tell you that there was great news
regarding Alaska Native languages. I wish I could say
that since the last time I testified to this great
body of elected leaders to declare a state of
emergency for our languagesthat sufficient work had
been done and changes were made that led to hope. That
is simply not the case. As leaders, let me tell you
what is going to happen on your watch, and what
history books will remember you for: half of the
surviving Alaska Native languages are going to die
out. The silence will be horrifying, and to be honest,
many of your colleagues will never even notice, unless
they happen to read about it. There is so much work to
do, and so much loss on a daily basis, and that work
falls upon six people from the perspective of the
State of Alaska: the five council members and the
single employee of the Alaska Native Language
Preservation & Advisory Council.
When this Council was formed in 2012, many of us doing
this work felt a charge of energy. We felt seen and
heard. But then politics began to be played. The staff
positions for the council were cut from two to one.
The reports produced every two years often fell on
ears that refused to listen and eyes that refused to
read. If Alaska Native languages were important to
this state, then this congress would have heard the
calls for change and taken more courageous action
since that time. We had at least 23 languages that
were spoken in this state before contact, and 21 of
them are still spoken today. But by my estimations,
over half of them may have fewer than 10 speakers
remaining, and we are only talking about incremental
change, are only toeing a line that keeps us in a
death spiral. And let me tell you this: if this was
your future on the line. If this was a total break
between your present existence and all of your
ancestors, and if you stood to lose the chance to pass
along your identity to your descendants, I would do
all that I could to help you. This is the way of the
human being. I ask you this: can you, not as a single
Representative, not as a committee, not as a House of
Representatives, but as the Legislature of this state,
could you collectively say the same?
This is a small change that the Council has been
asking for since our last report came out two years
ago. We are not in the business of preservation. We
need substantial and lasting change that leads to
revitalization. What leaders are we if we allow entire
ways of knowing to be eradicated by systemic and
deliberate genocide? What kind of humans are we if we
stand upon a foundation of racism and allow systems of
communication that are tens of thousands of years old
to be lost? Can we, with steadfast determination and
unity, dream of a future other than death? Can we find
the courage to create a different destiny and be real
about the levels of inaction and total lack of
compassion? To all of this, I would say: yes.
This is a small change, and as a scholar and advocate
of language revitalization I have many ideas for
larger changes, but I implore you to grow this council
and find a way to elevate the voices that are burdened
with these loses. Give it a stronger and more relevant
name regarding the work that we do, and the
terminology currently used in this field. We are doing
all we can to stop the tide with our bare hands, from
which this government has removed the tools and the
populace. Have courage, my leaders. A brighter future
calls you if you choose to listen. A new day is
waiting if you choose to see. In our language, we say,
gunalch?esh, thank you.
2:26:06 PM
Representative Josephson thanked Dr. Twitchell for his
statement. He asked what kind of resources would be needed
beyond the scope of the bill for language preservation.
Mr. Twitchell thought that currently it would require a
rearrangement of existing resources. He did not anticipate
a substantial cost to create a college of Alaska Native
languages because there were already teachers in place.
However, there was no specified degree program or clear
direction to create teachers. He suggested that the Alaska
Native Language Center receive enough support to produce
high quality publications and enable language
documentation. He suggested the creation of an Alaska
Native Media network, which would need initial startup
funding but could work through Alaska Public Radio. The
network would establish a central office that produced
audio and video content for broadcasting throughout the
state. He noted that a similar path was very effective in
Hawaii and New Zealand to promote Hawaiian and Maori
languages.
Co-Chair Merrick relayed that Sandra Moller would speak to
the published Fiscal Note 1 from the Department of
Commerce, Community and Economic Development [FN 1 CED]
appropriated to the Division of Community and Regional
Affairs(DCRA).
2:28:47 PM
SANDRA MOLLER, DIRECTOR, DIVISION OF COMMUNITY AND REGIONAL
AFFAIRS, DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC
DEVELOPMENT (via teleconference), reported that the
language program existed within the division. She related
that there was not a separate budget for the council. The
division would require an additional $10 thousand in travel
per year for the two additional members to travel to two
meetings per year at a cost of $2.5 thousand per trip.
2:29:32 PM
Representative Edgmon thought that only 1 staff member
travelled. Ms. Moller replied that two board members
travelled.
2:30:11 PM
Representative Story clarified that the fiscal note was for
the two additional voting council members to travel.
