Legislature(2005 - 2006)SENATE FINANCE 532

04/27/2006 09:00 AM Senate FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 231 BUDGET: CAPITAL & OTHER APPROPRIATIONS TELECONFERENCED
Scheduled But Not Heard
+ SB 291 MUNICIPAL HARBOR FACILITY GRANTS TELECONFERENCED
Moved CSSB 291(CRA) Out of Committee
+ SB 315 DISPOSITION OF UNREDEEMED PROPERTY TELECONFERENCED
Moved CSSB 315(L&C) Out of Committee
+ SB 274 STATE FIREARM DISPOSAL AND INVENTORY TELECONFERENCED
Moved CSSB 274(STA) Out of Committee
*+ SR 6 SENATE VPSO TASK FORCE TELECONFERENCED
Moved SR 6 Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
                            MINUTES                                                                                           
                    SENATE FINANCE COMMITTEE                                                                                  
                         April 27, 2006                                                                                       
                           9:08 a.m.                                                                                          
                                                                                                                                
                                                                                                                              
CALL TO ORDER                                                                                                               
                                                                                                                                
Co-Chair  Lyda  Green  convened   the  meeting  at  approximately                                                               
9:08:49 AM.                                                                                                                   
                                                                                                                                
PRESENT                                                                                                                     
                                                                                                                                
Senator Lyda Green, Co-Chair                                                                                                    
Senator Gary Wilken, Co-Chair                                                                                                   
Senator Con Bunde, Vice Chair                                                                                                   
Senator Fred Dyson                                                                                                              
Senator Bert Stedman                                                                                                            
Senator Lyman Hoffman                                                                                                           
Senator Donny Olson                                                                                                             
                                                                                                                                
Also  Attending:  SENATOR RALPH  SEEKINS;  KIM  CARNOT, Staff  to                                                             
Senator  Bert Stedman;  KATHIE WASSERMAN,  Representative, Alaska                                                               
Municipal  League; JOHN  STONE, Alaska  Harbormasters Association                                                               
and Harbormaster, City and Borough  of Juneau; ANNETTE SKIBINSKI,                                                               
Staff to Senator John Cowdery                                                                                                   
                                                                                                                                
Attending  via   Teleconference:  From  Nome:   LORETTA  BULLARD,                                                             
President, Kawarek, Incorporated                                                                                                
                                                                                                                                
SUMMARY INFORMATION                                                                                                         
                                                                                                                                
SR 6-SENATE VPSO TASK FORCE                                                                                                     
                                                                                                                                
The Committee  heard from the  bill's sponsor. The  bill reported                                                               
from Committee.                                                                                                                 
                                                                                                                                
SB 291-MUNICIPAL HARBOR FACILITY GRANTS                                                                                         
                                                                                                                                
The  Committee heard  from  the bill's  sponsor  and took  public                                                               
testimony. The bill reported from Committee.                                                                                    
                                                                                                                                
SB 315-DISPOSITION OF UNREDEEMED PROPERTY                                                                                       
                                                                                                                                
The committee heard  from the sponsor and reported  the bill from                                                               
Committee.                                                                                                                      
                                                                                                                                
SB 274-STATE FIREARM DISPOSAL AND INVENTORY                                                                                     
                                                                                                                                
The  committee heard  from the  bill's sponsor  and reported  the                                                               
bill from Committee.                                                                                                            
                                                                                                                                
SB 231-BUDGET: CAPITAL & OTHER APPROPRIATIONS                                                                                   
                                                                                                                                
This bill was scheduled but not heard.                                                                                          
                                                                                                                                
9:09:03 AM                                                                                                                    
                                                                                                                                
                                                                                                                                
     SENATE RESOLUTION NO. 6                                                                                                    
     Creating and relating to the Senate VPSO Task Force.                                                                       
                                                                                                                                
                                                                                                                                
This was  the first hearing for  this bill in the  Senate Finance                                                               
Committee.                                                                                                                      
                                                                                                                                
SENATOR RALPH  SEEKINS, Chair, Senate Judiciary  Committee, which                                                               
sponsored this  bill communicated  the resolution would  create a                                                               
Senate  task force  to gather  facts and  further discussions  to                                                               
improve the  Village Public Safety Officers  (VPSO) program. Many                                                               
rural communities  in the  State depend on  the VPSO  program for                                                               
police protection and law enforcement services.                                                                                 
                                                                                                                                
Senator  Seekins  stated that  upon  review  of a  Rural  Justice                                                               
Committee report [copy not provided]  and information provided by                                                               
rural  communities,  the  Senate Judiciary  Committee  determined                                                               
that  forming  a  task  force  to review  the  program  would  be                                                               
beneficial.  He  also  expressed  that the  commissioner  of  the                                                               
Department  of Public  Safety, which  oversees  the program,  was                                                               
aware of the issues and would continue to address them.                                                                         
                                                                                                                                
Senator  Seekins  conveyed  the  task  force  would  endeavor  to                                                               
identify  program weaknesses  in order  to determine  why program                                                               
objectives have  been unobtainable. The task  force would develop                                                               
a  report to  include  findings and  recommendations for  program                                                               
improvement.                                                                                                                    
                                                                                                                                
9:11:34 AM                                                                                                                    
                                                                                                                                
Co-Chair  Green asked  for further  clarification of  language on                                                               
page 1,  lines 14  through 16,  of the  resolution that  reads as                                                               
follows.                                                                                                                        
                                                                                                                                
