Legislature(1997 - 1998)

05/05/1998 09:23 AM Senate FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                           MINUTES                                           
                  SENATE FINANCE COMMITTEE                                   
                         5 May 1998                                          
                          9:23 A.M.                                          
                                                                               
                                                                               
TAPES                                                                      
                                                                             
SFC-98, Tapes 157 & 158, Sides A and B                                         
                                                                               
CALL TO ORDER                                                              
                                                                             
Senator  Bert   Sharp,  Co-chair,  convened  the   meeting  at                 
approximately 9:23 a.m.                                                        
                                                                               
PRESENT                                                                    
                                                                             
In  addition to  Co-chair  Sharp, Senators  Pearce,  Phillips,                 
Donley,  Torgerson, Parnell,  and  Adams were  present at  the                 
meeting.                                                                       
                                                                               
Also   present:   Representative   Jeannette   James;   Angela             
Salerno, Executive  Director, National  Association  Of Social                 
Workers,   Alaska  Chapter;   Catherine   Reardon,   Director,                 
Division  of Occupational  Licensing,  Department of  Commerce                 
and  Economic   Development;   Representative  Mark   Hodgins,                 
Sponsor; Joel Lounsbury,  Staff, Representative  Brian Porter,                 
Sponsor;   Senator  Gary  Wilken;   Danny  Dewitt,   Director,                 
National   Federation   of  Independent   Businesses,   Alaska                 
Chapter;  Ralph Bennett,  Staff, Senator  Robin Taylor;  Wendy                 
Redmond,  Executive   Vice-President,  University   Relations,                 
University  of Alaska;  Carol Carroll,  Director, Division  of                 
Support Services,  Department of  Natural Resources;  aides to                 
committee members and other members of the Legislature.                        
                                                                               
Via  teleconference:   Jane  Angvik,  Director,   Division  of             
Land,  Department  of  Natural  Resources;  Jules  Charleston,                 
Director, Division  of Mining,  Land and Water, Department  of                 
Natural Resources.                                                             
                                                                               
SUMMARY INFORMATION                                                        
                                                                               
SB 340    INCREASE LAND GRANT TO UNIV. OF ALASKA                               
                                                                             
          CSSB 340(FIN) was REPORTED out of committee with                     
          "no recommendation" and attached fiscal notes by                     
          the   Department  of   Natural  Resources   and  the                 
          University of Alaska.                                                
                                                                               
CSHB 206(FIN)am                                                                
           PERS FOR VILLAGE PUBLIC SAFETY OFFICERS                             
                                                                               
          CSHB  206(FIN)am   was  REPORTED  out  of  committee                 
          with  no recommendation  and attached  indeterminate                 
          fiscal note by the Department of Administration.                     
                                                                             
CSHB 313(FIN)                                                                  
          PREVENTATIVE MAINTENANCE REQUIREMENT                                 
                                                                               
          CSHB  313(FIN) was  REPORTED out  of committee  with                 
          a  "do  pass"  recommendation  and  attached  fiscal                 
          note  and  zero fiscal  note  by the  Department  of                 
          Education.                                                           
                                                                               
CSHB 315(FIN)                                                                  
          OPERATING APPROPRIATIONS FOR MAINTENANCE                             
                                                                               
          CSHB  315(FIN) was  REPORTED out  of committee  with                 
          a  "do pass" recommendation  and two new  zero notes                 
          by  the Department  of Education  and the Office  of                 
          the Governor.                                                        
                                                                             
CSSSHB 349(FIN)                                                                
          REGULATION OF SOCIAL WORKERS                                         
                                                                               
          SCS  CSSSHB 349(FIN) was  REPORTED out  of committee                 
          with  no  recommendation  and  fiscal  note  by  the                 
          Department of Commerce and Economic Development.                     
                                                                             
CSHB 473(FIN)                                                                  
          FIRE TRAINING AND CERTIFICATION                                      
                                                                               
          CSHB 473(FIN)  was REPORTED out of committee with no                 
          recommendation  and  attached  fiscal  note  by  the                 
          Department of Public Safety.                                         
                                                                             
SENATE BILL 340                                                              
                                                                               
     "An Act relating to the University of Alaska and                          
     university land, and authorizing the University of                        
     Alaska to select additional state land."                                  
                                                                               
RALPH BENNETT,  STAFF, SENATOR ROBIN  TAYLOR, stated  that the                 
provisions  of SB  340 would  allow the  University of  Alaska                 
to select  250,000 acres  of state land,  subject to  approval                 
by  the   legislature.  Land   approved  for  transfer   would                 
include  interest in  minerals  and oil  and  gas (subject  to                 
certain limitations).  He  noted that land  subject to  a coal                 
lease  or   with  a  pending   lease  application   would  not                 
available for  selection. The university  would bear  the cost                 
of selection,  platting, surveying,  and conveyance.  All land                 
selections  had  to be  made  by  December  31, 2012,  and  20                 
percent of  income derived from  selected land had to  be used                 
at  the campus  closest  to the  income-generating  parcel  or                 
parcels.  All  lands  conveyed  under  the  program  would  be                 
exempt from municipal taxation.                                                
                                                                               
Mr.  Bennett  reported   that  SB  340  was  compatible   with                 
Senator Murkowski's  SB 660,  legislation pending in  Congress                 
that would  convey additional public  lands to the  University                 
of  Alaska.  The  Alaska  system  was  created  under  federal                 
authority  as a  land-grant  institution  to provide  for  the                 
higher-education   requirements    of   Alaska's   people   in                 
perpetuity.  Most colleges  established  under the  land-grant                 
program were  endowed with sizeable  land bases from  which to                 
generate  income to  be used  for operating  purposes.  Unlike                 
most institutions  in the Lower  48, the University  of Alaska                 
did not have  a large population  base and proximity  to other                 
beneficial  support services.  The University  of Alaska  also                 
suffered  from  a smaller  pool  of  alumni and  other  normal                 
sources of  endowment income,  which many institutions  relied                 
on  to  help  support  operations,  especially  subsidies  for                 
teaching positions.  In the  past decade, several  legislators                 
had  introduced   legislation   allowing  the  university   to                 
select additional  lands from  the state.  The purpose  of all                 
such  legislation  had been  to  provide  more lands  for  the                 
university's state-wide system and to provide more income-                     
producing  assets where  monetary resources  were more  scarce                 
and unpredictable.                                                             
                                                                               
Mr.  Bennett  maintained  that   SB  340  would  continue  the                 
effort to  give the  university a larger  and more  productive                 
land-base.  The bill  would  also provide  clear  expectations                 
that  land conveyed  be  used for  the development  of  value-                 
added industries where appropriate.                                            
                                                                               
Mr. Bennett provided a sectional analysis of SB 340:                           
                                                                               
   · Section 1: Findings and purposes section, including                       
     that the University of Alaska should own income-                          
     producing land to provide income for the support of                       
     higher education.                                                         
                                                                               
   · Section 2: Legislative intent language for the                            
     university to encourage the development of in-state,                      
     value-added industries in developing the land conveyed                    
     to it.                                                                    
                                                                               
   · Section 3: Technical amendment, adding that the                           
     provisions grant the Board of Regents the care,                           
     control, and management of other university lands.                        
                                                                               
   · Section 4: Technical amendment to account for the land                    
     conveyed under the bill.                                                  
                                                                               
   · Section 5: A major section adding new subsections                         
     dealing with new land selections:                                         
                                                                               
     · Subsection 14.43.65: Would allow the university to                      
        select 250,000 acres  of state land. The list  of land                 
        proposed  to  be  conveyed  by  the   state  would  be                 
        periodically   submitted  to   the  legislature;   the                 
        legislature  could  approve or  disapprove  the  list.                 
        The section would  also set requirements for  the land                 
        that could be selected.  Transfer of ownership  of the                 
        land to the university  would include the  interest of                 
        the state  in minerals  and to oil  and gas, but  only                 
        related to  land selected  at least  five years  after                 
        the  effective  date  of  the  bill.   The  subsection                 
        describes the  power of the  state to manage  the land                 
        selected but  not  yet conveyed,  and  lists types  of                 
        land that could  not be conveyed,  including  land the                 
        conveyance   of   which   was   determined    by   the                 
        Commissioner of  the Department  of Natural  Resources                 
        not to  be in  the best  interests of  the state.  The                 
        university   would  bear   the  cost   of   selecting,                 
        platting,  surveying,  and  conveying  the  land;  the                 
        state  would  pay  costs  of  recording   patents  and                 
        documents of interim  conveyance. The university  must                 
        make all selections  by December 31, 2012.  Land would                 
        revert to  the  state if  the commissioner  found  the                 
        university  was  not actively  managing  the  land  to                 
        provide  income  on  the  tenth   anniversary  of  the                 
        conveyance.                                                            
                                                                               