Representative Edgmon had heard that the council members
had not travelled since 2018. Representative Story answered
in the affirmative. She conveyed that in 2015 the council
switched from two trips each year to one trip and had not
travelled since 2018. She added that she was honored to
serve as a non-voting member of the council. She indicated
that there was a report which she included in the members
packets titled The Alaska Native Language Preservation &
Advisory Council's 2020 Biennial Report to the Governor and
Legislature (copy on file). She directed attention to page
18 that contained findings and recommendations of the
council and encouraged members to read the recommendations.
Co-Chair Merrick set HB 47 aside.
HB 47 was HEARD and HELD in committee for further
consideration.
2:31:46 PM
AT EASE
2:32:58 PM
RECONVENED
Co-Chair Merrick indicated the next bill was HB 127.
HOUSE BILL NO. 127
"An Act relating to the Alaska Municipal Bond Bank
Authority."
2:33:07 PM
REPRESENTATIVE BART LEBON, SPONSOR, noted that the bill was
heard in committee the prior year. He provided a brief
summary. This bill expanded the authority of the Alaska
Municipal Bond Bank Authority regarding bonding capacity to
regional health organizations at up to 100 percent of the
project cost. He expounded that currently project and
funding limitations were in place. The bill also gave the
University of Alaska (UA) access to refinance debt or take
on additional debt through the bond bank.
2:35:09 PM
AIMEE BUSHNELL, STAFF, REPRESENTATIVE BART LEBON, reviewed
the sectional analysis:
Section 1. AS 44.85.010:
Removes the project scope limitation of only heating
or energy projects for the University of Alaska
Fairbanks
Section 2. AS 44.85.090:
Removes the 49 percent project participation on the
Alaska Municipal Bond Bank for regional health
organization projects
Raises the $102,500,000 project limit for a single
regional health organization project to $250,000,000
Section 3. AS 44.85.180:
Raises the $87,500,000 cap for University of Alaska
projects to $500,000,000
Raises the $205,000,000 cap for regional health
organization projects to $500,000,000
2:36:39 PM
DEVEN MITCHELL, EXECUTIVE DIRECTOR, ALASKA MUNICIPAL BOND
BANK AUTHORITY, DEPARTMENT OF REVENUE (via teleconference),
relayed the support of the bond band for the HB 127. He
conveyed that the purpose of the bill was not to increase
the use of debt but to make debt that was set to be issued
more affordable, which was the essence of the bond bank
program. He reported that the bond bank had an outstanding
balance of $1.1 billion. The amount issued for regional
health organizations was roughly $144 million, which saved
the Alaskans it served $65.3 million in debt service.
2:39:05 PM
Representative Josephson thought the bill would allow for
additional bonded debt. He asked Mr. Mitchell to comment.
Mr. Mitchell clarified that his statement meant that the
debt would be issued under any circumstance. He elucidated
that if a project was vetted and in the financing phase of
development the project would be financed with or without
participation of the bond bank. The bond bank participation
was an alternative to other financial mechanisms that
reduced costs of debt for Alaskans. Representative
Josephson inquired whether the bill crowded out or vied
with other opportunities for bonded indebtedness. Mr.
Mitchell replied that the support that the state provided
the bond bank was utilized to reduce the cost of borrowing
and never used to pay the debt service of the bonds. He
indicated that the underlining borrowers had repaid all
debt service since the programs inception in 1975. Rating
analysts were aware that the state provided support for the
program, but they do not count it against the capacity of
the state to issue debt for other needed capital projects.
Representative Josephson noted that Mr. Mitchell described
45 years of outstanding repayment history for the bond
bank. He wondered what accounted for that. Mr. Mitchell
answered that a rigorous review process was required at the
projects inception and again when seeking financing through
the bond bank. He exemplified a proposed bonded community
project, that would be vetted by local elected officials
and brought to a vote of the community to affirm community
support and issuance of the debt. He delineated that entity
would then apply with the bond bank for a loan, which would
initially receive vetting by a third party financial
advisor contracted by the bond bank. The advisor would
provide analysis and make a recommendation to the bond
banks board of directors who also had to approve the loan.
The processs scrutiny would not allow a speculative or
questionable loan to proceed through the bond bank.
2:43:49 PM
Representative Edgmon determined that the bill supported
two entities. He asked if HB 127 was a clean-up bill
because the two entities fit under the same subject matter.
