Legislature(1999 - 2000)
04/12/2000 06:11 PM Senate FIN
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
April 12, 2000
6:11 PM
TAPES
SFC-00 # 85, Side A and Side B
CALL TO ORDER
Co-Chair John Torgerson convened the meeting at
approximately 6:11 PM.
PRESENT Co-Chair John Torgerson, Senator Al Adams, Senator
Lyda Green, Senator Pete Kelly, Senator Loren Leman,
Senator Randy Phillips, Senator Gary Wilken
Also Attending: SENATOR ROBIN TAYLOR; DARRYL HARGRAVES,
Executive Director, Alaska Council for School
Administrators; EDDY JEANS, Manager, School Finance and
Facilities Section, Education Support Services, Department
of Education and Early Development; KEITH LAUFER, Financial
and Legal Affairs Manager, Alaska Industrial Development
and Export Authority, Department of Community and Economic
Development; ELMER LINDSTROM, Special Assistant, Office of
the Commissioner, Department of Health and Social Services;
BOB LOEFFLER, Director, Division of Mining, Land and Water,
Department of Natural Resources;
Attending via Teleconference: From Kenai: PATRICK HICKEY;
KARL KIRCHER, Kenai Peninsula Fisherman's Association;
SANDY UMLAUT, President, Ugashik Set-netting Association;
PAUL SHADURA; From Kodiak: DAVE JONES, Director of Finance,
Kodiak School District; From Petersburg: ELIZABETH BACOM,
President, Petersburg School Board; From Homer: DAN CHALUP,
Representative, Katchemak Bay Salmon Producers Co-op;
SUMMARY INFORMATION
SB 290-PUBLIC SCHOOL FUNDING & EXPENDITURES
The Committee heard from the Department of Education and
Early Development, adopted a committee substitute,
considered amendments, but adopted none, and reported the
bill from Committee.
SB 248-AIDEA: BONDS & RURAL DEVELOPMENT
The Committee heard from the Alaska Industrial Development
and Export Authority. The bill was held in Committee.
SB 254-HEIRLOOM MARRIAGE CERTIFICATES
The Committee heard from the Department of Health and
Social Services and the bill moved from Committee.
SB 257-DEPT NAT RES ADMIN APPEALS/ OIL & GAS
The Committee heard from the Department of Natural
Resources and the bill moved from Committee.
SB 259-CRIMES: REPRESENTATIONS/I.D./COMPUTERS
Without further debate, the bill moved from Committee.
SB 283-NAT RES.REVENUE: FISH/TIMBER/LAND
The Committee heard from the Department of Natural
Resources and members of the public. The bill moved from
Committee.
SENATE BILL NO. 290
"An Act relating to state funding for transportation
of public school students; and providing for an
effective date."
PATRICK HICKEY testified via teleconference from Kenai to
address Amendment #1, increasing the minimum percentage of
school operating expenses to 80 percent from 70 percent,
which was not offered. He requested that the Committee give
the Association of School District Officials the
opportunity to divide the "section 400" accounting
component to reflect the shared classroom and
administrative duties of school principals.
DAVE JONES, Director of Finance, Kodiak School District
testified via teleconference from Kodiak to address his
concerns with the fifty-fifty clause for reimbursement of
increased pupil transportation costs. He said the Kodiak
School District was a good example of why this would not
work. He spoke about the minimum wage required to pay
school bus drivers. He stressed the only way the district
could cover the costs would be to take money from the
classroom, which would be contrary to the intent of the
formula funding program. He described the school district's
efforts along with other districts to encourage competition
to bring the costs down.
ELIZABETH BACOM, President, Petersburg School Board,
testified via teleconference from Petersburg about her
understanding that this legislation would apply to the Cost
of Living Allowance (COLA) portion of the pupil
transportation contracts. She spoke of the hardship of
declining funding due to declining enrollment and how this
additional funding reduction would force the district to
take money from the classrooms.
DARRYL HARGRAVES, Executive Director, Alaska Council for
School Administrators testified in Juneau about the matter
of fairness across the state. He remarked that most of the
Committee members represented large school districts and
that other smaller communities would have difficulties
meeting the matching fund requirements. He stressed that
the bus driver contracts were strictly negotiated following
many requirements imposed by the Board of Education. He
talked about the complexities of the contracts and the
required routes.