     FURTHER RESOLVED that  the public members of  the task force                                                               
     may  receive per  diem and  travel  expenses authorized  for                                                               
     boards  and  commissions  under  AS  39.20.180,  subject  to                                                               
     available funding and approval by the task force chair; …                                                                  
                                                                                                                                
9:11:54 AM                                                                                                                    
                                                                                                                                
Senator Seekins  clarified that  per diem  for public  members of                                                               
the task  force would be limited  to meals and lodging  only. "No                                                               
honorarium of any kind" would be provided.                                                                                      
                                                                                                                                
Co-Chair  Green asked  whether public  member  expenses would  be                                                               
addressed via a reimbursement method.                                                                                           
                                                                                                                                
Senator  Seekins  affirmed  it  would be  a  "dollar  for  dollar                                                               
reimbursement".                                                                                                                 
                                                                                                                                
Co-Chair  Green  questioned  whether the  language  was  specific                                                               
enough in this regard.                                                                                                          
                                                                                                                                
Senator Seekins  was "willing  to craft"  the language  as deemed                                                               
necessary.  Continuing, however,  he assured  that the  intent of                                                               
the language would be adhered to.                                                                                               
                                                                                                                                
Co-Chair  Green   voiced  concern   that  the  intent   could  be                                                               
challenged, as no monetary limitation was specified.                                                                            
                                                                                                                                
Senator Seekins  communicated that, at his  request, Tamara Cook,                                                               
Director, Legislative  Legal and  Research Services,  had drafted                                                               
the language in question.                                                                                                       
                                                                                                                                
Co-Chair  Green  sought  confirmation  Ms.  Cook  considered  the                                                               
language "restrictive enough".                                                                                                  
                                                                                                                                
Senator Seekins remarked that Ms.  Cook deemed the language to be                                                               
reasonable. Furthermore,  expenses would  be subject  to approval                                                               
by the task  force chair. Reimbursable expenses  would be limited                                                               
to meals and travel.                                                                                                            
                                                                                                                                
In  concluding  his remarks,  Senator  Seekins  opined that  task                                                               
force members  traveling to  rural areas of  the State  should be                                                               
provided meals and transported and housed in "a safe manner".                                                                   
                                                                                                                                
Committee members raised no further concerns.                                                                                   
                                                                                                                                
9:13:20 AM                                                                                                                    
                                                                                                                                
Co-Chair Green  asked whether this legislation  mirrored previous                                                               
efforts to  address concerns  about the  VPSO program  or whether                                                               
this action  differed because circumstances  have advanced  to "a                                                               
new level".                                                                                                                     
                                                                                                                                
Senator Seekins  viewed the  situation as  reaching "a  new level                                                               
where  solid recommendations"  and  action  must occur.  Previous                                                               
discussions  on the  issue had  not resulted  in any  action. The                                                               
goal for this task force would  be to identify and further "solid                                                               
solutions".                                                                                                                     
                                                                                                                                
9:14:07 AM                                                                                                                    
                                                                                                                                
LORETTA   BULLARD,  President,   Kawerak,  Inc.,   testified  via                                                               
teleconference from  Nome. Kawerak is  "one of six  regional non-                                                               
profit corporations that contracts with  the State to provide the                                                               
Village  Public   Safety  Officer  program".  The   VPSO  program                                                               
operated by  Kawerak employs  eight people  in 16  communities in                                                               
the Bering Straits region.                                                                                                      
                                                                                                                                
Ms.   Bullard  "encouraged"   the  Committee   to  support   this                                                               
legislation  and  report it  from  Committee.  The proposed  task                                                               
force should  travel to rural communities,  regardless of whether                                                               
a VSPO program  operates there, in order to  "gather public input                                                               
on  how the  VPSO program  can be  improved. This  service is  so                                                               
desperately needed  in the rural  areas." The VPSO  program could                                                               
"function more effectively". Filling  vacant VPSO positions would                                                               
provide rural residents  access "to law enforcement  that they so                                                               
desperately need".                                                                                                              
                                                                                                                                
Ms. Bullard  noted that the  previous year, the  VPSO contractors                                                               
had hired Dittman Research to  conduct a public opinion survey of                                                               
the Program.  The survey  results could be  shared with  the task                                                               
force, who  might find  them "very illuminating  in terms  of the                                                               
rural perception of the VPSO program".                                                                                          
                                                                                                                                
9:15:56 AM                                                                                                                    
                                                                                                                                
Senator Olson asked  Ms. Bullard whether she  anticipated any new                                                               
information to be gleamed by this task force.                                                                                   
                                                                                                                                
Ms.  Bullard thought  the effort  could provide  "an opportunity"                                                               
for Legislators  to hear Rural Alaskans'  comments regarding "the                                                               
need  for the  Program".  A review  of  Statutes and  regulations                                                               
governing the program  and the wages paid to VPSOs  would also be                                                               
appreciated.  In addition,  the "huge"  role played  by the  VPSO                                                               
contract administrators,  who firmly believe in  the necessity of                                                               
the program, is "not reflected in the State program".                                                                           
                                                                                                                                
Ms. Bullard  pointed out  that the VPSO  program is  operating in                                                               
several communities  whose city  offices are  staffed only  a few                                                               
hours a day, and many of  those communities are struggling to pay                                                               
their  utility  bills.  While   Alaska  Congressman  Senator  Ted                                                               
Stevens  successfully   secured  federal   funds  to   assist  in                                                               
renovating rural  holding cells, that  money has yet to  be spent                                                               
and  many "community  holding  cells are  is  dismal shape."  The                                                               
Legislature  should be  aware of  such issues  and should  assist                                                               
VPSO  contractors   and  the  Department  of   Public  Safety  in                                                               
addressing them.                                                                                                                
                                                                                                                                