Mr. Mitchell replied in the affirmative. He explained that
at the inception of the regional health organizations
bonding authority in 2015, there was concern over the new
line of lending regarding the financial strength of the
organizations. Due to the uniqueness of the loans and the
lack of knowledge regarding regional health organizations
there were limitations put into statute that became
inefficient. Based on the learned experience and financial
strength of the organizations the bond bank wanted to
address the inefficiencies. He furthered that in the recent
past UA received substantial credit rating downgrades due
to budget reductions. The university had bonding authority
specific to a power generating and heating facility at the
UA Fairbanks campus. The board felt that broadening the
bond bank authority would allow UA to leverage the bond
ratings of the bond bank authority, if advantageous for
other projects. He summarized that the legislation allowed
both entities the opportunity to utilize the bond bank for
sound projects if they desired.
2:46:51 PM
Representative Edgmon commented that the bill also spoke to
the economic power of the Alaska Native and the regional
health organizations strength. He recounted that UAs bond
debt service was roughly $28 million per year. He
considered the amount reasonable compared to their overall
budget.
2:47:27 PM
Representative Wool cited the bill and remembered the issue
of a $500 million cap for the university. He asked what its
total debt was and how was the $500 million figure derived.
Mr. Mitchell responded that the number was intended to be a
"not to exceed amount" that could provide for any potential
existing or future need. He reminded members that any UA
bond issue needed legislative approval. The university also
had its own checks and balances in place that limited the
ability of UA to acquire new indebtedness. Representative
Wool recalled that a portion of the power plant was bonded,
and another portion was paid by the state. He read the
following from the sponsor statement:
This additional financing tool is not intended to be a
substitute for capital appropriations through the
legislature.
Representative Wool asked the bills sponsor if he could
assure that the legislature would still provide capital
appropriations to the university knowing it had access to a
large amount of bonding authority.
2:50:39 PM
Representative LeBon replied that the University would seek
the best financing rate it could find for projects. He
added that UA would happily accept capital funding if the
legislature wanted to appropriate money through the capital
budget. He viewed the provisions in HB 127 as offering UA
an additional financing option.
Representative Carpenter asked what the alternatives were
if the borrower did not go to the bond bank.
2:51:52 PM
Representative LeBon replied that the options were limited.
He offered that it would be highly unusual for a
traditional bank to loan money on a university property.
The bank was obligated to seek collateral and pledging a
building on a university campus was problematic. In his 42
years of banking, he never lent money to a public education
institute. Alternatively, a regional health organization
could secure a loan through a traditional bank. He deemed
that the bank would likely finance such a facility with
government agencies like the Bureau of Indian Affairs or
United States Department of Agriculture (USDA)
participation.
2:53:11 PM
Representative Carpenter wondered why UAs bonding
authority was limited to heating and energy projects.
Representative LeBon deferred to a representative from UA
to answer the question.
2:53:39 PM
MYRON DOSCH, CHIEF FINANCIAL OFFICER, UNIVERSITY OF ALASKA,
FAIRBANKS (via teleconference), voiced that the university
supported the legislation. He reiterated that the original
authority was limited to the heating and power plant
project. He conveyed that at its conception the bonding
authority was related to accomplishing the specific
project. The university supported HB 127 because it
provided an opportunity for bottom line savings by
securing a better interest rate on debt than it might
receive on its own. He added that UA had its own
authorization to issue debt and considered it very
seriously irrespective of HB 127. A project evaluation went
through a rigorous process prior to issuing debt.
Representative Carpenter asked about Mr. Dosch's comments
about better interest rates through the market and he
wondered what the market he referred to was. Mr. Dosch
replied that the difference in interest he referred to was
the credit rating of the bond bank versus the credit rating
of the university. He explained that to the extent that the
bond banks credit rating was better than UAs, meant the
margin would provide a better interest rate. In terms of
Representative Carpenter's question about a market, he was
speaking of the general bond market or capital market where
bonds were bought through an underwriter in a negotiated
deal.
2:58:00 PM
Representative Josephson asked if the legislature had to
sign off on the portion of the bill that had to do with the
University of Alaska but not regional health organizations.
Mr. Mitchell responded that the regional health
organizations did not have to go through a state process to
issue bond debt. He added that neither did any other
entities using the bond bank: municipalities, joint action
agencies, and joint insurance associations.