SENATOR ROBIN TAYLOR thanked the Committee for including
Section 3 in the bill. [Description forthcoming.]
Senator Wilken moved to adopt CS SB 290, 1-LS1555\N as a
workdraft.
Co-Chair Torgerson objected for an explanation.
Senator Wilken detailed the changes made to the bill in the
committee substitute as follows.
Section 2 - provides that school district pupil
transportation costs eligible for state reimbursement
are subject for following adjustments:
(1) sets the funding level received by the school
district for student transportation in FY 01 is
considered the limit for future reimbursement.
(2) stipulates that costs resulting from new
school facilities, increased enrollment or imposed by
state or federal law are excluded from the
reimbursement calculation
(3) allows the reimbursement limit to increase
each fiscal year by four percent or the Anchorage
Consumer Price Index (CPU), whichever is less.
(4) sets out the pupil transportation cost excess
of the limit, shall be reimbursable by 50 percent.
Section 3 - addresses the 70-30 percent split of
operating versus administrative expenditure issue. It
clarifies the definition of the instructional
component for the purpose of determining the school
district's operating budget's minimum expenditure for
instruction. It sets out that expenditures for school
administration, principals, assistant principals or
other assistants employed to supervise administrative
operations of a school bay not be considered
instructional expenditures.
Section 4 - lowers the Average Daily Membership (ADM)
threshold upon which a school district can count a
facility as a separate school from 750 to 450.
Sections 5 and 6 - set out the effective dates
Senator Phillips asked which communities are allowed under
the provisions of Section 4.
EDDY JEANS, Manager, School Finance and Facilities Section,
Education Support Services, Department of Education and
Early Development, answered that Section 4 would apply to
Delta Junction/Greely, Petersburg and Wrangell school
districts.
Senator Phillips asked if the legislature was not the
"assembly" for delta junction
Mr. Jeans responded that he believed in essence, that was
correct.
Senator Phillips asked why the legislature could therefore
not mandate that community to form its own borough by
making school funding a contingency.
Mr. Jeans responded that AS 14.17.905. Facilities
Constituting a School., applies to school districts whether
they are a municipality or a Rural Education Attendance
Area (REAA). He stated that Section 4 of the committee
substitute therefore establishes a threshold of how the
department can determine how communities can make school-
size adjustments.
Senator Phillips repeated his question of what was
preventing the legislature from mandating Delta Junction to
form a borough.
Co-Chair Torgerson said Mr. Jeans was not the person to
address that question. Co-Chair Torgerson stressed that
certainly the legislature had the power to mandate
boroughs.
Senator Phillips said he had concerns with Petersburg and
Wrangell paying for the services and Delta Junction not
paying.
Co-Chair Torgerson remarked he had concerns with the entire
Section 4.
Co-Chair Parnell asked if Delta Junction/Greely is the
first unorganized area that would qualify for funding under
this section.
Mr. Jeans replied there were other REAA communities that
would be affected by the Section 4 clause.
Co-Chair Parnell commented that this was a much bigger
issue than just this one school.
Senator Adams addressed the language in Section 2 (4),
"only 50 percent of these costs reimbursable under this
section that are in excess of the sum calculated under (1)
- (3) of this subsection shall be reimbursed to a school
district." He asked if this bill increased the "floor" of
pupil transportation by reviewing the CPI, which is not
used in the foundation formula. He wanted to know if the
differences had been calculated.
Senator Wilken answered that figures had not been
calculated.
Senator Adams asked if therefore the increases were
unknown.
Senator Wilken replied that the floor would be the amount
set in the FY 00 budget, which may change with the FY 01
budget if the requested $5 million increase is funded.
Senator Adams wanted to see the figures because he thought
the costs could be higher.
Senator Adams then asked if Section 3 applies to rural
districts where some principals not only run the school but
also teach courses.
Senator Wilken shared that there is a formula the
department can use for small school districts to classify
the principal as a working teacher. However, he said
schools with more than 50 students would not qualify for
this consideration because the principal or assistant is
responsible for managing the school.