     ·  Subsection  14.43.66:  Provides   that  the  Board  of                 
        Regents  must   establish   procedures   substantially                 
        similar to  state procedures  for  mineral leasing  on                 
        the conveyed lands.  The board must prepare  an annual                 
        plan for the  management of  the land and seek  public                 
        comment  on the  plan.  At  least  20 percent  of  the                 
        income derived  from the management  of selected  land                 
        must be used  at the campus  closest to the  land from                 
        which the income was derived.                                          
                                                                               
     ·  Subsection 14.43.67:  A new section in Section  5 that                 
        would  deal with  confidential  records;  Mr.  Bennett                 
        noted  that  the   section  did  not  appear   in  the                 
        committee's copy of the sectional.                                     
                                                                               
     ·  Subsection 14.43.67:  Provides for land conveyed  that                 
        would  be  subject  to  certain  types  of  agreements                 
        (leases,  claims,  permits,  and  so  on);  the  state                 
        would  be entitled  to  receive  the  income  and  the                 
        management  would be  turned  over to  the  university                 
       only after the terms of the agreement expired.                          
                                                                               
     ·  Subsection 14.43.69:  Provides  that before  conveying                 
        or  disposing  of  interest  in  selected  lands,  the                 
        university would be  required to manage the  land in a                 
        manner that  would  permit customary  and  traditional                 
        uses of resources to the maximum extent practical.                     
                                                                               
   · Sections 6 and 7: A new section related to torte                          
     immunity  on unimproved land.  He noted that the  section                 
     did not  appear in the  committee's sectional.  Section 6                 
     was a  renumbered Section 7  and would provide  an income                 
     derived  from  the management  of  selected  land in  the                 
     endowment trust fund.                                                     
                                                                               
   · Section 8: Previously Section 7; exempts the                              
     university lands from municipal taxation.                                 
                                                                               
Senator  Parnell  referred  to  Section  6  related  to  torte                 
immunity  for  personal  injury.   He  noted  that  the  state                 
already  had  some immunity  from  certain  actions  on  state                 
property.  He  asked  whether  the  doctrine  applied  to  the                 
university  and  university  actions;  if  so,  he  questioned                 
making  torte immunity  for  the  university higher  than  the                 
immunity of state property in general.                                         
                                                                               
WENDY    REDMOND,   EXECUTIVE    VICE-PRESIDENT,    UNIVERSITY                 
RELATIONS,  UNIVERSITY OF ALASKA,  answered that the  language                 
in  the  bill   was  exactly  the  language  used   for  state                 
immunity.  She  emphasized  that  the  language  was  not  the                 
university's  preference,  and  was  not  the  torte  immunity                 
language  that had  been in  the bill  previously. She  wanted                 
the  previous   language,  which   took  the  immunity   to  a                 
slightly higher  level. The higher  level was the result  of a                 
previous   section   (14.43.69)    requiring   the   continued                 
provision   of   customary   and  traditional   use   on   all                 
university  land  until  transferred  to a  third  party;  the                 
university  felt it  was important  to have  the higher  level                 
of torte immunity.                                                             
                                                                               
Senator  Parnell asked  whether  the level  requested was  the                 
same  level   as  granted  the   state  of  Alaska   on  other                 
unimproved  land.  Ms. Redmond  replied  yes;  she noted  that                 
the  Resources  Committee  had lifted  the  language  directly                 
out of statute.                                                                
                                                                               
Co-chair  Sharp  asked whether  there  was a  section  dealing                 
with  returning the  land if  it was  not used  appropriately.                 
Ms. Redmond  replied that there  were still a few  sections of                 
the bill  that were troubling  to the  university. One  of the                 
sections  had been  referred to  as the  "use it  or lose  it"                 
clause,  and was found  on page  9, beginning  on line  17 and                 
extending  to page  10,  line 9.  The clause  stipulated  that                 
the university  would have  ten years  to actively manage  the                 
property  for income  or the land  would revert  to the  state                 
of Alaska.                                                                     
                                                                               
Co-chair Sharp  stated concerns  about another item  (page 10,                 
lines  30 to  31  to page  11,  lines 1  and 2).  Ms.  Redmond                 
agreed that  the clause was even  more troubling.  The section                 
was new  and stipulated  that 20  percent of  the income  from                 
the management  of the land had  to go to the closest  campus.                 
She  detailed  that currently,  all  of  the income  from  the                 
land-grant  trust  went  into  the  Natural   Resources  fund,                 
established   in  statute  to   generate  income   to  support                 
resource  development  in  Alaska.  The  fund  was  inflation-                 
proofed  and  the   university  spent  the  earnings   through                 
grants;  approximately  $3.7 million  had  been  given out  in                 
the current year.                                                              
                                                                               
Ms. Redmond  continued  that the language  would target  money                 
to  the  campus  closest to  where  the  money  was  generated                 
regardless  of  need,  in  addition  to  diverting  the  money                 
before  it  got  to the  endowment.  She  did  not  think  the                 
clause  was in the  best interest  of the  university and  did                 
not accomplish  what the  trust fund was  set up to  do, which                 
was to support resource development in the state.                              
                                                                               
Senator Torgerson  queried language  that had previously  been                 
suggested  to address  the  issue.  Ms. Redmond  replied  that                 
she had  suggested broadening  the language  to use the  money                 
within  the  region and  linking  it  to  the purpose  of  the                 
fund.                                                                          
                                                                               
Senator  Torgerson asked  how she would  define "region."  Ms.                 
Redmond  did not  have  the answer.  She conjectured  that  it                 
would be broader than an election district.                                    
                                                                               
Senator  Torgerson believed  Senator  Taylor  had intended  to                 
work on the  language. Mr. Bennett  replied that a  work draft                 
had  been prepared  dealing only  with  the 20-percent  issue;                 
it did  not address  the problem  of  broadening the  regions.                 
He had  not been instructed  to bring  the changes before  the                 
committee and did not have suggested changes.                                  
                                                                               
CAROL  CARROLL,   DIRECTOR,  DIVISION  OF  SUPPORT   SERVICES,                 
DEPARTMENT  OF  NATURAL  RESOURCES, wanted  the  committee  to                 
have the department's opinion of the bill.                                     
                                                                               
JANE  ANGVIK,  DIRECTOR,  DIVISION   OF  LAND,  DEPARTMENT  OF                 
NATURAL  RESOURCES (via  teleconference),  testified that  the                 
department opposed the bill for seven reasons:                                 
                                                                               
   1. While the state owned a great deal of acreage, only a                    
     very  small  amount of  the  land produced  revenue.  The                 
     university   would    most   likely   select   the   most                 
     productive  land,   which  would  remove  it  from  state                 
     management  and  decrease revenue  to  the general  fund;                 
     currently,  85  percent  of  all  general-fund   revenues                 
     came from state-owned land.                                               
                                                                               
   2. It would be difficult to find 250,000 acres of                           
     suitable  state lands  for the university  to select.  In                 
     addition,   there  would   be  a   large  public   outcry                 
     resulting  from  the transfer  of specific  parcels.  She                 
     noted   that  the   department  had   witnessed  such   a                 
     response  when it  had tried  to reconstruct  the  Mental                 
     Health Trust.                                                             
                                                                               
   3. It would be costly to transfer titles for the amount                     
     of land;  it could  cost over $800,000  per year  for ten                 
     years to convey the amount of land to the university.                     
                                                                               