9:17:30 AM                                                                                                                    
                                                                                                                                
Senator Olson  asked why the task  force's Legislative membership                                                               
was limited to three Senate members.                                                                                            
                                                                                                                                
Senator Seekins cited  this as a Senate Resolution.  The House of                                                               
Representatives could choose to participate.                                                                                    
                                                                                                                                
Senator Olson applauded the effort  to address this issue, as the                                                               
VPSO program is "very important" to Rural Alaska.                                                                               
                                                                                                                                
9:17:59 AM                                                                                                                    
                                                                                                                                
Senator  Olson  moved to  report  the  bill from  Committee  with                                                               
individual recommendations and accompanying fiscal note.                                                                        
                                                                                                                                
There being no  objection, SR 6 was REPORTED  from Committee with                                                               
new  $70,000  fiscal  note,  dated   April  27,  2006,  from  the                                                               
Legislative Affairs Agency.                                                                                                     
                                                                                                                                
Co-Chair Green  stated the Resolution  would move  from Committee                                                               
with  the understanding  that the  per diem  would be  limited to                                                               
meals and lodging only.                                                                                                         
                                                                                                                                
Senator Seekins affirmed.                                                                                                       
                                                                                                                                
9:18:40 AM                                                                                                                    
                                                                                                                                
                                                                                                                                
     CS FOR SENATE BILL NO. 291(CRA)                                                                                            
     "An Act relating to the municipal harbor facility grant                                                                    
     program; and providing for an effective date."                                                                             
                                                                                                                                
                                                                                                                                
9:18:56 AM                                                                                                                    
                                                                                                                                
This was  the first hearing for  this bill in the  Senate Finance                                                               
Committee.                                                                                                                      
                                                                                                                                
SENATOR  BERT STEDMAN,  the bill's  sponsor, provided  background                                                               
information pertinent  to the bill.  Approximately 30  years ago,                                                               
most  municipal  harbors  were   constructed  with  State  funds.                                                               
Agreements  were set  forth  which, in  essence,  made the  State                                                               
responsible  for  major  harbor   maintenance  projects  and  the                                                               
municipalities responsible  for harbor operations.  However, over                                                               
time, the  arrangement did  not "work very  well", and  user fees                                                               
were insufficient  to fund aging  harbors' major  maintenance and                                                               
replacement needs. Eventually the  State issued a bond obligation                                                               
and   used  the   proceeds  to   pay  municipalities   to  assume                                                               
responsibility for their harbors.                                                                                               
                                                                                                                                
Senator Stedman  reported that the  transfer program  initiated a                                                               
"heated  debate"  between the  State  and  the municipalities  in                                                               
regard  "to what  they  were  getting and  the  condition of  the                                                               
asset". Many  communities accepted  their harbors, but  felt they                                                               
were receiving  30 to  50 cents  on the  dollar and  being "stuck                                                               
with  huge maintenance"  and replacement  expenses.  In order  to                                                               
address those  looming expenses,  many communities  adopted plans                                                               
to increase such things as harbor rental fees.                                                                                  
                                                                                                                                
Senator Stedman  declared this bill would  address the continuing                                                               
debate between  communities and the  State. It would  implement a                                                               
program  to  provide  a  50 percent  capital  matching  grant  to                                                               
coastal communities that desire  to upgrade, expand, or construct                                                               
new harbors. In  contrast to the original agreement  in which the                                                               
State  funded  such projects  "with  no  strings attached",  this                                                               
program would  implement "stringent requirements" in  order for a                                                               
community  to  receive the  50  percent  match. The  requirements                                                               
would include the development of  fee structures that would allow                                                               
the  community   to  provide  for  maintenance   and  operational                                                               
expenses and  replacement reserves. The program  would be limited                                                               
to no more than one grant  per community per year and total State                                                               
match  funds of  five  million  dollars per  harbor.  Thus a  ten                                                               
million dollar harbor  project could be funded  with five million                                                               
dollars  of community  funds and  five million  dollars of  State                                                               
funds. This would  be sufficient to fund a  large harbor project,                                                               
as  attested  to by  the  completion  of  a recent  large  harbor                                                               
project in Juneau that cost approximately $6,500,000.                                                                           
                                                                                                                                
Senator Stedman pointed out that  as specified in Section 1, page                                                               
1, line  8, the proposal  would include "permissive  language" in                                                               
that the Legislature "may appropriate"  up to ten million dollars                                                               
annually  for  approximately  ten  years.  This  money  would  be                                                               
comprised  of up  to five  million dollars  from both  the marine                                                               
fisheries business tax  and the marine fuel tax.  The money would                                                               
be  distributed first  to communities  that received  harbors via                                                               
the transfer, and  then to other communities on a  list ranked by                                                               
the  Department of  Transportation and  Public Facilities  (DOT),                                                               
which would administer the program.                                                                                             
                                                                                                                                
Senator Stedman  disclosed that a  tremendous amount  of dialogue                                                               
and   compromise  between   DOT,   the   Alaska  Association   of                                                               
Harbormasters,  communities,  and   Legislators  "who  have  been                                                               
active  in this  area"  contributed to  the  development of  this                                                               
program.  It is  an attempt  to settle  the on-going  State/local                                                               
harbor   dispute   and   an  effort   to   ensure   that   harbor                                                               
infrastructures  would  be   maintained.  Individual  communities                                                               
would establish  harbor rates  at a  level sufficient  to provide                                                               
maintenance and replacement funds.  A community could also choose                                                               
to  support  its  harbor   infrastructure  through  general  fund                                                               
subsidies  or  other  mechanisms.  In  any  case,  the  program's                                                               
requirements  must be  met  in  order to  qualify  for the  match                                                               
program. He understood  that all harbors either have  or would be                                                               
increasing harbor user rates. While  "harbor users are squealing"                                                               
about the higher rates, the increases are necessary.                                                                            
                                                                                                                                