2:59:11 PM
Representative Josephson asked whether there was a
requirement that a UA bond debt increase over $2.5 million
needed legislative approval. Mr. Mitchell answered that it
was a requirement unique to the University System. He
explained that the bond bank entered into loan agreements
with borrowers to purchase the loan on a private placement
basis; the bond bank was the only purchaser. The bond bank
issued bonds in $5 thousand blocks to the market that were
purchased by investors. A requirement of legislative
approval would be part of the process of the underlying
borrower and not the bond bank. Representative Josephson
could not find the $2.5 million limit in the current bill.
Mr. Mitchell responded that the requirement was already in
statute.
Co-Chair Merrick asked Mr. Mitchell to review the published
Department of Revenue fiscal note [FN 1 REV] appropriated
to the Alaska Municipal Bond Bank.
3:01:37 PM
Mr. Mitchell articulated that the fiscal note assumed that
there would be a series of issuances by regional health
organizations or UA totaling $100 million over a number of
years. Therefore, there would be estimated costs of about
$360 million per year for services associated with the bond
issues. The costs would be paid by the receipts of the bond
bank. He explained that typically when bonds were sold a
cost of issuance account was created that was used to pay
for costs related to issuing the bonds and were paid from
the proceeds of the bond issue and were incorporated into
the interest rate the borrower received.
Representative Edgmon relayed that fiscal notes typically
did not include cost savings. He reminded the committee
that the borrowers would realize cost savings.
Mr. Mitchell thought Representative Edgmon's point was
excellent and reiterated that the entire purpose of the
bond bank was to save money. Entities would save money by
going to the bond bank by attaining lower interest rates
despite the costs related for the issuance of the bonds.
Co-Chair Merrick invited Mr. Dosch to make further
comments.
Mr. Dosch did not have any additional comments. He
reiterated that the University supported the bill, and he
was available for questions.
Representative Carpenter thought it sounded good if the
state could save money. He referred to the second paragraph
of the fiscal note analysis related to default and the
moral obligation of the state for bond repayment. He noted
the paragraph the Bond Bank would request funding from the
Legislature and Governor to pay their debt service. He was
curious if the full faith in credit included the Permanent
Fund. He wondered if the Permanent Fund was obligated as
well.
3:06:40 PM
LUKE WELLES, CHAIRMAN, ALASKA MUNICIPAL BOND BANK (via
teleconference), noted that he also worked for the Alaska
Native Tribal Health Consortium.
Representative LeBon asked if Mr. Wells could review the
payment source and how the bond sales were underwritten and
how the regional health organizations stood by the debt.
Mr. Wells relayed that the most recent bonded facility was
a new hospital in Bethel through the Yukon Kuskokwim
Healthcare Corporation. He explained that the corporation
entered into a joint venture agreement with the Indian
Health Service where the healthcare corporation was
responsible for building the facility. The cost of the
building was borne in half by a federal entity and the
other half by the bond bank. Once the facility was built,
the regional health organization received a staffing
package from the Indian Health Service that paid for
staffing needs in perpetuity and for contract support costs
that will pay for the bonds. He also indicated that
whenever a tribal member received care at a regional health
organization, the state was reimbursed at 100 percent
Federal Medical Assistance Percentage (FMAP) if the member
was also on Medicaid, versus 50 percent if care was
administered outside of the tribal health system. He
concluded that it was in the state's best interest to
ensure that all tribal members received care at regional
health facilities throughout the state.
3:09:33 PM
Representative Carpenter surmised that the risk of default
was low. He still wondered whether the state would be
responsible if there was a default in payments. He asked
for further detail. He wondered if the Permanent Fund would
be used for repayment. Mr. Mitchell responded in the
negative and stressed that the Permanent Fund was not
obligated in any way to debt repayment. He explained that
the moral obligation meant a statutory framework that
required a reserve fund to secure the bonds along with
annual reporting requirements on the status of the reserves
to the legislature. If the reserves were deficient, the
issuer would request a replenishment of the reserves. There
would be potential ramifications if the legislature chose
not to fund the reserves, but it was not required.
Co-Chair Merrick thanked Representative LeBon for
presenting the bill. She would set the bill aside
HB 127 was HEARD and HELD in committee for further
consideration.
Co-Chair Merrick reviewed the agenda for the following
meeting.
ADJOURNMEN
3:12:03 PM
The meeting was adjourned at 3:12 p.m.