   4. The municipalities would be in competition with the                      
     university  for the same land.  The state currently  owed                 
     the   municipalities   over  600,000   acres  under   the                 
     municipal-entitlement   program.  There  were  a  limited                 
     amount   of  revenue-generating   lands  that   both  the                 
     municipalities  and  the  university  wanted.  While  the                 
     legislation  would  protect   existing  selections,  most                 
     municipalities   found  it  necessary  to   modify  their                 
     collections  over time  as their  priorities changed  and                 
     land-ownership    patterns   evolved   due   to   federal                 
     conveyances  to the  state  and to  Alaska Native  Claims                 
     Settlement   Act   (ANCSA)   corporations.   Furthermore,                 
     about  one-half of  Alaska was  in unorganized  boroughs.                 
     When  those  areas organized,  the  state  would have  an                 
     obligation  to convey 10 percent  of certain state  lands                 
     within  the municipal  boundaries, but  much of the  best                 
     land might have already gone to the university.                           
                                                                               
   5. Timber harvesting could be negatively impacted by the                    
     bill. The  university would  most likely select  the most                 
     productive  timber  lands,  reducing the  state's  timber                 
     base   used  to   calculate  the   sustained  yield   and                 
     limiting   the  state's  current  efforts   to  establish                 
     timber   sales    that   supported   local    value-added                 
     processing.  As  a  trust, the  university  would  manage                 
     its  lands for  maximizing revenue,  and therefore  would                 
     sell timber  for export. She  argued that the  Department                 
     of Natural  Resource's ability  to offer sales  for local                 
     value-added   processing  would   be  decreased   if  the                 
     university selected timber lands.                                         
                                                                               
   6. The university would be exempt from most state land                      
     laws  adopted by the  legislature  to protect the  public                 
     interest.   For  example,   Title  38  requirements   for                 
     public  notice  and the  state's  best-interest  findings                 
     process  would not  apply to  the  university lands.  The                 
     university   forest  operations   were  not  subject   to                 
     public  review for  the forest  land-use  plan and  five-                 
     year  schedule.  Also, university  land  was not  subject                 
     multiple-use   management  requirements   and  the  lands                 
     would be exempt from conformance in CNR area plans.                       
                                                                               
   7. The bill lacked a method by which to resolve                             
     disagreements  between DNR  and the university  regarding                 
     what  lands  should  be  submitted  to  the  legislature.                 
     Without  supervision,  disagreements could  result in  no                 
     land  list being submitted  or the  state and  university                 
     could  end  up  in costly  litigation.  She  thought  the                 
     bill  needed a provision  to allow  the governor  to make                 
     the  final  decision  and submit  the  land list  to  the                 
     legislature  if there  was disagreement  between DNR  and                 
     the  university. Senate  Bill  340 would  require DNR  to                 
     re-enter   and  re-convey  title  back  to   CNR  if  the                 
     university  was not managing  lands to generate  revenue.                 
     She  argued that  the provision  was unreasonable,  since                 
     most state  land did not  generate revenue.  Furthermore,                 
     enforcement  would  be costly  and was  likely to  result                 
     in  litigation.  The  department   recommended  that  the                 
     provision be deleted.                                                     
                                                                               
Ms. Angvik  referred to amendments  that had been  recommended                 
and conveyed  to the  committee  through a  May 1 letter.  She                 
noted that  the director of the  Division of Mining,  Land and                 
Water was  available to answer  questions about the  effect of                 
the bill on mining in Alaska.                                                  
                                                                               
Senator Phillips  reported that  the members did not  have the                 
letter with  the proposed  amendments.  Ms. Angvik offered  to                 
get a copy to the committee.                                                   
                                                                               
JULES  CHARLESTON,  DIRECTOR,  DIVISION  OF MINING,  LAND  AND                 
WATER,  DEPARTMENT   OF  NATURAL   RESOURCES  (testified   via                 
teleconference),   stated  that   SB  340   (Version  F)   had                 
significant  potential  to  damage the  enthusiasm  of  mining                 
companies  to  invest in  the  mineral  wealth of  Alaska.  He                 
reported  that for  the past  two years,  the mining  industry                 
had created  value totaling  over $1  billion. He referred  to                 
the  "we  are  open  for  business"   message  from  both  the                 
governor and  the legislature. He  noted that DNR  anticipated                 
about $1.7  million in  direct revenue  to the state  treasury                 
during FY  99 from mineral  rents, royalties, and  application                 
and   administrative   fees   from   state-owned,    locatable                 
minerals.  The department  projected a  total of about  50,000                 
mineral  properties   and  about   1,000  ownerships   (mining                 
claims, mining  leases, mill-site  leases, prospecting  sites,                 
and  prospecting permits);  about  1 million  acres of  state-                 
owned or state-collected land would be encumbered.                             
                                                                               
Mr. Charleston  emphasized that  the version as drafted  would                 
create  financial  and  legal  uncertainties  for  the  mining                 
industry  similar  to  those  experienced  during  the  Mental                 
Health Trust  lands litigation,  which  would not be  resolved                 
until  after  2012.  He  pointed  out  that  the  language  in                 
Section  5  of  the  bill  (dealing  with  minerals  on  state                 
properties)    was   difficult    to   understand;    Sections                 
14.40.365(a)(3)  and  (4)  appeared  to  exempt  only  certain                 
state  lands  associated   with  state  oil,   gas,  and  coal                 
leases.  The language  of Section  (a)(4),  line 5  on page  5                 
and lines  3 through  7 stipulated that  the university  could                 
select  any of  approximately 40,000  mining  claims, as  well                 
as  any  of about  5,000  prospecting  sites  (covering  about                 
650,000  acres). He referred  to another  kind of  prospecting                 
site that  the state  did not  have at the  present time,  but                 
could  in the future.  The  university could  also select  any                 
of  approximately 100  mineral  leases covering  abut  100,000                 
acres, or  any of five existing  or pending mill-site  leases.                 
In addition,  the university  could select  any land  that was                 
slated  for both  intensive  and extensive  mineral  inventory                 
for  the  Division  of  Geological  and  Geophysical  Surveys,                 
thereby  excluding the  public and  the industry  from a  fair                 
chance to  locate mining  claims and  prospecting sites  under                 
existing Alaska laws covering mines and mining.                                
                                                                               
Mr.  Charleston  continued  that  Section  14.40.365(b)(1)  on                 
page  5, lines  19 to  20  reaffirmed that  state-owned  coal,                 
ores, minerals,  geothermal  resources, and  fossils would  be                 
under   the  exclusive   ownership  and   management  of   the                 
university  for  the  sole  benefit   of  the  university.  He                 
believed  there  would  be  substantive  questions  about  who                 
must  deal   with  whom   for  continued   operation   of  new                 
development  of mineral  property  (not in  the Mental  Health                 
Trust)  to  the  extent  that  SB  340  authorized  university                 
selection  of  mineral  properties  other  than  certain  oil,                 
gas,  and  coal  leases.  He  listed  properties  the  version                 
would  permit the  university to  select,  including parts  of                 
Fort Knox  Mine, Golden  Zone Mine, Red  Dog Mine, True  North                 
Mine  at  Fairbanks,  and  any  of more  than  200  small-  or                 
medium-sized placer mines and claims.                                          
                                                                               
Mr.  Charleston   argued  that   if  SB  340  authorized   the                 
selection  of  mineral  properties  including  oil,  gas,  and                 
coal (which  were not  expressly excluded),  the  requirements                 
of  Section   6(i)  of  the   Alaska  Statehood  Act   in  its                 
reversionary   provisions   as  well   as   revenues  to   the                 
permanent  fund  would raise  substantial  legal  issues  that                 
could  further delay  any mineral  development  on state  land                 
that  the university  selected.  He  claimed the  stigma  that                 
influenced   adverse  investment   by  the  mineral   industry                 
during   the  Mental   Health   Trust  litigation   would   be                 
reinstituted.  In  addition,  there  could  be  a  handle  for                 
litigation  that was otherwise  prudently and  environmentally                 
responsible  when there was opposition  to some oil,  gas, and                 
coal projects.                                                                 
                                                                               
Mr.  Charleston  maintained  that questions  could  be  raised                 
about  severing  the  surface  from  the  sub-surface  mineral                 
estate.  In addition,  there  would  be adverse  impacts  from                 
added  costs resulting  from fees  the  university would  have                 
to charge  in order to avoid  relinquishment of the  property,                 
even if  minerals were not selectable  by the university.  The                 
fees  could  stop marginally  economical  projects  and  cause                 
delay   for   others    waiting   for   better    world-market                 
conditions;  the end result  could be the  loss of local  jobs                 
and otherwise prudent and timely economic development.                         
                                                                               