Senator Adams spoke of fair and equitable funding for
students. He noted Amendment #2 of the previous committee
substitute and Amendment #6 for the current version, both
of which he sponsored. These amendments he explained,
address the issue that rural school districts receive only
60 cents on the dollar. He referred to the McDowell study
that showed teachers in rural districts were paid
differently because of their high cost of living. He wanted
the Committee to consider
Senator Wilken replied that he had not considered the first
amendment when drafting this committee substitute and had
only just seen the second.
Co-Chair Torgerson asked if the department had calculated
the impact of Section 4 on the fiscal note.
Mr. Jeans had and said the added cost would be
approximately $1,009,800. He noted that the department
would be opposed to the changes in the committee substitute
because of the requirement of SB 36 to evaluate the
effectiveness of that bill and report back to the
legislature with recommendations in 2001. Constant changes
to SB 36 would make the assessments difficult, he asserted.
Senator Adams asked what the cost would be of the proposed
Amendment #6 to "stop the eroding floor" and whether the
department supports or opposes that amendment.
Mr. Jeans replied that the erosion of the floor went from
approximately $17 million in FY 99 to $15 million in 2000.
The overall fiscal impact, he said would be the $15 million
on the floor at this time. He said it would be hard to
project how long it would take for that full amount to
erode.
In response to the question on the department's position on
the amendment, Mr. Jeans repeated that the department would
be opposed to any changes to the foundation funding formula
as set by SB 36.
Senator Adams objected to the adoption of the committee
substitute on two points. The first is the unknown costs of
Section 2, and the second is the absence of the provisions
of Amendment #6.
A roll call was taken on the motion.
IN FAVOR: Senator Green, Senator Donley, Senator Leman,
Senator Wilken, Co-Chair Parnell,
OPPOSED: Senator P. Kelly, Senator Phillips, Senator Adams,
and Co-Chair Torgerson
The motion PASSED (5-4)
The committee substitute version "N" was adopted as a
workdraft.
Co-Chair Torgerson established that the proposed amendments
would not be offered. [Copies on file.]
AT EASE
Amendment #5: This amendment deletes, "principals" from
page 2 line 21 of the committee substitute. The amended
language in Section 3 reads as follows.
(1) "instructional component" means [INCLUDES]
expenditures for teachers and [FOR] pupil support
services, but does not include expenditures for school
administration or for assistant principals, or other
assistants employed to generally supervise
administrative operations of a school;
New Text Underlined [DELETED TEXT BRACKETED]
Senator Green moved for adoption. Co-Chair Torgerson
objected.
Senator Green spoke to earlier discussions regarding the
need for classroom supervisors to provide assessment on the
teacher performance in the classroom. She stressed that if
a principal position was removed she thought the progress
of improved performance would go backward. While she did
not think 100 percent of the principal salary should go to
instruction, she thought that the portion of time spent on
instructional duties should be accounted for accordingly.
Co-Chair Torgerson replied this was the reason for the 70-
30 rule. He stated that this provision changed the intent
back to the original SB 36 rather than the recent Board of
Education regulation. He warned that if the percentages
were constantly changed, the board would be unable to
provide adequate assessments of the foundation formula-
funding program.
Senator Wilken explained that there are two conflicts
occurring at once. First, he said was the placement of the
principal in the organizational structure of the school as
a manager. However, he shared, the issue before the
Committee is how the principal position is accounted for in
the expenditures of the school district. He stated that
only the accounting component is changed. He stressed that
in order to follow the 70-30 requirement the procedures
need to remain constant.
A roll call was taken on the motion.
IN FAVOR: Senator Green
OPPOSED: Senator P. Kelly, Senator Wilken, Senator
Phillips, Senator Donley, Senator Leman, Senator Adams, Co-
Chair Parnell, Co-Chair Torgerson
The motion FAILED (1-8)
The amendment FAILED to be adopted.
Amendment #6: This amendment deletes "transportation of"
from the title on page 1 line 1. The amended language reads
as follows.
"An Act relating to state funding for public school
students; relating to a minimum amount of expenditures
by school districts for instruction; determining the
facilities constituting a school for purposes of
public school funding; and providing for an effective
date."
The amendment also inserts a new bill section on page 3,
following line 8 with an effective date of July 1, 2000, to
read as follows.
"Sec. 5. AS 14.18.490(d) is repealed."
Senator Adams moved for adoption. Co-Chair Torgerson
objected.