9:25:02 AM                                                                                                                    
                                                                                                                                
Senator Bunde  asked how the  revenues generated from  the marine                                                               
fisheries  business tax  and the  marine fuel  tax are  currently                                                               
utilized.                                                                                                                       
                                                                                                                                
Senator Stedman stated these tax  revenues are deposited into the                                                               
State's general  fund. Currently, fifty percent  of the fisheries                                                               
business  tax,  also  referred  to  as the  "raw  fish  tax",  is                                                               
distributed to affected communities  via the legislative process.                                                               
The Legislature also allocates revenues  from the marine fuel tax                                                               
to  those  communities'  general  funds.  The  bill's  permissive                                                               
language  would allow  the Legislature  to utilize  proceeds from                                                               
these  taxes for  this program.  Nonetheless,  since the  revenue                                                               
generated from these taxes is  currently deposited in the State's                                                               
general  fund, they  are considered  "general fund  assets". Thus                                                               
the program would be funded by a general fund allocation.                                                                       
                                                                                                                                
9:26:03 AM                                                                                                                    
                                                                                                                                
Senator  Bunde concluded  therefore, that  the funding  mechanism                                                               
supporting this program would be the general fund.                                                                              
                                                                                                                                
9:26:13 AM                                                                                                                    
                                                                                                                                
Senator Stedman  reiterated that  the raw  fish tax  is currently                                                               
split between  communities and State's  general fund.  The effort                                                               
would include allowing  harbor users to support  harbor needs, as                                                               
"when people have an equity  position in something, or are paying                                                               
for something, they are more inclined to take care of it".                                                                      
                                                                                                                                
Senator Stedman stressed that no  new community harbors should be                                                               
constructed without a maintenance plan  in place. Efforts must be                                                               
made to break  the long-term cycle in which  the State constructs                                                               
infrastructure,  and then,  due to  a lack  of maintenance,  must                                                               
spend more money to fix it.                                                                                                     
                                                                                                                                
9:27:17 AM                                                                                                                    
                                                                                                                                
Co-Chair  Green  understood  therefore that,  under  the  current                                                               
scenario, a community could argue  that the harbor transferred to                                                               
them from  the State had not  been in the proper  condition, and,                                                               
therefore the  State should pay  for the required  upgrades. "The                                                               
beauty  of  this  is  that  once"  a  community  receives  harbor                                                               
improvement  funding   through  this   program,  they   would  be                                                               
ineligible to receive more.                                                                                                     
                                                                                                                                
Senator Stedman  also clarified that  other forms of  State funds                                                               
provided  to the  community could  not be  utilized as  the local                                                               
match.  The   local  match  must  consist   of  municipal  equity                                                               
generated by such  things as local revenue  bonds, general funds,                                                               
or harbor enterprise funds.                                                                                                     
                                                                                                                                
9:28:59 AM                                                                                                                    
                                                                                                                                
Senator Hoffman asked how the  award process specified in Section                                                               
1  Sec.  29.60.820(c)  page  3  line  13  would  be  implemented;                                                               
specifically whether DOT would develop  regulations in regards to                                                               
how the five priority criteria would be weighted.                                                                               
                                                                                                                                
9:29:54 AM                                                                                                                    
                                                                                                                                
Senator  Stedman stated  DOT would  implement  a ranking  process                                                               
procedure through  which the funds  would be dispensed.  In order                                                               
to not advantage  one community over another,  no community could                                                               
receive more than five million in one year.                                                                                     
                                                                                                                                
9:30:36 AM                                                                                                                    
                                                                                                                                
KIM  CARNOT,  Staff to  Senator  Stedman,  stated that  the  five                                                               
criteria  specified in  subsection  (c) were  developed with  the                                                               
assistance of  DOT and the  Alaska Association  of Harbormasters.                                                               
"DOT would adopt their own regulations."                                                                                        
                                                                                                                                
9:31:16 AM                                                                                                                    
                                                                                                                                
Senator  Dyson voiced  appreciation  for the  efforts exerted  to                                                               
address  harbor needs.  As a  result  of environmental  exposure,                                                               
"harbors  deteriorate  faster,  when neglected,  than  any  other                                                               
public   infrastructure".    He   cited   examples    of   harbor                                                               
deterioration  he had  witnessed. Water  transport infrastructure                                                               
is  important to  residents and  commercial  enterprises in  this                                                               
State.                                                                                                                          
                                                                                                                                
9:32:25 AM                                                                                                                    
                                                                                                                                
Senator Olson  asked whether large  and small communities  in the                                                               
State would equally benefit from the program.                                                                                   
                                                                                                                                
9:32:44 AM                                                                                                                    
                                                                                                                                
Ms. Carnot responded, "any community  is essentially eligible for                                                               
this program".  Communities receiving  harbor transfers  from the                                                               
State would have first priority  for major maintenance needs. New                                                               
construction projects would have lower  priority. The goal of the                                                               
program would  be to  utilize revenues  generated by  the coastal                                                               
communities  from such  things as  the  raw fish  tax to  benefit                                                               
those  communities.  The  five   million  dollar  limitation  was                                                               
specified in  order to  avoid having  a larger  community "absorb                                                               
all"  the  available   funding  to  the  detriment   of  a  small                                                               
community.                                                                                                                      
                                                                                                                                