Mr.  Charleston   questioned  whether  meeting   the  proposed                 
requirements  for timely  economic development  of  university                 
lands   could  cause   other  economic   uses   such  as   the                 
subdivision  for  homes, commercial  lodges,  business  sites,                 
or  recreational   cabins,  which   could  then  become   non-                 
conforming  land use  that  the mineral  property  development                 
had to buy.  He feared there  could be other additional  costs                 
to  an  otherwise  prudent  development.   The  mineral  lease                 
could  last  as  long  as 55  years;  the  average  lease  was                 
currently  about 20  years.  Mineral leases  had  a right  for                 
renewal  when other  conditions were  met. He  asked what  the                 
university  would gain  from selecting  mineral properties  if                 
the  existing lease  income  continued to  go  to the  general                 
treasury and permanent fund for the life of the mine.                          
                                                                               
Mr. Charleston  noted that  under Alaska  mining law,  mineral                 
property owners  had the exclusive  right for regular  renewal                 
of property  rights as  long as they  otherwise complied  with                 
the law;  under SB 340,  he questioned  the period the  annual                 
rental   fees  would  come   to  the   general  treasury.   He                 
questioned  whether the  university could  select the  Red Dog                 
mine  loading facilities  on  a DNR  lease or  select a  small                 
tract across  the new road to  Fort Knox mine and  then charge                 
a  trespass  fee and  reduce  income.  He worried  that  there                 
could be  charges against Fort  Knox mine vehicles  and reduce                 
income to  the Mental Health Trust  or to the Fairbanks  North                 
Star Borough.  He did not think  the bill answered any  of his                 
questions.  He pointed  out that unanswered  questions  in the                 
mineral industry automatically meant a delay.                                  
                                                                               
Mr.  Charleston concluded  that  SB 340  would  send a  strong                 
message  to the  mineral industry  that  until sometime  after                 
the year  2012, state  mineral property  should be  considered                 
as   having   significant    investment   risk    because   of                 
uncertainty  about  who the  landlord  would  be,  prospective                 
litigation   over  deposits  to   the  general  treasury   and                 
permanent  fund,  and adverse  impact  similar  to the  Mental                 
Health  Trust  litigation.  He strongly  recommended  that  SB
340 be amended  by the Senate  Finance Committee to  expressly                 
exclude  selection   of  any   state  minerals:  coals,   ore,                 
minerals,  and other materials,  as well  as oil and  gas that                 
were presently  in mining  claims,  mineral leases,  mill-site                 
leases,  or other mineral  property rights  under Alaska  law,                 
the  Alaska Statehood  Act, and  the Alaska  Constitution.  He                 
also  recommended that  land  selected  by the  state for  its                 
mineral  value  be excluded,  whether  encumbered  or not,  as                 
well  as land  that  the  legislature  had authorized  to  the                 
Division  of  Geological  and Geophysical  Survey  to  conduct                 
mineral-related  studies  as  a result  of  suspected  mineral                 
potential.                                                                     
                                                                               
SB 340 was SET ASIDE until later in the meeting.                               
                                                                               
HOUSE BILL 349                                                               
                                                                               
     "An  Act  prohibiting   the  use  of  the  title  'social                 
     worker'  without a license;  relating to social  workers,                 
     licensure  of social workers,  and the Board of  Clinical                 
     Social  Work Examiners;  and providing  for an  effective                 
     date."                                                                    
                                                                               
REPRESENTATIVE  JEANNETTE JAMES,  SPONSOR, presented  the bill                 
to  the  committee,  explaining  that  the  legislation  would                 
provide  two  additional   levels  of  licensing   for  social                 
workers in  the state. Currently,  the law required  the level                 
of Board  of Clinical  Social Work  Examiners, which  required                 
a doctorate  degree in  clinical social  work. The two  levels                 
added  by HB  349 would  be a  bachelor's degree  level and  a                 
master's degree level of social work.                                          
                                                                               
Representative  James  maintained   that  she  had  filed  the                 
legislation  because she believed  some of the social  workers                 
working for  the state lacked  credibility. She believed  that                 
licensing  would  help  avoid the  lack.  She  thought  social                 
workers  made   important  decisions  related   to  vulnerable                 
children  and adults  that could  affect  the individuals  for                 
the  rest of  their lives  and she  wanted  social workers  to                 
have the qualifications to make those decisions.                               
                                                                               
Representative  James referred  to a  handout indicating  that                 
the  state   had  179   social-work  positions;   70   of  the                 
positions were  filled by individuals  with degrees  in social                 
work.  Some of  the individuals  in  the positions  had  other                 
bachelor and  graduate degrees and  18 had no degrees  at all.                 
She noted  that HB 349 would  not become effective  until July                 
1, 2000  because it  was necessary  to negotiate  with all  of                 
the affected  parties in order  to get a piece of  legislation                 
without  a huge  fiscal  note and  that would  cooperate  with                 
the Department  of Health  and Social  Services (DHSS),  which                 
housed   most  of  the   social-work   positions.  After   the                 
effective  date,  all  people  currently   working  as  social                 
workers  in their  original position  would  be exempted.  The                 
person would  not have  to have a  license until they  changed                 
positions  or employers.  The bill  also had  a provision  for                 
those  with other  bachelor's or  graduate  degrees; it  would                 
allow  two years  for those  people  to prepare  for and  pass                 
the examination to get a license for social work.                              
                                                                               
Representative  James  concluded   that  the  legislation  was                 
important  to  protect the  public  and  to make  sure  people                 
making   decisions   for  vulnerable   Alaskans   were   fully                 
qualified.  In  addition,  consumers would  have  recourse  in                 
case a  mistake was  made by  a social worker  who was  either                 
not qualified  or who behaved  unethically. The license  could                 
be challenged;  without  a license,  the  individual could  no                 
longer do social work.                                                         
                                                                               
Senator Adams  asked how  the provision  would apply  in rural                 
Alaska,  where  there  were people  who  qualified  as  social                 
workers,  even  though  they  had not  received  a  degree  in                 
social  work.  He  believed   such  a  person  could  be  more                 
qualified   than   a  person   who   had  gone   to   college.                 
Representative  James replied that  there had been  discussion                 
about the  issue related  to rural areas.  She explained  that                 
people  currently doing  social  work would  be exempted  from                 
the  law.  However,   the  social  worker's  association   was                 
planning to  provide education in  rural areas so  that people                 
could  be brought  up to  speed. She  stressed  that the  bill                 
would only  affect people who came  into the field  after July                 
2000.  She added  that DHSS  had been  setting  up an  academy                 
through  the  University of  Alaska  so  that there  would  be                 
more training  available. She agreed  that workers  could have                 
much insight  and cultural  knowledge,  but she believed  they                 
would welcome  the opportunity  for  additional education  and                 
licensing,  which  could provide  pride  in  the job  done  as                 
well as additional credibility.                                                
                                                                               
Senator   Torgerson  asked   whether   board  meetings   would                 
increase  from  one  to two  per  year.  Representative  James                 
replied  that the  licensing board  would  extend the  current                 
process for  clinical social workers  into the bachelor's  and                 
master's  degrees. The  activity the board  would cover  would                 
be  enlarged. She  referred  to  changed licensing  rates  and                 
the  fact that  there  would be  less administration  and  the                 
need for one board.                                                            
                                                                               
Senator  Torgerson pointed  to page  3, lines  14 through  17.                 
He asked where  in the state a  person could get training  for                 
professional    ethics    and    cross-cultural     education.                 
Representative   James   replied   that   the   training   was                 
currently  being  provided  by  the  National  Association  of                 
Social  Workers  for licensed  clinical  social  workers.  The                 
training  was available  nationally  as  well  as adapted  for                 
local  education. She  stressed  that the  requirement for  45                 
hours of  continuing education  every two  years to renew  the                 
license was  an important part  of the licensing process.  The                 
training was  being organized and  would be available  through                 
long-distance learning as well as in classrooms.                               
                                                                               