Senator Adams expressed that all students, regardless of
where they live, should receive the same amount of funding.
He stressed this is the worst kind of discrimination.
AT EASE 6:43 PM / 6:47 PM
Senator Wilken made a statement about Senator Adams's
comments regarding the color of one's skin that disturbed
him. He said the intent of SB 36 was to instill fairness.
He listed the several rural districts that actually
benefited from the formula funding formula. He suggested
that removing this floor would cause the funding mechanism
to revert back to the previously flawed formula.
Senator Adams responded the school districts cited by
Senator Wilken were short-funded beforehand and were only
now starting to receive fair funding. He asserted that if
Senator Wilken's explanation was so good, then the figures
should be reversed and urban schools should receive 60
cents on the dollar and rural schools receive the full
dollar.
A roll call was taken on the motion.
IN FAVOR: Senator Adams
OPPOSED: Senator Phillips, Senator Green, Senator Donley,
Senator Leman, Senator Wilken, Co-Chair Parnell, Co-Chair
Torgerson
ABSENT: Senator P. Kelly
The motion FAILED (7-1-1)
The amendment FAILED to be adopted.
Senator Green commented that she appreciated the efforts
that went into this legislation. However she needed to
understand the impact on those districts that did not have
an opportunity to renegotiate their pupil transportation
contracts before the floor was set. She referred to a
survey that showed those that had negotiated new contracts
had an advantage of several million dollars over those
districts that had not yet renegotiated.
Co-Chair Torgerson commented that the new committee
substitute negated all the 50-50 efforts since it allowed
for multiple adjustments. He noted that about the only item
not accounted for was the COLA.
Senator Green did not understand it that way. She would
prefer to be a district that had already renegotiated
rather than one that had not yet done so.
Co-Chair Torgerson stated that the costs of the new
contracts would not be known, but if the total were for $7
million, the state would be required to pay the $7 million.
Senator Donley wanted to see progress made towards the
charter school problem, but he noted he did not have an
amendment drafted to address this issue.
Senator Adams restated his request for calculations from
the department.
Mr. Jeans responded that to calculate that would be very
difficult and listed reasons why. He was able to say that
the COLA increases in Anchorage had been less than four
percent since 1982. This would make Senator Green's
concerns mute, he stated.
Senator Adams asked if the witness could tell the Committee
if the cost would be higher or lower than the Committee's
calculation of $5 million.
Mr. Jeans could not predict exactly what the increases
would be but that all current contracts contain COLA
provisions. He noted that the Railbelt area districts had
issued Requests for Proposal (RFP), which he thought, would
bring down the costs by encouraging outside competition.
Senator Adams asked if that would be the case only if there
was outside competition.
Mr. Jeans affirmed.
Senator Adams addressed Senator Green's concerns about the
effective dates of contracts. He asked if expiring
contracts would be taken care of because of the staggered
effective dates of Sections 5 and 6.
Mr. Jeans responded that Section 6 establishes FY 01 as a
base year that any increases will be measured. If fiscal
note of over $1 million accompanied the bill, he said, the
entire pupil transportation would be fully funded at the
Department of Education and Early Development's request and
that would establish the base line for the future.
Senator Green asked if Mr. Jeans could assure her that
those districts that have not yet renegotiated their pupil
transportation contract would not be at a detriment.
Mr. Jeans answered that was correct, provided the Anchorage
COLA did not exceed four percent over the term of the
contract. If did go above four, he explained, the increase
would be split 50-50 between the district and the state.
Co-Chair Torgerson clarified the COLA would be the only
expense reimbursable under normal contract provisions and
that increased enrollment would not be impacted.
Mr. Jeans stated that in his understanding of the committee
substitute's language FY 00 would be established as the
base year. He continued that if a district required
additional routes or added a new school or increased
student population would increase the base and set a new
threshold for the following years. He qualified that, if
this were not the case, he needed to know.
Co-Chair Torgerson assured the witness that was the
Committee's intent.
Senator Green spoke of the efforts made by some districts
to combine their contracts with other districts to
encourage competitive bidding. She would contend that after
one or two years, the state would be back to having only
one provider. She did not think this was a competitive
arena and therefore, this approach was not a long-term
solution.