9:33:40 AM                                                                                                                    
                                                                                                                                
Senator Olson  asked whether  the program  would be  available to                                                               
harbors outside of Southeast Alaska.                                                                                            
                                                                                                                                
Ms.  Carnot remarked  that any  community with  a harbor  or that                                                               
intended to build a harbor would be eligible.                                                                                   
                                                                                                                                
Senator Hoffman  asked whether a  community having solely  a dock                                                               
and no harbor would be eligible.                                                                                                
                                                                                                                                
Senator Stedman  stated that such  things as  breakwaters, dikes,                                                               
dredging operations, and jetties  were intentionally omitted from                                                               
the  bill.  Large  commercial  docks  or  wharfs  would  also  be                                                               
disqualified. The reason for these  exemptions is "the sheer cost                                                               
of them"  as well  as the anticipation  that such  projects might                                                               
qualify for  federal funding. This  program would be  specific to                                                               
communities'  float   systems  and  associated  things   such  as                                                               
electric, water, and parking lots.                                                                                              
                                                                                                                                
Senator  Hoffman asked  whether "quasi-government"  entities such                                                               
as  the  Community  Development  Plan  (CDQ)  groups  in  Western                                                               
Alaska, would  be eligible for  the program. CDQ  communities are                                                               
Bering Sea coastal communities to  whom the State awarded a share                                                               
of the offshore groundfish harvest.                                                                                             
                                                                                                                                
Senator Stedman  affirmed CDQ communities  would qualify  for the                                                               
50  percent  capital  match program.  Transferred  dock  projects                                                               
would receive  first priority, and  any remaining funds  could be                                                               
allocated to support new harbors or expansions.                                                                                 
                                                                                                                                
9:36:55 AM                                                                                                                    
                                                                                                                                
Co-Chair Green  was impressed by the  grant application language,                                                               
specified  in Section  1  Sec. 29.60.810(1)  through  (4) page  2                                                               
lines 7  through 29 that  would require an  eligible municipality                                                               
to   insure  its   harbor   facility,   implement  a   preventive                                                               
maintenance  plan,  and provide  a  fifty  percent match  of  the                                                               
harbor project  cost. These requirements  would be "a  major step                                                               
forward".                                                                                                                       
                                                                                                                                
9:37:55 AM                                                                                                                    
                                                                                                                                
JOHN STONE,  President, Alaska  Association of  Harbormasters and                                                               
Port  Administrators,  and  Harbormaster,  City  and  Borough  of                                                               
Juneau   spoke  in   support  of   the   bill.  The   Association                                                               
participated  in the  development of  the bill  and is  therefore                                                               
familiar with  its provisions.  "It is a  good resolution  to the                                                               
dilemma that  we face and  we believe that  it will, in  the long                                                               
term",  allow  community  harbors to  become  self-supporting  in                                                               
regards to  harbor operations and capital  replacement needs. The                                                               
27 municipal  harbor systems represented by  the Association have                                                               
operated  harbors for  numerous  years and  have established  fee                                                               
programs, such  as enterprise funds allowable  under municipality                                                               
law, to support their operations.                                                                                               
                                                                                                                                
Mr.  Stone   shared  that,  since   the  harbor   facilities  and                                                               
infrastructures were  initially owned by  the State, none  of the                                                               
communities   had   established   replacement   funds   to   meet                                                               
infrastructure needs. The level  of money accompanying the harbor                                                               
transfer  was  insufficient to  address  the  majority of  harbor                                                               
replacement needs as  most of the facilities were "at  the end of                                                               
their  useful life,  beyond economic  repair". Thus,  communities                                                               
were forced to increase local  harbor service fees. For instance,                                                               
existing  fees in  Juneau have  doubled or  tripled and  new fees                                                               
were added. Juneau  would also be issuing a  revenue bond through                                                               
the  Alaska  Bond  Bank  to   further  assist  the  community  in                                                               
addressing  replacement expenses.  Even these  efforts would  not                                                               
entirely address the infrastructure  needs, and therefore, absent                                                               
additional funding  assistance, some facilities  would "disappear                                                               
over time".                                                                                                                     
                                                                                                                                
9:41:04 AM                                                                                                                    
                                                                                                                                
Mr.  Stone communicated  that the  majority of  community harbors                                                               
are facing similar situations and  most have implemented "drastic                                                               
rate  increases". He  warned however,  that  increasing fees  too                                                               
much  would drive  harbor users  away.  While funds  for a  large                                                               
capital project could be raised  over an extended period of time,                                                               
having to address  such projects in a short time  period would be                                                               
challenging.  Unfortunately,  most   of  the  transferred  harbor                                                               
facilities would require replacement needs within a few years.                                                                  
                                                                                                                                
Mr. Stone  stated that a tour  of the harbor facilities  would be                                                               
enlightening  to Committee  members.  Infrastructure needs  would                                                               
include  electrical system  upgrades, addressing  "serious safety                                                               
hazards", and float system replacement.  "The 50 percent matching                                                               
requirement is a good approach."  He reiterated Co-Chair Green 's                                                               
observation that  once a harbor  is funded through  this program,                                                               
it is removed from the list.  Thus, over time, the State would be                                                               
weaned from  supporting community  harbors. That  is the  goal of                                                               
this program.                                                                                                                   
                                                                                                                                
9:42:31 AM                                                                                                                    
                                                                                                                                
Senator  Dyson   reaffirmed  his   earlier  comments   about  the                                                               
importance of harbors to both recreational and commercial users.                                                                
                                                                                                                                