Senator Torgerson  referred to the  top of page 3,  related to                 
the  board  having   the  right  to  examine   a  person  with                 
physical or  mental problems to  obtain credible evidence.  He                 
questioned  whether  the provision  would  overstep the  power                 
of  a board.  He wondered  who  would make  the  determination                 
regarding  credible  evidence.  Representative  James  replied                 
that the  professionals in the  field could recognize  whether                 
the  evidence was  credible.  She reported  that  she had  not                 
heard  fears about  the  subject from  anyone  working in  the                 
field, including those who were not licensed.                                  
                                                                               
Senator Torgerson  did not recall  any other board  having the                 
described  powers. He  believed  the Department  of Law  (DOL)                 
would  end  up defending  board  actions  against  some  claim                 
about  a mental  problem.  He stated  concerns  about  opening                 
the state  to lawsuits through  board actions.  Representative                 
James  replied that  the  issue had  not brought  up  concerns                 
throughout   all   the  negotiations   conducted   about   the                 
subject.   She  referred   to   a  representative   from   the                 
association   of  social   workers  who   possibly  had   more                 
information.                                                                   
                                                                               
Senator  Adams stated  concerns about  the legislation,  which                 
reminded  him of a  limited-entry permit  system. He  referred                 
to  items  related   to  social  workers  that   were  in  the                 
operating  budget  in conference  committee.  He  referred  to                 
Section  33  of the  bill  and  the 2000  effective  date.  He                 
asked  whether  people  without  licenses could  be  hired  up                 
until the  effective date. Representative  James responded  in                 
the affirmative.  She detailed that  the provision was  in the                 
bill because  DHSS was in the  process of filling  social-work                 
positions  and did  not have  time  to change  the system  and                 
job  description  until  the  proposed   effective  date.  She                 
emphasized  that the department  would  be working toward  the                 
goal and she did not think there would be a problem.                           
                                                                               
Senator  Adams asked  whether a  person without  a degree  and                 
without a  license who was hired  as a social worker  would be                 
laid off  on July 1, 2000.  Representative James replied  that                 
the  person  would  not  be  laid  off.  She  noted  that  she                 
supported  limited  entry  when  it  came to  the  psyches  of                 
vulnerable children and adults.                                                
                                                                               
Senator Phillips  pointed  out that the  bill had been  around                 
since  1975  and  that the  issues  had  been  raised  before.                 
Representative   James  acknowledged   that  there   had  been                 
difficulties  and that  there  had been  times  when she  felt                 
the goal could  not be reached.  She stated that the  bill was                 
crafted  carefully  to  get  all  the  interested  parties  to                 
agree and to keep the fiscal note low.                                         
                                                                               
ANGELA SALERNO,  EXECUTIVE DIRECTOR,  NATIONAL ASSOCIATION  OF                 
SOCIAL  WORKERS, ALASKA  CHAPTER,  testified that  HB 349  was                 
about  consumer  protection, accountability,   and public  and                 
private  social services.  She explained  that the people  who                 
come  into   contact  with   social  workers   in  the   state                 
(primarily  the clients of  the Division  of Family and  Youth                 
Services  [DFYS] in  DHSS) did  not  have a  choice about  who                 
provided  child protective  services.  She  believed the  bill                 
would ensure  that social  workers were  well qualified  to do                 
their job.                                                                     
                                                                               
Ms.  Salerno  addressed  confusions  about  provisions  of  HB
349,  beginning  with Senator  Adams's  concern  about  social                 
work in  the rural areas, especially  within tribal  entities.                 
She  maintained  that the  bill  was a  title-protection  act,                 
not  a practice-protection  act;  the  bill would  not  define                 
what  social work  was and  prevent  a person  from doing  the                 
work  without  a license.  The  bill  would stipulate  that  a                 
person  could  not call  themselves  a  social  worker  unless                 
they  had  a  license.  In  other  words,   those  individuals                 
currently  doing  social work  or  social services  without  a                 
degree  would  not be  impacted  by  the  bill at  all.  Those                 
individuals  could  continue  to  doing  their  work  if  they                 
chose  to  practice   under  the  title  "social   work."  She                 
referred to  Tlingit and Haida  in Juneau as the sole  example                 
of a tribal  entity that used  the title "social worker"  as a                 
job title.  Tlingit  and Haida  felt confident  that it  would                 
either  hire professional  social  workers or  change the  job                 
title if necessary.                                                            
                                                                               
Ms.  Salerno  noted past  confusions  about  exemption  versus                 
"grandparenting"  a  measure in.  She  explained  that no  one                 
would  automatically  get  a  license.  Individuals  currently                 
working  under the  title who did  not hold  the degree  would                 
be exempt  and would never  need to get  the license,  as long                 
as they  remained at  the job  they were  in. The  individuals                 
would  have the  option to  get the  license if  they had  the                 
background, education, and experience to take the test.                        
                                                                               
Ms.  Salerno  referred  to  concerns  about  where  the  state                 
would get  all the social  workers it  needed. She noted  that                 
Representative   James  had   mentioned   the  Child   Welfare                 
Academy,  a  new  partnership  being   developed  between  the                 
University  of Alaska  and DFYS.  The program  would create  a                 
"career  ladder"  into  social  work with  the  assistance  of                 
federal  dollars  that  would allow  the  university  to  hire                 
faculty  and  develop curriculum  to  bring  Child  Protective                 
Services into  the classroom and  create the career  ladder to                 
social work.                                                                   
                                                                               
Ms. Salerno  addressed  questions asked  by Senator  Torgerson                 
related  to  increasing  the number  of  board  meetings.  She                 
explained that  part of the work  that formed HB 349  was done                 
by  a  task  force  developed  in  response  to  an  audit  of                 
statutes  related to  social  work, psychology,  and  marriage                 
and family  therapy. One of the  areas the auditors  cited was                 
the need  for additional  board meetings.  She noted  that one                 
of the board meetings was often teleconferenced.                               
                                                                               
Ms. Salerno  responded to concerns  about where workers  would                 
obtain  continuing  education  in social  work.  She  believed                 
that  staying  current  through  continuing  education  was  a                 
very  important  part  of being  a  professional.  She  stated                 
that  there  were  many ways  to  have  access  to  continuing                 
education  in  Alaska;  opportunities   were  fewer  in  rural                 
areas,  but  still   existed.  The  National   Association  of                 
Social Workers  had begun to  provide training statewide.  She                 
highlighted  distance education,  including  the use of  video                 
and  audio  tapes. She  did  not  think  anyone in  the  state                 
would be barred from getting continuing education.                             
                                                                               
Ms.  Salerno  addressed   concerns  about  the   physical  and                 
mental  exam described  at the  top  of page  3. She  asserted                 
that two  forces had  brought the  issue to  the attention  of                 
the task force working on the bill.                                            
                                                                               
[SFC-98, Tape 157, Side B]                                                     
                                                                               
Senator  Torgerson  noted  concerns  that DOL  would  have  to                 
become  involved,  resulting  in  a  potentially  high  fiscal                 
impact. The  individuals would be  asked to pay $319  in fees,                 
which  they were  not currently  paying,  and to  pay to  have                 
tests  done.   Ms.  Salerno  responded  that the  Social  Work                 
Board was charged to act in an ethical manner.                                 
                                                                               
Senator Torgerson  stated  that he had  not seen other  boards                 
being subjected to the issue.                                                  
                                                                               
Senator  Adams   queried  Sections  26  and  27   (related  to                 
repealers).  Ms.   Salerno  replied  that  Section   26  would                 
repeal  permission  to use  the title  "social  worker" if  an                 
individual  was not  licensed. When  the  current statute  was                 
passed ten  years prior  to license  clinical social  workers,                 
nearly  everyone was  exempt; the  section  would repeal  that                 
global  exemption.  Section  27  was  a  repealer  related  to                 
qualifications.                                                                
                                                                               