Mr. Jeans agreed that could be the result, but that by not
making the step forward, the state was locking into the
existing contractors. He relayed that in conversations with
Outside contractors, he was told they could not break into
the Alaska market with the small routes. Therefore, he
stated, aligning these contracts makes the market more
appealing to competitors.
Tape: SFC - 00 #85, Side B 7:03 PM
Mr. Jeans continued that contracts must consist of more
than 100 busses in order to make it worthwhile for Outside
providers to enter the market.
Senator Green gave a scenario of high oil prices resulting
in high fuel prices to operate the busses and asked if
those increased costs were included in the price of the
contracts
Mr. Jeans answered that was his interpretation as well.
Senator Wilken moved to report CS SB 290, 1-LS1555\N from
Committee with forthcoming Department of Education and
Early Development fiscal note.
Senator Green objected.
Co-Chair Torgerson objected saying that while he would not
prevent the bill from reporting out of Committee, he could
not support Section 4. He stressed that he could not agree
to a million-dollar increase to the operating budget
already agreed upon by the legislature.
A roll call was taken on the motion.
IN FAVOR: Senator Wilken, Senator P. Kelly, Senator
Phillips, Senator Donley, and Co-Chair Parnell
OPPOSED: Senator Adams, Senator Green, and Co-Chair
Torgerson
ABSENT: Senator Leman
The motion PASSED (5-3-1)
The bill was MOVED from Committee.
SENATE BILL NO. 248
"An Act relating to the financing authority, payment
in lieu of tax agreements, and tax exemption for
assets and projects of the Alaska Industrial
Development and Export Authority; relating to renaming
and contingently repealing the rural development
initiative fund within the Department of Community and
Economic Development, and establishing the rural
development initiative fund within the Alaska
Industrial Development and Export Authority; and
providing for an effective date."
KEITH LAUFER, Financial and Legal Affairs Manager, Alaska
Industrial Development and Export Authority (AIDEA),
Department of Community and Economic Development referred
to the sectional analysis of the bill. [Copy on file.]
Mr. Laufer stated that the legislation has three elements.
The first, he said extends the AIDEA general bonding
authority that would otherwise sunset July 1, 2000. The
second element of the bill, he explained transfers the
Rural Development Initiative Fund Loan program to AIDEA. He
relayed that the third element is technical changes to
provisions in existing law dealing with tax exemptions and
payment in lieu of tax agreements related to AIDEA
development finance projects.
With regard to the bonding sunset, Mr. Laufer asserted that
AIDEA has been subject to these sunsets for many years. He
said the current sunset would prevent AIDEA from issuing
all bonds other than refunding bonds regardless of size
without specific legislative approval. Specifically, he
pointed out, the sunset would prevent issuing bonds for
less than $10 million for development finance projects. He
noted that bonds over $10 million, currently and in the
future under this legislation, to require specific
legislative approval.
Mr. Laufer continued that the sunset would also prevent
AIDEA from issuing conduit revenue bonds. He explained that
these are the bonds that AIDEA can issue and which do not
obligate either AIDEA's credit or the credit of the State
Of Alaska but provide qualified projects with low-cost tax-
exempt financing.
Mr. Laufer stated that the bill would extend the sunset
provision to July 2003 and make clear that the conduit
revenue bonds are not subject to the sunset.
Mr. Laufer then addressed the transfer of the Rural
Development Initiative Fund (RDIF). That program, he stated
would formally move from the former Department and
Community and Regional Affairs to AIDEA. He explained the
program makes loans under $200,000 to businesses and
communities with populations of less than 5,000. He
expressed that AIDEA has long supported this program that
also advances AIDEA's mission. He spoke of past actions
where the legislature has authorized AIDEA to purchase
these loans and directed the proceeds from the loans to re-
capitalize the initiative fund. He stated that the
relocation of this program would allow it to become self-
sustaining without the need for periodic legislative
appropriations. He noted that AIDEA would continue to work
with the Department of Community and Economic Development
to administer the program.
Mr. Laufer stated that this bill anticipates that a
separate appropriation will also pass that would allow
AIDEA to purchase the existing RDIF loan portfolio and the
other assets in the fund.