9:43:24 AM                                                                                                                    
                                                                                                                                
Mr.  Stone  declared  "harbor  systems   are  probably  the  best                                                               
business creator in the State".  The system supports recreational                                                               
activities  such as  sailing and  subsistence and  sport fishing.                                                               
Commercial endeavors  include commercial fishing  fleets, fishing                                                               
and sightseeing  charters, and  freight operators.  "A tremendous                                                               
amount of  economic activity is  generated through  the harbors."                                                               
Studies  conducted by  the Association  conclude that  harbors in                                                               
most  communities  "are  a  substantial   portion  of  the  gross                                                               
economic product of those communities".                                                                                         
                                                                                                                                
9:44:34 AM                                                                                                                    
                                                                                                                                
Senator  Olson  asked  for  examples of  the  harbor  fees  being                                                               
charged.                                                                                                                        
                                                                                                                                
Mr.  Stone  responded,  "each  harbor  system  has  its  own  fee                                                               
structure".  Juneau, for  instance, "has  142 different  types of                                                               
fees ….  Basically anybody  that uses one  of our  harbor assets"                                                               
must pay  a user fee. The  harbor fee structure could  be likened                                                               
to that  of a utility company  in that costs "are  allocated" and                                                               
"apportioned to the  user". A public harbor  system fee structure                                                               
typically is more  complicated than a private  facilities' due to                                                               
its need "to strive for equity among the users".                                                                                
                                                                                                                                
Senator  Olson asked  whether  a  person in  a  rowboat would  be                                                               
required to pay a fee.                                                                                                          
                                                                                                                                
Mr. Stone  replied that moorage  fees would be assessed  were the                                                               
boat tied to the dock more than four hours.                                                                                     
                                                                                                                                
9:46:04 AM                                                                                                                    
                                                                                                                                
Senator Olson  asked whether  the program  would be  available to                                                               
private harbors.                                                                                                                
                                                                                                                                
Ms. Carnot  replied no;  this grant program  would be  limited to                                                               
municipalities with public harbors.                                                                                             
                                                                                                                                
9:46:26 AM                                                                                                                    
                                                                                                                                
KATHIE WASSERMAN,  Deputy Director, Alaska Municipal  League, and                                                               
former Mayor  of Pelican,  spoke to  Senator Dyson's  remarks. In                                                               
many small communities,  such as Pelican, the harbor  is the only                                                               
way to  access the town.  In those  cases, it is  imperative that                                                               
the harbor facility be maintained.  She was mayor of Pelican when                                                               
the  State transferred  that  harbor to  the  community, and  she                                                               
could attest to  the deteriorated condition of  the facility. The                                                               
money  each community  received  in the  harbor transfer  program                                                               
"was based on  the value of the harbor". Thus  the money provided                                                               
to  Pelican was  a meager  amount, as  the harbor  was not  worth                                                               
much. "It  was sinking in  most places." While the  community was                                                               
able  to fix  a  portion  of the  harbor,  "three  or four  major                                                               
fingers" could  not be addressed.  "The 50/50 match program  is a                                                               
very good way to go", as  communities would have ownership of the                                                               
project. Even  though most  communities would  prefer to  be self                                                               
reliant  rather than  being supported  by  the State,  assistance                                                               
would be appreciated.                                                                                                           
                                                                                                                                
In  response  to  a  remark from  Senator  Bunde,  Ms.  Wasserman                                                               
reiterated that communities  such as Pelican never  desired to be                                                               
solely  reliant on  State funding.  Nonetheless State  assistance                                                               
through this program would be appreciated.                                                                                      
                                                                                                                                
9:48:26 AM                                                                                                                    
                                                                                                                                
Co-Chair  Green shared  having received  numerous harbor  project                                                               
requests for  the FY  2007 capital budget  bill. The  majority of                                                               
those  requests   sought  100  percent  State   funding  support.                                                               
Continuing, she  noted that the  permissive language of  the bill                                                               
would not obligate the Legislature to fund the program.                                                                         
                                                                                                                                
Senator Bunde  spoke against  the bill.  In essence  this program                                                               
would  provide three-quarters  of the  revenues collected  by the                                                               
raw fish  tax to  communities that already  receive raw  fish tax                                                               
proceeds.  Enactment  of  this   program  would  "create  another                                                               
entitlement". Contrary  to Ms. Wasserman's position,  he believed                                                               
communities would "like to be 100 percent State supported".                                                                     
                                                                                                                                
Senator Bunde determined the fiscal  note to be incomplete, as it                                                               
does not  include grant projections. The  State providing harbors                                                               
to communities has  been a long-term frustration to  him, as many                                                               
communities acted  irresponsibility and allowed their  harbors to                                                               
deteriorate, and  then asked the  State for more money  to repair                                                               
them.  He  suspected  that  communities  receiving  five  million                                                               
dollars  through  this program,  would,  in  the future,  request                                                               
further assistance.  If a harbor  was "essential to  a community,                                                               
they  must  live up  to  the  obligation".  The State  and  other                                                               
entities are forced to rely on user fees to support activities.                                                                 
                                                                                                                                
9:50:38 AM                                                                                                                    
                                                                                                                                
Senator  Hoffman begged  to  differ;  improved harbor  facilities                                                               
could generate more  money to the State. The  watercraft fuel tax                                                               
and  the fisheries  business  tax are  "directly  related to  the                                                               
activities" and are "an indirect  user fee". Good dock facilities                                                               
would attract fishing  fleets, which would support  the two taxes                                                               
that  would fund  this  program. Thus,  the  State would  receive                                                               
additional  money by  improving  harbor facilities.  It would  be                                                               
appropriate for the tax revenues  deposited into the general fund                                                               
to assist this program.                                                                                                         
                                                                                                                                