CATHERINE   REARDON,   DIRECTOR,  DIVISION   OF   OCCUPATIONAL                 
LICENSING,  DEPARTMENT OF  COMMERCE  AND ECONOMIC  DEVELOPMENT                 
(DCED),  addressed concerns  by Senator  Torgerson related  to                 
the involvement  of the DOL because  of an order to  submit to                 
examination.  She explained that  DCED would be involved;  the                 
Division of  Occupational Licensing  staff would initiate  the                 
order, rather  than the  board. The division  would go  to DOL                 
and   show  credible   evidence   why  the   examination   was                 
warranted.  The  procedure  would  be  similar  to  filing  an                 
accusation that  someone had violated  any licensing  law; DOL                 
would review  the evidence, and  agree or disagree  with going                 
forward  with charging  an individual.  The Department  of Law                 
would  act  as the  check  on  the division's  order  for  the                 
examination.  She   explained  that  the  reason   was  partly                 
because DOL  would have to defend  the state if there  was not                 
credible  evidence. She  stated that a  person could  possibly                 
refuse  to  submit  to  testing,  and  there  could  be  legal                 
action on both sides.                                                          
                                                                               
Ms. Reardon  detailed that the  item was not reflected  in the                 
fiscal   note  because   the  division   had  a   reimbursable                 
services agreement  (RSA) with DOL  to provide a  given amount                 
of  legal   services  to   the  division;   the  fiscal   note                 
anticipated  that  the necessary  legal  services  would  come                 
out of that.                                                                   
                                                                               
Senator  Torgerson  was concerned  that  someone  would  claim                 
that  an  individual  had  a  mental   problem  and  then  the                 
individual  would  have  to  have an  examination.  He  had  a                 
problem  with  the  way  the  measure  was  worded.  He  asked                 
whether  any  other  board  had the  authority  to  require  a                 
mental  examination for  occupational  licensing. Ms.  Reardon                 
responded  that  there  was   at  least  one  other  board,  a                 
medical board  and perhaps another  board. She stated  that HB
349   would  not   be  the   first  granting   the   described                 
authority.                                                                     
                                                                               
Senator Torgerson  asked whether  she had  a problem  with the                 
provision  in the  bill. Ms.  Reardon responded  that she  did                 
not  have  a  problem  with  the  provision,  because  it  was                 
difficult  to  charge  a person  with  incompetence  and  take                 
away  their   license   if  there  was   not  a   professional                 
assessment  of   the  person.  The  section  related   to  the                 
process  of evidence-gathering  necessary  before taking  away                 
a license.  An incapacitated  person might  not submit  to the                 
examination  and the  state  could not  prove  its claim.  She                 
acknowledged  fear that the state  could abuse the  power, but                 
she  felt that  credible evidence  would  be gathered  through                 
witnesses  and other means  before a  person would be  accused                 
of having a problem.                                                           
                                                                               
Senator  Torgerson noted  that the  board  made the  decision.                 
He  asked whether  the  board reported  to  the division.  Ms.                 
Reardon  replied that  the function  was listed  as a duty  of                 
the board.  Her understanding  was that  generally it  was the                 
duty  of boards  to investigate  and  take  action. The  board                 
delegated  the investigation  to  the division  staff  because                 
the board  had to  ultimately sit  in judgment  in the  cases.                 
The   division   rather   than   the    board   received   and                 
investigated  complaints   against  people.  She   anticipated                 
that  the   division  would  have   to  gather  the   credible                 
evidence, get  it through the  attorney general's  office, and                 
bring it  to the board.  The division  would only bring  cases                 
before the board that met the legal test.                                      
                                                                               
Senator Torgerson  stated that he  did not like the  provision                 
and  proposed  an amendment  to  take  it out.  The  amendment                 
would be to  delete the top of  page 3, lines 1 through  3. He                 
did  not  want  the  option  to  be   available  based  on  no                 
explanation  of "credible  evidence"  or "reasonable  physical                 
or mental examination."                                                        
                                                                               
Senator Torgerson MOVED conceptual Amendment 1:                                
                                                                               
     Delete lines 1 through 3 on page 3.                                       
                                                                               
There being no OBJECTION, Amendment 1 was adopted.                             
                                                                               
Senator Torgerson  MOVED to REPORT SCS CSSSHB  349(FIN) out of                 
committee   with  individual   recommendations  and   attached                 
fiscal note. There being no objection, it was so ordered.                      
                                                                               
SCS  CSSSHB 349(FIN)  was REPORTED  out of  committee with  no                 
recommendation and  fiscal note by the Department  of Commerce                 
and Economic Development.                                                      
                                                                               
HOUSE BILL 473                                                               
                                                                               
     "An Act  relating to training  and certification  of fire                 
     services  personnel;  relating to  certification of  fire                 
     services   training  programs;   and  providing   for  an                 
     effective date."                                                          
                                                                               
REPRESENTATIVE  MARK HODGINS,  SPONSOR, reported  that HB  473                 
would  set up  a fire  safety  council similar  to the  police                 
safety council. There had been  communication problems between                 
the firefighting association and  the fire chiefs association.                 
He noted  that there had  been dramatic changes,  particularly                 
related to powers. He highlighted  page 2, line 27, which read                 
"the  council may"  instead of  "the  council shall."  Another                 
important  change   was  on  page  3,  line   22,  related  to                 
certification  being   optional.  He  stated  that   the  most                 
important change  was on page  4, Section 3,  stipulating that                 
the act would take effect July 1, 2000.                                        
                                                                               
Representative Hodgins informed  the committee that the Alaska                 
Fire Chiefs  Association brought  the proposal  to him  and he                 
had explained to  them that there could be no  fiscal notes in                 
order  for  it  to  work.  The  association  wanted  the  2000                 
effective date as it would give  them two years to get all the                 
rural  fire  departments  together and  to  develop  standards                 
everyone  could  agree upon.  The  main  emphasis was  that  a                 
Firefighter I  designation in  Bethel was not  necessarily the                 
same designation  in Anchorage,  Fairbanks,  Kenai, or  any of                 
the other place. There was a desire for standardization.                       
                                                                               
Representative Hodgins reported that  during the course of the                 
committee  process, it  was pointed  out that  duty aides  had                 
standards, but  not firefighters. Testimony had  revealed that                 
there  was  approximately  one   death  every  eight  days  on                 
average. Most of  the rural fire departments  had been brought                 
on board;  some saw the bill  as more big government.  An "opt                 
out" option had  been put in. In addition,  the membership was                 
brought  more in line  with the  firefighters association  and                 
fire chiefs association.                                                       
                                                                               
Senator Torgerson pointed  to the bottom of  page 3, regarding                 
the fire service  personnel fund. He asked what  the fund was.                 
Representative Hodgins  replied that there  had to be  a state                 
mechanism to  funnel the  dollars in order  to pay  for needed                 
materials such as  books and costs such as  certification. The                 
funds would be appropriated through  the legislature under the                 
Department of  Public Safety. The department  had been adamant                 
about not taking  on an extra spending liability.  He stressed                 
that  he had  clearly told  the firefighters  that they  would                 
have to come up with their own  funding, which would enter the                 
general   fund  to  be   disbursed  as   appropriate   by  the                 
legislature.                                                                   
                                                                               
Senator Adams  asked whether  Legislative Finance  agreed that                 
the  operation could  be funded  through statutory  designated                 
receipts. Representative Hodgins  replied that the process was                 
set up along the lines of the  police standards council, which                 
had been in existence for many years.                                          
                                                                               
Senator Adams asked to have the issue checked out.                             
                                                                               
Co-chair   Sharp  listed   people   who   were  available   by                 
teleconference  and  who were  in  favor of  the  legislation,                 
including Fire Chief Jason Elson and Scott Walden from Kenai.                  
                                                                               
Senator  Torgerson  MOVED  to  REPORT  CSHB  473(FIN)  out  of                 
committee  with  individual recommendations  and  accompanying                 
fiscal note. There being no OBJECTION, it was so ordered.                      
                                                                               
CSHB  473(FIN)   was  REPORTED   out  of  committee   with  no                 
recommendation and  attached fiscal note by  the Department of                 
Public Safety.                                                                 
                                                                               
HOUSE BILL 206                                                               
                                                                               
     "An Act relating to credit under the Public Employees'                    
     Retirement System for service as a village public                         
     safety officer."                                                          
                                                                               
