Legislature(1993 - 1994)
04/07/1994 08:15 AM Senate FIN
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
April 7, 1994
8:15 a.m.
TAPES
SFC-94, #50, Side 2 (517-end)
SFC-94, #52, Side 1 (000-474)
CALL TO ORDER
Co-chair Drue Pearce convened the meeting at approximately
8:15 a.m.
PRESENT
In addition to Co-chairs Pearce and Frank, Senators Jacko,
Kelly, and Rieger were present. Senator Sharp arrived soon
after the meeting began, and Senator Kerttula arrived as it
was in progress.
ALSO ATTENDING: Senators Lincoln and Miller; Representative
Hoffman; Edgar Blatchford, Commissioner, Dept. of Natural
Resources; Tom Kron, Regional Supervisor, Southcentral
Regional Office, Division of Commercial Fisheries Management
and Development, Dept. of Fish and Game; Myron Naneng, Co-
chair, Association of Village Council Presidents, and
Member, RAVEN Commission; Suzy Erlich, Member, RAVEN
Commission; David Osterback, Member, RAVEN Commission; Glenn
Reed, Assistant Commissioner, Dept. of Commerce and Economic
Development; Tony Nakazawa, Director, Community and Rural
Development Division, Dept. of Community and Regional
Affairs; Herv Hensley, Director, Division of Energy, Dept.
of Community and Regional Affairs; John Borbridge,
Subsistence Specialist, Bureau of Indian Affairs; Gerry
McCune, United Fishermen of Alaska; Dr. Jeff Koenings,
Director, Division of Commercial Fisheries Management and
Development, Dept. of Fish and Game; Josh Fink, aide to
Senator Kelly; and aides to committee members and other
members of the legislature.
SUMMARY INFORMATION
APPROVAL OF ROGERS CONTRACT
Motion was formally made and APPROVAL GRANTED for
the hire of David Rogers as contractual legal
counsel to committee.
RAVEN COMMISSION
Commissioner Edgar Blatchford and other members of
the RAVEN commission presented the commission's
interim report and recommendations for immediate-
term action responses to the Arctic-Yukon-
Kuskokwim River systems chum salmon fisheries
decline and economic disaster declaration.
SJR 36 - GOV & LT GOV MUST RECEIVE MAJORITY VOTE
Information was presented by Josh Fink. CSSJR 36
(Jud) was REPORTED OUT of committee with a new,
$2.2 fiscal note from the Office of the Governor,
Division of Elections.
SB 311 - CREDIT TO FISHERY RESOURCE LANDING TAX
Information was provided by Senator Jacko and
discussion among members followed regarding
application of the credit, in both the
proposed bill and existing legislation,
to items other than training and
scholarships. The bill was subsequently
HELD in a subcommittee consisting of
Senators Pearce, Frank, and Jacko.
CONTRACT FOR LEGAL SERVICES - DAVID ROGERS
Upon convening the meeting, Co-chair Pearce noted that
approximately a month ago she sought and received committee
approval to hire David Rogers to do legal work in
conjunction with SB 215 and SB 308. She then advised that a
contract for services was prepared, and she asked that
members delegate signature responsibilities to her, under
procurement procedures sec. 150(e), for the professional
services contract between the committee and Mr. Rogers.
Co-chair Frank so MOVED. No objection having been raised,
IT WAS SO ORDERED.
SENATE JOINT RESOLUTION NO. 36
Proposing amendments to the Constitution of the State
of Alaska requiring that candidates for governor and
candidates for lieutenant governor receive more than 50
percent of the votes cast to be elected and changing
the term of office of the governor and the lieutenant
governor.
Co-chair Pearce directed that SJR 36 be brought on for
discussion. JOSH FINK, aide to Senator Kelly came before
committee. He explained that SJR 36 proposes constitutional
amendments that would require candidates for governor and
lieutenant governor to receive more than 40% of the vote at
the general election. If no candidate receives at least
40%, the top two candidates would compete in a run-off
election four weeks later. The winner of that race would be
sworn in January 1, rather then December 1, as the state
constitution now requires.
The resolution initially required 50% of the vote. Senate
State Affairs amended the percentage to 40 to track run-off
provisions of the Municipality of Anchorage. Senate
Judiciary amended the length of time between the general and
run-off election from 28 to 35 days.