9:51:46 AM                                                                                                                    
                                                                                                                                
Senator Olson also spoke in  support of the bill. Harbors provide                                                               
safe  havens to  boaters,  freighters, and  fishing fleets.  This                                                               
program is necessary.                                                                                                           
                                                                                                                                
Co-Chair  Wilken moved  to report  the bill  from Committee  with                                                               
individual recommendations and accompanying fiscal notes.                                                                       
                                                                                                                                
Senator Bunde objected.                                                                                                         
                                                                                                                                
Senator  Bunde  suggested  that,  rather  than  enacting  another                                                               
entitlement program,  each harbor  should implement its  own fish                                                               
tax  to  support  its  harbor  system.  This  bill  furthers  his                                                               
frustration   with  what   he  has   termed  "the   Great  Alaska                                                               
Disconnect. There's always too much  State funding unless it's in                                                               
someone's  special interest  … The  State should  provide endless                                                               
funds" without implementing  any taxes or use of  the earnings of                                                               
the  Permanent Fund.  Curtailing  State support  of things  would                                                               
assist in making people "become more realistic".                                                                                
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN  FAVOR: Senator  Dyson, Senator  Hoffman,  Senator Olson,  Co-                                                               
Chair Wilken, and Co-Chair Green                                                                                                
                                                                                                                                
OPPOSED: Senator Bunde                                                                                                          
                                                                                                                                
ABSENT: Senator Stedman                                                                                                         
                                                                                                                                
The motion PASSED (5-1-1)                                                                                                       
                                                                                                                                
CS SB  291(CRA) was  REPORTED from  Committee with  previous zero                                                               
fiscal  note  #1 dated  March  2,  2006  from the  Department  of                                                               
Transportation and Public Facilities.                                                                                           
                                                                                                                                
AT EASE 9:54:40 AM / 9:54:51 AM                                                                                               
                                                                                                                                
                                                                                                                                
     CS FOR SENATE BILL NO. 315(L&C)                                                                                            
     "An Act relating to the disposition of unredeemed property;                                                                
     and providing for an effective date."                                                                                      
                                                                                                                                
                                                                                                                                
This was  the first hearing for  this bill in the  Senate Finance                                                               
Committee.                                                                                                                      
                                                                                                                                
ANNETTE SKIBINSKI,  Staff to Senator  John Cowdery,  Chair, Rules                                                               
Committee,  which   sponsored  the  bill,  explained   that  this                                                               
legislation  would  amend  current State  Statute,  AS  08.76.040                                                               
Disposition of  unredeemed property.  This Statute  addresses how                                                               
property  left  at  a  pawnshop  after  the  unredeemed  property                                                               
deadline could  be valued  and sold.  The provisions  in question                                                               
were  established in  1981, and  some of  them, specifically  the                                                               
pawn loan limit, were revised  overtime. Unfortunately, due to an                                                               
oversight,  when the  pawn loan  limit was  increased, the  ratio                                                               
mechanism for  determining the sale  price of  unclaimed property                                                               
was not  adjusted. Thus,  the purpose  of this  bill would  be to                                                               
restore the  original ratio between  the pawn loan limit  and the                                                               
value of the unredeemed property.  She stressed that the proposed                                                               
change is  specific to the sale  price of the property  and would                                                               
not alter pawn loan limit language.                                                                                             
                                                                                                                                
Co-Chair  Green asked  for an  example of  how the  ratio formula                                                               
would work.                                                                                                                     
                                                                                                                                
Ms. Skibinski  exampled a  wedding ring  valued at  $2,000. Under                                                               
current  law,  the  maximum  amount  a  pawnshop  could  loan  an                                                               
individual  for that  item would  be $500.  The individual  would                                                               
have 60 days  to repay the $500 loan, plus  interest, and reclaim                                                               
the ring. Otherwise,  after 60 days, the pawnshop  could sell it.                                                               
Current ratio provisions would require  the pawnshop to split any                                                               
profit  above  a   sale  price  of  $400   with  the  individual.                                                               
Therefore, in order to recoup the  $500 the pawnshop paid for the                                                               
ring, a  sale price of  $600 would  be required. This  bill would                                                               
restore the  price terms  to the  original two  to one  pawn loan                                                               
limit/unredeemed property  value ratio.  Thus, the  trigger point                                                               
at which the proceeds must be  split between the pawnshop and the                                                               
individual for a ring pawned for $500 would be $1,000.                                                                          
                                                                                                                                
9:57:53 AM                                                                                                                    
                                                                                                                                
Senator Bunde understood  that while the amount  a pawnshop could                                                               
loan had been  increased, the point at which  the money generated                                                               
from the  sale of an unredeemed  item must be split  had not been                                                               
addressed.  Thus,  this bill  would  restore  the original  ratio                                                               
limit.                                                                                                                          
                                                                                                                                
9:58:43 AM                                                                                                                    
                                                                                                                                
Co-Chair  Green asked  whether there  was any  opposition to  the                                                               
bill.                                                                                                                           
                                                                                                                                
Ms. Skibinski replied in the  negative. The bill was drafted with                                                               
the  assistance of  the Commercial/Fair  Business Section  of the                                                               
Department of Law  and the Department of  Commerce, Community and                                                               
Economic Development  (DCED). DCED  suggested the bill  contain a                                                               
provision  that   would  require  a  pawnshop   to  disclose  the                                                               
information  about  unredeemed  property to  an  individual.  The                                                               
Senate  Labor  & Commerce  Committee  included  this language  in                                                               
their bill.                                                                                                                     
                                                                                                                                