JOEL   LOUNSBURY,   STAFF,   REPRESENTATIVE    BRIAN   PORTER,                 
SPONSOR,  informed the  committee that  HB 206  would allow  a                 
village  public  safety  officer  (VPSO)  to  get  credit  for                 
service through  the state Public  Employee Retirement  System                 
(PERS).  He  noted   that  throughout  the  state,   the  VPSO                 
program  had  provided  an  important   means  of  maintaining                 
peace and  harmony in  the villages.  Most of the  individuals                 
serving had  not been  covered by a  retirement program;  some                 
former   officers    were   currently   working    for   other                 
organizations  that were  covered by the  state PERS  program.                 
The  work  experience  obtained  by participating  in  a  VPSO                 
program  had  proven  to be  an  invaluable  asset.  The  bill                 
would allow  the individuals to  obtain retirement  credit for                 
service   rendered   under   the   VPSO    program.   Eligible                 
participants  would receive  credit  for up to  five years  of                 
service;  once the  service  had been  verified,  indebtedness                 
would  be determined  and the  vested employee  would have  to                 
arrange to buy the time back in the state PERS system.                         
                                                                               
Mr.  Lounsbury  reported  that  the  provisions  of  the  bill                 
would help  in recruitment  and retention  of participants  in                 
the  VPSO  program  in  the  villages.   He  noted  that  high                 
turnover   and   a   lack   of   qualified    applicants   had                 
historically been a problem with the program.                                  
                                                                               
Senator  Parnell queried  how the time  served would  function                 
for a person  who had worked five  years for the program.  Mr.                 
Lounsbury  replied that the  person would  receive up  to five                 
years of credit.                                                               
                                                                               
Senator  Parnell asked  whether  the credit  was  retroactive.                 
Mr. Lounsbury  replied in the  affirmative. He added  that the                 
individual would have to buy into the system.                                  
                                                                               
Senator  Adams   MOVED  to  REPORT  CSHB  206(FIN)am   out  of                 
committee   with  individual   recommendations  and   attached                 
fiscal note. There being no OBJECTION, it was so ordered.                      
                                                                               
CSHB  206(FIN)am  was  REPORTED   out  of  committee  with  no                 
recommendation  and  attached  indeterminate  fiscal  note  by                 
the Department of Administration.                                              
                                                                               
HOUSE BILL 313                                                               
                                                                               
     "An Act relating to preventive maintenance programs                       
     required for certain state grants; and providing for                      
     an effective date."                                                       
                                                                               
SENATOR  GARY  WILKEN  informed  the  committee  that  he  had                 
served  on  the preventative  maintenance  task  force  during                 
the  summer  and fall  before  the  legislative  session.  The                 
task  force had  traveled  around the  state  and listened  to                 
people;  it  became  evident that  there  was  an  opportunity                 
provided  by technology  and  collected knowledge  that  could                 
allow  preventative  maintenance  to be  put  in place  for  a                 
minimal  amount  of money.  He  argued that  the  preventative                 
maintenance  programs  were  important  and  were  lacking  in                 
many  different areas.  He  noted that  HB  313 would  require                 
that  school districts,  Regional Education  Attendance  Areas                 
(REAAs),   and   municipalities    would   have   preventative                 
maintenance  programs  in  place   before  being  given  money                 
through state grants.                                                          
                                                                               
Senator  Parnell  asked  why there  was  a  delayed  effective                 
date.                                                                          
                                                                               
DANNY  DEWITT, DIRECTOR,  NATIONAL FEDERATION  OF  INDEPENDENT                 
BUSINESSES,  ALASKA  CHAPTER,  replied  that  there  had  been                 
discussions  (primarily  with the  Department  of  Education);                 
there  was a concern  that  the short  time-frame between  the                 
present time  and July 1,  1998 would  not be enough  time for                 
a  number  of  entities  to  get  a preventative   maintenance                 
program  in  place.  The House  State  Affairs  Committee  had                 
elected  to  delay  one  year  so  that  entities  could  have                 
enough time to proceed without too much disruption.                            
                                                                               
Senator  Torgerson  summarized  that the  bill  would  require                 
that  funds  be  withheld  until  a preventative   maintenance                 
plan was  in place  that included  a computerized  maintenance                 
management  program. He  agreed with the  idea. He  questioned                 
the  impact   to  municipalities   and   REAAs  in  terms   of                 
financial  output.  Senator  Wilken responded  that  many  had                 
had the  same question until  Roger Patch gave a  presentation                 
in Anchorage.  Mr.  Patch described  what he  had done in  the                 
Department   of  Military  and   Veterans  Affairs,   and  had                 
suggested  that   a  municipality   or  agency  could   put  a                 
qualifying  preventative   maintenance  system  in  place  for                 
$10,000,  given  current  technology.  He did  not  think  the                 
process would be a burden.                                                     
                                                                               
Mr. DeWitt  directed attention to  a written description  of a                 
program  to track  maintenance.  He encouraged  the  use of  a                 
computerized  system with  built-in reminders  of what  needed                 
to  be done  and  when. He  referred  to different  levels  of                 
systems  that could  give most  agencies  an easy  opportunity                 
to comply with the law.                                                        
                                                                               
Senator  Torgerson was  concerned about  smaller REAAs,  since                 
the smallest  had only  21 people.  He noted  that the  fiscal                 
note  included  a  request  for  an  assistant   architect  to                 
evaluate  and  conduct  the systems.  He  questioned  why  the                 
department  did not just  track maintenance  on a  centralized                 
and  consolidated   basis  for   smaller  REAAs.  Mr.   DeWitt                 
thought   the   option   would  be   available   for   smaller                 
districts,  but the  district  would have  to  have the  plan.                 
There  was not a  requirement to  create a  new department  in                 
any given operation.                                                           
                                                                               
Senator  Torgerson  MOVED  to  REPORT  CSHB  313(FIN)  out  of                 
committee   with  individual   recommendations  and   attached                 
fiscal notes. There being no OBJECTION, it was so ordered.                     
                                                                               
CSHB  313(FIN)  was  REPORTED  out of  committee  with  a  "do                 
pass"  recommendation  and  attached fiscal  and  zero  fiscal                 
notes by the Department of Education.                                          
                                                                               
HOUSE BILL 315                                                               
                                                                               
     "An   Act  relating  to   operating  appropriations   for                 
     facility   operations,   maintenance   and  repair,   and                 
     renewal   and  replacement   for  components  of   public                 
     buildings and facilities; and providing for an                            
     effective date."                                                          
                                                                               
SENATOR   GARY  WILKIN   informed  the   committee  that   the                 
preventative    maintenance     task    force    had    issued                 
recommendations  in a report; item  5(a) was addressed  in the                 
presentation   on   HB   313,   the   required    preventative                 
maintenance  programs. Item 5(b)  required separate  operating                 
budget   appropriations    for   routine   and    preventative                 
maintenance.  House   Bill  315  would  amend   the  Executive                 
Budget  Act  to require  that  the proposed  budget  from  the                 
department  have  a  separate  line-item  for  maintenance  so                 
that  the legislature  could discuss,  argue,  and agree  upon                 
what  amount  would   be  provided  for  maintenance   in  the                 
upcoming  budget and then  measure the  results of the  effort                 
at  the end  of the  budget  cycle. The  bill  would make  the                 
item a single request for appropriation.                                       
                                                                               
Co-chair Sharp noted that the item would be segregated.                        
                                                                               
Senator  Torgerson   MOVED  to   REPORT  CSHB  315(FIN)   from                 
committee  with individual  recommendations  and the  attached                 
fiscal notes. There being no objection, it was so ruled.                       
                                                                               
CSHB  315(FIN)  was  REPORTED  out of  committee  with  a  "do                 
pass"  recommendation   and   two  new   zero  notes   by  the                 
Department of Education and the Office of the Governor.                        
                                                                               
AT EASE                                                                        
RECONVENED                                                                     
                                                                               
SENATE BILL 340                                                              
                                                                               
     "An Act relating to the University of Alaska and                          
     university land, and authorizing the University of                        
     Alaska to select additional state land."                                  
                                                                               
Senator Torgerson MOVED Amendment 1:                                           
                                                                               
     Page 10, line 30, subsection (c):                                         
     Delete line 30 through 31, and lines 1 and 2 on the                       
     top of page 11.                                                           
     Insert new language:                                                      
                                                                               