Senator Kelly observed that the accompanying fiscal note is
misleading. The $764.9 would be required only if a run-off
election were necessary. The cost of the run-off could be
supplemented in the next legislative session. The bill
would not take effect until 1998. Experience has shown that
in the past nine gubernatorial races, two would have
required run-offs.
In response to a question from Senator Rieger, Senator Kelly
advised that similar legislation was introduced in the prior
legislature. It passed the House but died on the Senate
calendar awaiting floor action the final day. Senator Kelly
voiced his belief that the two-party system is dead. The
general election will thus have numerous candidates on the
ballot. The leader of the state must have a mandate to
serve. In the last election, 61% of the voters were
prepared to sign a recall petition because they did not vote
for the elected governor. Senator Rieger concurred in need
for the legislation.
Co-chair Pearce called for additional testimony on the bill.
Co-chair Frank suggested that the division of election be
asked to issue a new fiscal note demonstrating that the bill
would not take effect until 1998. Co-chair Pearce concurred
and noted that the amount for FY 95 should show only the
$2.2 cost of placing the question on the ballot. Senator
Kelly also advised that future costs shown for FY 99 should
also indicate a one in four chance that the funding would be
needed. Co-chair Pearce suggested that the bill be moved
from committee but not transmitted to Rules until the
division of elections furnishes a new fiscal note.
Senator Kelly MOVED that CSSJR 36 (Jud) pass from committee
with individual recommendations. No objection having been
raised, CSSJR 36 (Jud) was REPORTED OUT of committee with a
$2.2 fiscal note from the division of elections, Office of
the Governor. All members present signed the committee
report with a "do pass" recommendation. (Senator Kerttula
was absent from the meeting and did not sign the report.)
SENATE BILL NO. 311
An Act authorizing a credit against the fishery
resource landing tax for certain contributions made by
taxpayers not harvesting fisheries resources under a
community development quota and for contributions based
on fishery resources not harvested under a quota made
by taxpayers harvesting fisheries resources under a
community development quota, amending the manner of
calculating the amount available for revenue sharing by
operation of this credit, and expediting agency review
of the credit applications under that tax; and
providing for an effective date.
Co-chair Pearce directed that SB 311 be brought on for
discussion. She then explained that the bill was introduced
by Senate Finance Committee at the request of Senator Jacko.
It authorizes a credit against the fishery resource landing
tax passed on the last day of last year's session.
Amendments were proposed to the tax at the time it was
making its way through the legislature. SB 311 embodies
some of those amendments. The Senate Resources Committee
reported the original bill from committee but also
transmitted a proposed amendment by Senator Leman. The
amendment would reduce the amount of the credit by half.
The Co-chair referenced further file materials consisting of
letters of support as well as an overview of current
proposed tax credits, prepared by the Dept. of Revenue.
Senator Jacko explained that the earlier enacted 3.3% tax on
factory trawlers was based on the argument that processing
trawlers were not paying any taxes while shore processors
were. Prior to passage of the tax, factory trawlers were
contributing "upwards of $1 million to a non-profit
organization out in Southwest Alaska." The non-profit used
the funding for scholarships, job training, and placement,
primarily on factory trawlers in the Bering Sea. When the
tax was passed, factory trawlers indicated they would
probably not continue to contribute to the organization
unless they received a tax credit. The proposed legislation
would provide a 15% tax credit against the landing tax from
last year. It is anticipated that this credit will cover
the previous $1 million in donations. The tax credit would
be dollar for dollar.
Co-chair Pearce explained that the bill introduced last year
allowed a credit for "all sorts of contributions." Training
programs and scholarships were cited as examples. An
additional provision allowed tax credit dollars to be used
to make contributions of capital in the form of loans or
grants to construct or improve a broad list of items. Co-
chair Frank voiced support for the bill for scholarships or
training programs. He questioned broad application to other
areas. Senator Jacko acknowledged that broad provisions for
use of credits were part of landing tax legislation. He
explained that the proposed bill would allow tax credits for
non-CDQ harvesters. Last year's legislation provided the
credit for the CDQ portion of the harvest. The Senator
further explained that factory trawlers harvest both CDQ and
non-CDQ fish. Co-chair Frank suggested that tax credits for
the non-CDQ portion of the harvest be limited to donations
for scholarships or training. Co-chair Pearce voiced need
to limit the entire tax credit. She then advised of ongoing
research into reasons for allowing tax credits for capital
expenditures. Senator Jacko stressed the importance of
capital projects to Southwest Alaska. Most are very basic
and necessary for infrastructure. Past loans from voluntary
donations to non-profit organizations enabled Nunivak Island
Seafoods to transport processed halibut to market and Atka
fishermen to purchase equipment. Loans were made by the
Bering Sea Fishermen's Development Foundation. The
Foundation also sponsored projects that provided 240 people
with jobs in the seafood industry. Grants for job training
were also provided to the Kotzebue-based Chukchi Sea
Fishermen's Cooperation which works with communities such as
Unalaska, Emmonak, and Bethel.