Mr. Laufer continued that the bill makes technical
amendments to the tax exemption provisions related to
AIDEA-owned projects. Under existing law, he explained
AIDEA's ownership of these projects is tax-exempt and local
jurisdictions are permitted to exempt users of AIDEA-owned
development projects from property tax or to enter into
payment in lieu of tax agreements with those projects.
Unfortunately, he shared these statutes are not clear as to
the mechanism which are to be used for the tax exemption.
He detailed two specific problems the bill address; pilot
agreements and clarification to allow municipalities to
grant tax exemptions.
Co-Chair Torgerson asked about the RDIF.
Mr. Laufer described that due to complicated language in
the transfer provision of the bill, there could be two
funds. However, he assured that once the purchase of the
fund's assets is authorized and consummated, the existing
program is repealed and is combined into the new program.
This language, he pointed out is contained in Section 10 of
the bill.
Co-Chair Torgerson wanted to know if the language in the
transfer is exactly the same as the existing language.
Mr. Laufer replied that the new language mirrors the
existing language with the exception of technical changes
to allow the fund to comply with AIDEA's assets. He assured
there are no changes to the program.
Senator Phillips asked who asked for this legislation and
why. He commented that his constituency would like to see
the state sell AIDEA.
Mr. Laufer answered the bill was requested by the governor
with the primary intent to extend AIDEA's bonding
authority. He added that the RDIF transfer is included to
avoid the need for future legislative appropriations to
capitalize the fund.
Senator Phillips wanted to know who requested the governor
sponsor this bill.
Mr. Laufer shared that AIDEA and the department had been
discussing this matter for "some time."
Senator Donley asked the criteria for the RDIF loans. He
noted that AIDEA's charter requires it to practice due
diligence to get repayment of its loans. He wanted to know
if the rural loans were subject to the same requirement and
what action AIDEA planned to take if a number of the loans
began to default. He voiced his skepticism of many loan
programs trying to become independent from state funding
and instead become part of the AIDEA program. He stated
that by becoming part of AIDEA, the programs are no longer
subject to legislative scrutiny but that the funds used for
the loans could instead be deposited into the general fund
as AIDEA dividends.
Mr. Laufer responded that AIDEA has already been purchasing
the RDIF loan portfolios and therefore has experience with
these loans. He stated that the default rates are not out
of line with what is expected in a typical loan portfolio
that AIDEA would manage. He stressed that the loans are
required to go through a similar process, as would be
required in typical AIDEA programs. He detailed these
requirements.
Senator Donley asked if there was a maximum dollar amount
AIDEA could put into the RDIF program.
Mr. Laufer answered that there is not a maximum and that
approximately $1 million would be a significant amount to
make it the fund a truly revolving loan program. He shared
that the current problem is that once the department has
loaned the money, there is insufficient money returned on
an annual basis to fund any new loans. AIDEA would be able
to operate the fund as a revolving loan program, he
assured.
Co-Chair Torgerson asked if AIDEA would oppose a
legislative imposed cap of $2 million as the amount that
could be given to the RDIF.
Mr. Laufer did not think so.
Co-Chair Torgerson asked for an explanation of Section 7
asking for authorization to make loans to a political
subdivision and if AIDEA is making loans to local
governments.
Mr. Laufer clarified that is not the case, but that the
provision refers to the ability of users of AIDEA-owned
projects to enter into payment in lieu of tax agreements to
build the subdivisions. He stated that the language is
detailed to make sure it is clear that the local
subdivisions and the users of the project may enter into
the tax agreements.
Co-Chair Torgerson noted the bill would not be reported
from the Committee at this hearing, saying he wanted to
consider setting a maximum amount that AIDEA would be
allowed to deposit into the RDIF.
Senator Green referred to the language on page 4, line 27
"community with a population of 5,000 or less". She wanted
to know how many communities fit this description in the
state.
Mr. Laufer did not have that information.
Co-Chair Torgerson ordered the bill HELD in Committee.
COMMITTEE SUBSTITUTE FOR SENATE BILL NO. 254(HES)
"An Act relating to heirloom certificates of
marriage."
This was the second hearing for this bill in the Senate
Finance Committee.
Co-Chair Torgerson announced that he had had earlier
concerns with the fiscal note and requested the department
to recalculate the cost to implement the legislation.
ELMER LINDSTROM, Special Assistant, Office of the
Commissioner, Department of Health and Social Services
noted the $12,000 reduction made to the fiscal note. [Copy
on file.]