Co-Chair Green acknowledged.                                                                                                    
                                                                                                                                
Co-Chair  Wilken moved  to report  the bill  from Committee  with                                                               
individual recommendations and accompanying fiscal notes.                                                                       
                                                                                                                                
There  being  no objection,  CS  SB  315(L&C) was  REPORTED  from                                                               
Committee with previous zero fiscal  note #1 dated April 14, 2006                                                               
from  the   Department  of   Commerce,  Community   and  Economic                                                               
Development.                                                                                                                    
                                                                                                                                
9:59:55 AM                                                                                                                    
                                                                                                                                
                                                                                                                                
     CS FOR SENATE BILL NO. 274(STA)                                                                                            
     "An Act relating to the disposition of forfeited, surplus,                                                                 
     and unclaimed firearms by the state."                                                                                      
                                                                                                                                
                                                                                                                                
This was  the first hearing for  this bill in the  Senate Finance                                                               
Committee.                                                                                                                      
                                                                                                                                
Senator Dyson,  the bill's sponsor,  informed the  Committee that                                                               
this bill  would allow  the State to  sell confiscated  but legal                                                               
firearms for  "a reasonable  return". This  would be  contrary to                                                               
previous  [unspecified]  administrations' actions  of  destroying                                                               
such  items.  Both  the  Department  of  Public  Safety  and  the                                                               
Department  of  Administration   support  the  proposed  disposal                                                               
methodology.                                                                                                                    
                                                                                                                                
10:01:33 AM                                                                                                                   
                                                                                                                                
Senator  Dyson stated  that, while  the  majority of  confiscated                                                               
guns could  be legally  sold to  the public, some  guns are  of a                                                               
class that could  only be sold to people holding  Class 3 Firearm                                                               
Dealer licenses.  The "very  few" firearms  that are  illegal for                                                               
anyone  to own,  primarily due  to  such things  as their  barrel                                                               
being  cut off  or their  serial number  being defaced,  would be                                                               
disassembled.  The  illegal  portions   would  be  destroyed  and                                                               
remaining legal components would be available to the public.                                                                    
                                                                                                                                
Senator Dyson  also noted  the bill would  continue to  allow the                                                               
Department  of Public  Safety to  negotiate with  firearm dealers                                                               
for "a trade-in allowance" for  new equipment in exchange for the                                                               
confiscated firearm inventory. This  practice would continue with                                                               
the  new provision  that an  annual report  of the  value of  the                                                               
trade-in items  and the  items received  via that  transaction be                                                               
provided.                                                                                                                       
                                                                                                                                
Senator  Dyson  communicated  that this  legislation  would  also                                                               
address  the  liability issue  that  was  the basis  of  previous                                                               
administrations'  argument to  destroy  confiscated firearms.  It                                                               
would clearly  denote that  "the State has  no more  liability on                                                               
selling of a  firearm than they do  on a pick-up truck  or a dump                                                               
truck or anything else that they surplus".                                                                                      
                                                                                                                                
Co-Chair  Green  recalled  the liability  issue  being  addressed                                                               
previously. However, the  effort must have been in the  form of a                                                               
resolution.                                                                                                                     
                                                                                                                                
Senator Dyson affirmed.                                                                                                         
                                                                                                                                
10:04:06 AM                                                                                                                   
                                                                                                                                
Senator Olson asked whether there  has been any opposition to the                                                               
bill.                                                                                                                           
                                                                                                                                
Senator Dyson responded in the negative.                                                                                        
                                                                                                                                
Senator Olson specified that his  question primarily pertained to                                                               
the position of firearm manufacturers.                                                                                          
                                                                                                                                
Senator Dyson stated that firearm  manufacturers have not weighed                                                               
in on the issue. This  legislation would allow the general public                                                               
to  participate  in  the  purchase of  these  items  rather  than                                                               
continuing to  limit it to  individuals holding  dealer licenses,                                                               
as is the current practice.                                                                                                     
                                                                                                                                
Senator Dyson shared  the understanding that, in the  past, a few                                                               
dealers colluded  to hold prices  down by agreeing  beforehand as                                                               
to who would  bid on certain parcels. As a  result, the State was                                                               
receiving  "significantly  less  than   the  real  value  of  the                                                               
weapons".  He  reiterated  that  this  allegation  has  not  been                                                               
confirmed. Nonetheless,  allowing more  people to  participate in                                                               
the  firearm  auction  would  enhance   the  State's  ability  to                                                               
generate additional value from the surplus firearm effort.                                                                      
                                                                                                                                
10:05:33 AM                                                                                                                   
                                                                                                                                
Senator Bunde moved to report the bill from Committee with                                                                      
individual recommendations and accompanying fiscal notes.                                                                       
                                                                                                                                
There  being no  objection, CS  SB  274 (STA)  was REPORTED  from                                                               
Committee  with previous  $22,500 fiscal  note #1  dated February                                                               
23, 2006  from the  Department of Administration  and a  new zero                                                               
fiscal note  dated March 31,  2006 from the Department  of Public                                                               
Safety.                                                                                                                         
                                                                                                                                
                                                                                                                                
Co-Chair Green noted the Committee would be reconvening at 5:00                                                                 
pm for public testimony on the FY 2007 capital budget.                                                                          
                                                                                                                                
ADJOURNMENT                                                                                                                 
                                                                                                                                
Co-Chair Lyda Green adjourned the meeting at 10:06:32 AM.                                                                     

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