Co-chair Pearce queried members concerning whether the tax
credit should be dollar for dollar or based on a percentage.
Co-chair Frank voiced a preference for dollar for dollar if
the credit was limited to training endeavors. Senator Jacko
acknowledged that taxpayers have indicated that if the
credit was less than dollar for dollar, incentive would not
be sufficient for them to participate.
Co-chair Pearce directed that the bill be HELD in a
subcommittee consisting of herself and Senators Frank and
Jacko.
RAVEN COMMISSION
Edgar Blatchford, Commissioner, Dept. of Community and
Regional Affairs, came before committee accompanied by
members of the RAVEN (Rural Alaska Village Economies and
Needs) Commission. He explained that he was appointed by
the Governor to co-chair the Commission formed to deal with
low returns of chum salmon on the Yukon and Kuskokwim Rivers
and areas of Norton Sound and Kotzebue.
The Commissioner next introduced MYRON NANENG, Co-chair;
DAVID OSTERBACK from Sand Point; SUZY ERLICH from Kotzebue;
and TOM KRON, representing the Dept. of Fish and Game. He
then recited a list of remaining members of the Commission
(a copy of the membership list is appended to these minutes
as Attachment A).
The Commission was appointed to develop two sets of
recommendations. Final recommendations will deal with a
long-term solution to collapse of chum returns on the Yukon
and Kuskokwim. That effort is underway and a second set of
recommendations will issue when it is completed.
The first set of recommendations, presented to committee at
this time, results from meetings last summer. Commission
efforts were funded through RSAs from the Dept. of Health
and Social Services, Dept. of Commerce and Economic
Development, Dept. of Fish and Game, and Dept. of Community
and Regional Affairs.
SUZY ERLICH, RAVEN Commission Member and former president of
the Northwest Arctic Borough, spoke to the first six
recommendations (a copy of Commission recommendations is
appended as Attachment B).
Recommendation No. 1: Relates to efforts to advise those in
impacted areas of available services. Ms. Erlich then read
the contents of the first recommendation. She further
advised that the program was successful and that both the
state and the BIA have played major roles in addressing the
crisis that resulted from the limited chum run.
Recommendation No. 2: Relates to concern that children in
the area would not be able to enjoy Christmas. While the
Governor did not issue a statewide proclamation, most of the
children enjoyed Christmas to some extent.
Recommendation No. 3: Relates to reporting requirements by
departments responding to the disaster. Ms. Erlich advised
of good response from the division of health and human
services, Dept. of Community and Regional Affairs, and Dept.
of Fish and Game. Entities have kept the Commission advised
of efforts to meet the emergency, address short-term
recommendations, and plan for long-term recommendations.
Recommendation No. 4: Asks that the Governor support the
Dept. of Fish and Game's FY 95 Alaska/Yukon/Kuskokwim
initiative. TOM KRON, Regional Supervisor, Southcentral
Regional Office, Division of Commercial Fisheries Management
and Development, Dept. of Fish and Game, noted support for
the effort within the department budget. He explained that
it includes a list of projects throughout the area to
improve assessment capabilities to respond to such
disasters, understand the resource, and better develop
resources for the future to rebuild stocks. Mr. Kron voiced
a commitment to work in cooperation with local communities
and fishing groups. Senator Jacko said that concern in the
Bethel area appears to be directed to need for sonars. Mr.
Kron acknowledged the importance of sonar assessment
projects on the Kuskokwim, Yukon, and Noatak. Improvement
of sonar capabilities is included within the department
initiative.
Recommendation No. 5: Addresses concern relating to need
for electricity and other utilities in the impacted area.