Senator Phillips asked if this program adds another
position to government. While he thought this program would
be nice to have, he did not consider it a function of
government.
Senator Adams offered a motion to report from Committee, CS
SB 254 (HES) with $55,400 fiscal note from the Department
of Health and Social Services. Senator Phillips objected.
A roll call was taken on the motion.
IN FAVOR: Senator Leman, Senator Adams, Senator Wilken,
Senator P. Kelly, and Co-Chair Torgerson
OPPOSED: Senator Green, Senator Phillips
ABSENT: Senator Donley, Co-Chair Parnell
The motion PASSED (5-2-2)
The bill was MOVED from Committee.
AT EASE to 7:29 PM
SENATE BILL NO. 257
"An Act relating to notice requirements for certain
final findings concerning the disposal of an interest
in state land or resources for oil and gas; relating
to administrative appeals and petitions for
reconsideration of decisions of the Department of
Natural Resources; and providing for an effective
date."
BOB LOEFFLER, Director, Division of Mining, Land and Water,
Department of Natural Resources, explained the bill does
two things, creates a uniform appeals process for the
Department of Natural Resources and corrects a notice
problem for the Division of Oil and Gas.
Mr. Loeffler explained the problems that precipitated this
bill. He stated that for a variety of reasons, different
laws have been passed over several years, and because of
the way they interact, there is a variety of appeals
processes within the department. He noted that these
different processes follow different schedules with 15 - 30
days allowed to file an appeal. The different processes, he
added require different channels and opportunities for
appeals. He remarked that this causes confusion for the
public and for department staff. He stated that this bill
establishes there is only one appeal process, one appeal to
the commissioner and the next appeal made in court.
Mr. Loeffler continued with the second problem relating to
notices for lease sales stating that there are currently
three notices. He detailed these notices. As a result, he
said the public is confused and there is additional cost
for publishing the multiple notices.
Co-Chair Torgerson asked why this bill does not have a
negative fiscal note.
Mr. Loeffler responded that the Division of Oil and Gas has
a higher workload this year, and the intent is to use the
small cost savings from this legislation to pay for the
other operations. The savings anticipated by other
divisions, he said are spread between many employees and
would be difficult to identify. He stated that because the
department had a $750,000 budget reduction, "we're just
struggling to keep up."
Co-Chair Torgerson asked if the fiscal note therefore has
nothing to do with the bill but rather with the
department's desire to save money to be spent elsewhere
within the department.
Mr. Loeffler repeated that the savings would be difficult
to calculate.
Senator Leman asked how much the department spends annually
on public notices.
Mr. Loeffler did not know the entire cost but knew that the
intermediate notice is a few thousand dollars for each oil
and gas lease sale. He noted that the department offers "a
few" of these sales each year.
Senator Leman was interested in reducing costs and stated
that if this bill could allow the department to save money,
he supported it. He suggested a conceptual amendment to
remove the appeals process from the bill and maintain only
the public notice portion.
Co-Chair Torgerson wanted the amendment offered on the
Senate floor.
Co-Chair Parnell pointed out that the Committee has in its
possession, another bill that contains this language.
Co-Chair Parnell offered a motion to report from Committee,
SB 257, 1-GS2046.A with accompanying zero fiscal note from
the Department of Natural Resources.
Without objection, the bill MOVED from Committee.
COMMITTEE SUBSTITUTE FOR SENATE BILL NO. 259(JUD)
"An Act relating to crimes and offenses relating to
aural representations, recordings, access devices,
identification documents, impersonation, false
reports, and computers; and providing for an effective
date."
This was the fifth hearing for this bill in the Senate
Finance Committee. At the last hearing, a proposed
committee substitute, 1-LS1284\M was before the members but
not adopted.
Senator Green asked which version contains the more complex
language.
It was established that Version "M" would not be adopted.
Co-Chair Parnell offered a motion to report from Committee,
CS SB 259 (JUD), 1-LS1284\K with accompanying Department of
Administration $84,700 fiscal note and Department of Public
Safety $22,800 fiscal note.
There was no objection and the bill MOVED from Committee.