          Subject to appropriation of the income, the Board                    
          of Regents shall have an amount up to 20 percent                     
          of  the  income  derived   from  the  management  of                 
          university  land  selected  under  AS  14.43.65  for                 
          the  campus  of  the  university   that  is  located                 
          closest  to  the  land  from  which  the  income  is                 
          derived,  if  the borough  or  unified  municipality                 
          within  which   the  campus  is  located  agrees  to                 
          provide   a  match  for  the  same   amount  to  the                 
          campus.                                                              
                                                                               
Senator Torgerson MOVED amendment 1 to Amendment 1:                            
                                                                               
     Page 11, line 2                                                           
     Delete the word "unified"                                                 
                                                                               
Senator   Parnell  OBJECTED.   He  asked   for   clarification                 
regarding   the  amendment  to   the  amendment.  He   queried                 
whether  the intent  was to  broaden the  word  municipalities                 
to include cities as well.                                                     
                                                                               
Senator  Torgerson   responded  that  the  existing   language                 
would  not include  home-rule,  first-class,  or  second-class                 
cities.   Deleting   the  word   "unified"   would  open   the                 
provision    up   to   municipalities,    including    unified                 
municipalities.                                                                
                                                                               
Senator Parnell REMOVED his OBJECTION.                                         
                                                                               
Senator Adams  clarified that there  was an Alaskan  campus in                 
Barrow (Ilisagvik  College) not  related to the University  of                 
Alaska. He  queried the  revenues that  would be available  to                 
the Barrow institution.                                                        
                                                                               
Senator  Torgerson  did not  think  SB 340  would  apply to  a                 
campus that was not attached to the University of Alaska.                      
                                                                               
There  being  no   further  objection,  the  Amendment   1  as                 
amended was ADOPTED.                                                           
                                                                               
Senator Torgerson MOVED Amendment 2:                                           
                                                                               
     Page 9, line 17 through page 10, line 9 Subsection                        
     (m):                                                                      
     Delete in its entirety                                                    
                                                                               
Senator Adams  OBJECTED. He  asked whether  the work  would be                 
done (by  the Department  of Natural  Resources) to issue  the                 
documents necessary to convey the land.                                        
                                                                               
Senator Torgerson  believed the  issue was covered.  He wanted                 
to take  out the parts  related to land  not developed  in ten                 
years that  would then  revert back to  the state. He  thought                 
the    land-selection    process    and   the    duties    and                 
responsibilities   of  both  the  Board  of  Regents   of  the                 
University  of Alaska and  the Division  of Land would  remain                 
intact.                                                                        
                                                                               
Senator Adams MAINTAINED his OBJECTION.                                        
                                                                               
A roll call was taken on the amendment.                                        
                                                                               
In favor: Parnell, Phillips, Torgerson, Sharp, Pearce                          
Against: Adams                                                                 
                                                                               
Senator Donley was absent from the vote.                                       
                                                                               
The motion FAILED (5/1). Amendment 2 was adopted.                              
                                                                               
Co-chair  Sharp informed  the  committee  that the  Department                 
of Natural  Resources (DNR)  had just  faxed several  pages of                 
amendments.   He  believed   the  DNR   amendments  would   be                 
addressed on the floor of the Senate.                                          
                                                                               
Co-chair Sharp  stated that he  did not like the fiscal  notes                 
attached  to  the   bill.  He  referred  to  a   $1.5  million                 
request; he did not know how it would be used.                                 
                                                                               
Senator  Pearce opined  that the  bill could  not be  reported                 
out with  the fiscal  notes. She  believed  the item could  be                 
addressed in  Conference Committee.  She did not want  to give                 
the university  $1.5 million each  year. In addition,  DNR was                 
asked for another $800,000 in inter-agency receipts.                           
                                                                               
WENDY    REDMOND,   EXECUTIVE    VICE-PRESIDENT,    UNIVERSITY                 
RELATIONS,  UNIVERSITY OF  ALASKA, thought  there might  be an                 
error. She  stated that the university  fiscal note  should be                 
university receipts and not general funds.                                     
                                                                               
Co-chair  Sharp  noted  that  the  fiscal  note  said  general                 
funds, so there could be an error.                                             
                                                                               
Ms.  Redmond  agreed  that  the  item   should  be  university                 
receipts. She  added that the  land development would  be paid                 
from the proceeds from the fund.                                               
                                                                               
Senator  Pearce  commented   that  the  item  was  showing  as                 
interagency  receipts;  it was  expected that  the  university                 
would pay  those. Ms.  Redmond responded  that there  had been                 
agreements   in  past   land  bills   about  how   interagency                 
receipts  would  be  handled; the  department  would  pay  the                 
costs  for  surveying  and  platting,   and  would  share  the                 
conveyance cost.  She offered to  get a corrected  fiscal note                 
for at  least the  university's  portion to  make sure it  was                 
university receipts.                                                           
                                                                               
Senator  Torgerson asked  whether the department  would  be in                 
favor of  university receipts  to DNR.  Ms. Redmond  responded                 
that  it   would  not   be  university   receipts  but   would                 
appropriately  show as interagency  receipts if they  received                 
some  university   receipts  to   handle  the  costs   of  the                 
platting.                                                                      
                                                                               
Senator  Torgerson asked  whether  the impact  to the  general                 
fund   would   be  zero.   Ms.   Redmond   answered   in   the                 
affirmative.                                                                   
                                                                               
JANE  ANGVIK,  DIRECTOR,  DIVISION   OF  LAND,  DEPARTMENT  OF                 
NATURAL  RESOURCES   (via  teleconference),  added   that  the                 
department's  understanding of  the DNR  fiscal note was  that                 
it  was   to  be  paid  by   the  university  for   all  costs                 
associated with the conveyance.                                                
                                                                               
Senator Torgerson agreed.                                                      
                                                                               
Senator  Pearce opined  that  there was  still  a problem,  as                 
the budget  would increase.  The interagency  receipt  account                 
was general  funds. She thought  the issue could be  worked on                 
in Conference Committee.                                                       
                                                                               
Co-chair   Sharp  asked   for   the  fiscal   note  from   the                 
university  to  be  changed  from a  fund  source  of  general                 
funds  to university  receipts. He  wanted it  to be clear  on                 
the DNR  fiscal note  that the interagency  receipts  would be                 
from  university  receipts  upon agreement  and  request  from                 
the university  for services desired.  He noted that  it would                 
not be dictated by DNR.                                                        
                                                                               
Ms.  Angvik clarified  that  the  University of  Alaska  would                 
pay all costs associated if the bill was adopted.                              
                                                                               
Co-chair Sharp agreed.                                                         
                                                                               
Senator  Torgerson   MOVED  to   REPORT  CSSB  340(FIN)   from                 
committee  with individual  recommendations  and the  attached                 
fiscal notes.                                                                  
                                                                               
Senator Adams  OBJECTED. He  believed the  bill was being  set                 
up to  be vetoed  because  it would  appropriate resources  of                 
the state  that  would hurt  the economic  development of  the                 
state.  He also  believed the  bill would  hamper the  process                 
of  organizing  for  unorganized  municipalities.  He  thought                 
the  economic development  and  selection  of  non-oil-and-gas                 
properties  would be  hampered as  well as  mining and  timber                 
harvesting.  He  asserted   that  the  bill  would  create  an                 
exemption  from most  state law.  He noted  past allowance  of                 
Mental  Health Trust  selection  of lands.  He  did not  think                 
the selection  would be known  with the University  of Alaska.                 
He argued that the bill would set bad public policy.                           
                                                                               
A roll call was taken on the motion.                                           
                                                                               
In favor: Torgerson, Parnell, Phillips, Sharp, Pearce                          
Against: Adams                                                                 
                                                                               
Senator Donley was absent from the vote.                                       
                                                                               
The motion PASSED (5/1).                                                       
                                                                               
CSSB  340(FIN)   was  REPORTED  out  of  committee   with  "no                 
recommendation"  and attached fiscal  notes by the  Department                 
of Natural Resources and the University of Alaska.                             
                                                                               
ADJOURNMENT                                                                
                                                                               
Co-chair Sharp adjourned the meeting at 11:10 p.m.                             

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