Ms. Erlich told members that quite a few families are unable
to pay for electricity and oil and would be doing without in
the coldest months. The Commission thus recommended that
the Governor provide funding support for public-owned
utilities in the AYK area. A second portion of the
recommendation calls for loans and other assistance
programs. Ms. Erlich then voiced her understanding that
funding was made available to ten communities in the area of
Bethel. Fifteen projects have been funded to support local
economies.
Recommendation No. 6: Speaks to hiring practices in rural
Alaska and seeks review of state hiring policies and
regulations with the intent to amend them to facilitate and
promote local hire. That is being addressed by separate
agencies and each has its own progression rate.
Senator Kerttula asked if local regional hire had been
discussed with trade unions. Commissioner Blatchford
advised of a meeting of various department and union
representatives. He acknowledged that local hire will not
be realized unless it is a joint effort by unions and the
private sector. Government alone cannot make this happen.
Discussion of training through the Job Corps Center at
Palmer, the CDQ program at the Alaska Skill Center at
Seward, and Alaska Native Employment and Training Council
followed.
End: SFC-94, #50, Side 2
Begin: SFC-94, #52, Side 1
MYRON NANENG, RAVEN Commission Member and Co-chair,
Association of Village Council Presidents, advised that the
only headway made on employment of local residents has been
on federal projects that have an "Indian preference." It
is difficult to achieve local employment on state projects
unless the community lays out criteria of its own in terms
of who can be employed on local equipment. The state should
review local employment. Senator Kerttula reiterated need
for negotiation with unions. Mr. Naneng attested to a
number of local workers who have completed training programs
but cannot utilize their skills because they are the very
last hired, if at all, on village projects. Suzy Erlich
acknowledged the importance of local negotiations. She
added, however, that the state constitution prohibits
insistence on local or regional hire. In response to a
question from Senator Jacko, Mr. Naneng said that AVCP
maintains an updated list of trained workers which is
provided to contractors throughout the region. The same is
true for workers on processors in the fishing industry. Mr.
Naneng advised that canneries used to recruit for local
workers. That is no longer being done.
SENATOR LINCOLN referenced the recent Board of Fisheries
decision not to reduce the catch in Area M to allow for
escapement of chum into the AYK area. She then asked if the
Commission would be addressing that decision. Mr. Myron
said that AVCP is evaluating recommendations and rules and
regulations made by the Board of Fisheries. That evaluation
concluded that major economic impact would be felt in the
AYK area. There will be a reduced fishing effort and
reduced money available as a result of the new rules and
regulations. Mr. Myron stressed particular need to help
rural residents make it through the winter. Rural residents
question whether they should continue to pay for commercial
fishing permits if they will not have the opportunity to
fish during the summer.
Senator Lincoln next referenced a recent decision by Judge
Holland relating to navigable waters and suggested that it
would have major impact on RAVEN Commission recommendations
as well as the whole subsistence issue throughout Alaska.
She then asked if the decision had been evaluated.
Commissioner Blatchford responded negatively, saying that
the Commission had not met since the decision issued. Suzy
Erlich acknowledged Commission interest in the subject and
advised that members had met telephoncially with Cheri
Jacobus from the Office of the Attorney General.
Senator Lincoln voiced support for local hire and stressed
that the state can and should do more to ensure that it is
implemented.
Recommendation No. 7: Relates to evaluation of existing
disaster statutes and proposes addition of new language
pertaining to erosion of community, region, and area support
systems, unavailability of wildlife resources, and
formulation of a fish and wildlife disaster response plan.
TOM KRON, RAVEN Commission Member, and Regional Supervisor,
Southcentral Regional Office, Division of Commercial
Fisheries Management and Development, Dept. of Fish and
Game, advised that fish and wildlife disasters similar to
the AYK chum run have occurred in the past and are likely to
occur in other parts of the state in the future. He
attested to the fact that current statutes do not address
this type of disaster.
Senator Kerttula noted past direct contributions to a
disaster fund. He then asked if the Commission had
discussed statewide contribution to such a fund for
response to a "rather broad array of disasters."
Commissioner Blatchford responded negatively. Much time has
been devoted to discussion of the word "disaster," but no
conclusion has been reached.
Mr. Kron directed attention to pages 5 and 6 of the handout
and noted the Commission's unanimously passed resolution to
the North Pacific Management Council. It speaks to the
great volume of chum salmon caught in federally managed
trawl fisheries in the Gulf of Alaska and Bering Sea, and
the concern that raises for the near-shore fishery. Mr.