COMMITTEE SUBSTITUTE FOR SENATE BILL NO. 283(RES)
"An Act establishing the shore fisheries development
lease program account and the timber receipts account;
relating to the accounting for and appropriation of
revenue from the state land disposal program, the
shore fisheries development lease program, and the
state timber disposal program; and providing for an
effective date."
BOB LOEFFLER, Director, Division of Mining, Land and Water,
Department of Natural Resources testified that the bill
provides for a land disposal income fund for similar shore
fisheries and for timber harvests. He detailed that this
bill provides a separate accounting system for a land sale
program to allow the legislature and the public to
understand the benefits and the physical consequences of
the land sales.
Mr. Loeffler continued that the bill promotes the concept
that state land sale programs should return revenues, not
only for the sake of more land sales, but should also
provide a return to the state. While he did not think these
land sales would close the state's budget gap, he noted
they would provide revenue above the amount needed to fund
a stable land disposal program.
Mr. Loeffler detailed that the bill allows the department
to use the income from past and present sales to fund more
land disposals up to $5 million, with the remaining
revenues going to the general fund.
Mr. Loeffler addressed the fiscal note, which he said
contain the concepts discussed during hearings on SB 6,
another lands disposal legislation. The amount of the
fiscal note, he said is enough to "jump start" the program
and to keep up with new acreage in future years.
Mr. Loeffler spoke to the fisheries program, saying this
bill provides a similar fund in the state treasury for the
shore fisheries program. This program, he explained
currently generates $360,000 for 1,200 shore fisheries
leases and this bill would allow a portion of that revenue
be used to fund the program.
DAN CHALUP, Representative, Katchemak Bay Salmon Producers
Co-op, testified via teleconference from Homer in support
of Section 3 of the legislation. His organization thought
that a portion of the proceeds should go into the program
to protect it from any further budget reductions from the
Department of Natural Resources.
KARL KIRCHER, Kenai Peninsula Fisherman's Association,
testified via teleconference from Kenai in favor of the
bill and referred to written testimony submitted to the
Committee. [Copies not provided.] He also gave details
about the organization; its purpose and the existing shore
lease problems.
SANDY UMLAUT, President, Ugashik Set-netting Association,
testified via teleconference from Kenai about the
organization and to request that members of the Committee
vote in favor of this bill. She stated that this bill would
continue to provide stability for the set-net industry.
PAUL SHADURA, member of a family that set-nets, testified
via teleconference from Kenai telling about the successful
fishing areas. His family supported the bill.
Co-Chair Torgerson asked if new staff would be hired to
implement the legislation.
Mr. Loeffler said approximately eight people would run the
program. He noted that three title-search positions already
existed and would be staffed by employees whose funding was
eliminated in the operating budget. He qualified that two
new positions would be needed for the shore fisheries
portion of the program to offset staff reductions from the
previous year.
Senator Phillips asked how the legislature should explain
to the public that the state is adding new positions to the
government.
Mr. Loeffler said the division would contract out functions
as best as it can, but cautioned that in order to have a
stable lands disposal system, staff are needed.
Senator Phillips contended that would not stop people from
complaining.
Co-Chair Torgerson asked about the increase of 55,000 acres
up from the earlier 50,000.
Mr. Loeffler referred to discussions regarding SB 6 and the
five scenarios provided. He detailed that 55,000 acres was
one of those scenarios, which is made up of 50,000 of re-
offered, previously distributed parcels and 5,000 in remote
sales and subdivisions. He explained how the funds
allocated would be used to implement the lands disposal.
Co-Chair Torgerson commented that he would not hold the
bill, but the warned that the performance measures would be
scrutinized thoroughly. He did not have problem with the
additional funding for positions.
Senator Leman stated that he holds a set-net shore
fisheries lease. He attested that the personal cost to him
would be the same whether or not this bill passes.
Senator Adams offered a motion to move from Committee, CS
SB 283 (RES) with two accompanying fiscal notes from the
Department of Natural Resources, Division of Minerals, Land
and Water. One fiscal note is $1,014,300 for the Land Sales
and Municipal Entitlements component and the other fiscal
note is $200,000 for the Claims, Permits and Leases
component.
Without objection, the bill MOVED from Committee.
ADJOURNED
Senator Torgerson adjourned the meeting at 7:55 PM.
SFC-00 (23) 04/12/00
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