Kron further commented on ongoing meetings on the issue.
Recommendation No. 8: Commissioner Blatchford attested to
growing concern that many in the AYK areas are in danger of
losing their fishing permits due to IRS problems.
Recommendation No. 9: DAVID OSTERBACK, RAVEN Commission
Member and Chairman, Sand Point Advisory Committee, voiced
need for increased funding to the Dept. of Fish and Game,
Division of Commercial Fisheries Management and Development,
for specific projects such as stock identification,
enhancement of AYK fisheries, restoration and rehabilitation
of chum salmon stocks, and a study of the Bering Sea
ecosystem. He voiced need for studies and projects that
will help the Board of Fish and department biologists make
better management decisions. Existing data is incomplete.
Senator Lincoln voiced her understanding that management of
the AYK fishery is ten years behind available management
tools. She stressed need for legislative support of this
effort. Mr. Osterback noted that few enhancement projects
have occurred in the AYK area. Efforts are hampered by lack
of sonar equipment and too few biologists. Senator Lincoln
asked if the AYK area is the most neglected in terms of
fishery management. Mr. Osterback voiced his belief that it
is.
Recommendation No. 10: Asks that the Governor support re-
establishment of regional advisory boards with powers to
advise the Board of Fisheries. Mr. Osterback said that past
regional boards were very effective.
Recommendation No. 11: Asks that the Governor fund a
meeting of commercial fishing user groups that impact chum
salmon bound for AYK to discuss and recommend means of
working together. These groups are now expending
substantial sums "fighting each other."
Recommendation No. 12: Asks that the Dept. of Fish and Game
collaborate with the federal government and user groups on
research and regulatory action to ensure protection of chum
salmon stocks. Myron Naneng said that, to date, AYK
regulatory actions adopted by Dept. of Fish and Game and
trawl interception action by the North Pacific Fisheries
Management Council are the only two actions taken.
Recommendation No. 13: Asks that state agencies coordinate
with federal agencies to support and provide technical
assistance to rural cottage industries that support the
local economy such as salmon strips prepared in a
traditional fashion, ivory, fur and bone handicrafts by
Native artists.
Recommendation No. 14: Seeks support for establishment of a
"statewide fisheries management policy" per HB 251
(MANAGEMENT AND ALLOCATION OF FISH).
Recommendation No. 15: Seeks establishment of a statewide
fishery resource disaster relief fund to provide for
maintenance of equipment and working capital for the next
harvest.
Recommendation No. 16: Commissioner Blatchford attested to
illegal activities in the AYK areas and voiced support for
increased funding to the Dept. of Public Safety to monitor
activity and place additional field personnel in the area to
ensure compliance with fish and game laws.
Recommendation No. 17: Commissioner Blatchford attested to
much debate within the Commission over use of local and
traditional knowledge in the management of fish and game
resources statewide.
Recommendation No. 18: Asks that the Governor convene a
preseason salmon summit to address the Alaska market
situation. That is an ongoing concern of the
administration. The Dept. of Commerce and Economic
Development is addressing the issue and recently held an
economic summit on the upcoming 1994 season.
Recommendation No. 19: Asks that the Governor appoint
individuals from areas impacted by the 1993 chum salmon
crash to the Alaska Board of Fisheries.
Commissioner Blatchford said that RAVEN Commission work is
ongoing. The Commission will meet before the end of May to
address a second set of recommendations relating to need to
diversify the economic base in rural Alaska.
Myron Naneng told members that the Association of Village
Council Presidents is attempting to address disaster relief
for the region. To date, work with federal agencies has
produced funds from only the BIA and the Dept. of Commerce
and Economic Development. That is the only funding that has
accrued since last summer's disaster. Reductions in state
staffing are occurring at Bethel where employees cover as
many as 56 villages. Staff reductions will place more of an
economic burden on the region. Mr. Naneng asked that the
committee keep this in mind during budget preparations. He
stressed that residents of the Yukon-Kuskokwim are Alaska
citizens who "are not being given their fair share."
Co-chair Pearce announced that the meeting would be recessed
until approximately 5:00 p.m. for further action on agenda
items.
RECESS
The meeting was recessed at approximately 9:25 a.m.
| Document Name | Date/Time | Subjects |
|---|