Legislature(2009 - 2010)SENATE FINANCE 532
04/08/2010 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB294 | |
| SB300 | |
| SB213 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 294 | TELECONFERENCED | |
| + | SB 300 | TELECONFERENCED | |
| + | SB 213 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
April 8, 2010
9:10 a.m.
9:10:27 AM
CALL TO ORDER
Co-Chair Stedman called the Senate Finance Committee
meeting to order at 9:10 a.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Charlie Huggins, Vice-Chair
Senator Johnny Ellis
Senator Dennis Egan
Senator Donny Olson
Senator Joe Thomas
MEMBERS ABSENT
None
ALSO PRESENT
Mike Pawlowski, Staff, Senator Lesil McGuire; Charles O.
Swanton, Director, Division of Sport Fish, Department of
Fish and Game; Ted Leonard, Executive Director, Alaska
Industrial Development and Export Authority (AIDEA),
Department of Commerce, Community, & Economic Development;
Mark Davis, Alaska Industrial Development and Export
Authority (AIDEA), Department of Commerce, Community, &
Economic Development; Greg, Winegar, Director of
Investment, Alaska Industrial Development and Export
Authority (AIDEA), Department of Commerce, Community, &
Economic Development; George Ascott, Staff, Senator Bill
Wielechowski; Eddy Jeans, Director, School Finances and
Facilities, Department of Education and Early Development
PRESENT VIA TELECONFERENCE
Melvin Grove, Big Lake; Robin Stilwell, Director, Food Bank
of Alaska, Anchorage; Dean Hamburg, Alaska School Nutrition
Association, Soldotna
SUMMARY
SB 213 FUNDING FOR SCHOOL MEALS
SB 213 was heard and HELD in Committee for
further consideration.
SB 294 SPORT FISH GUIDE LICENSES
SB 294 was heard and HELD in Committee for
further consideration.
SB 300 AIDEA LOANS
SB 300 was heard and HELD in Committee for
further consideration.
9:10:50 AM
SENATE BILL NO. 294
"An Act repealing the termination date of the
licensing of sport fishing operators and sport fishing
guides; and providing for an effective date."
MIKE PAWLOWSKI, STAFF, SENATOR LESIL MCGUIRE, explained
that SB 294 is a repeal of the sunset for the sport fish
guide licensing program. He referred to the original bill,
HB 452, enacted in 2004, a copy of which is in members'
packets (copy on file).
Mr. Pawlowski continued to explain that the program created
basic standards for sport fish guide operators, a licensing
system for sport fish guide operators and sport fish
guides, and created a log book program that has proved
important in the collection of data to manage the resource.
The program was extended for one year last session. This
bill would repeal the sunset date and allow the program to
remain in place.
9:12:44 AM
Senator Olson asked for an explanation of the justification
of the sunset repeal. Mr. Pawlowski clarified that the
licensing program does not have an accompanying board, but
is a license within the statute itself. That is the reason
it was viewed differently than a traditional board or
commission. Senator Olson inquired how the effectiveness of
the program will be evaluated. Mr. Pawlowski said that
there is regular reporting on the program and the regular
budget process provides for an evaluating process. Senator
Olson asked if the number of licenses has increased,
decreased, or remained the same. Mr. Pawlowski offered to
find out.
Co-Chair Stedman noted one fiscal note from the Department
of Fish and Game reflecting the on-going cost of continuing
the licensing program at $437,600. Funding currently exists
in the FY 11 budget.
9:14:28 AM
CHARLES O. SWANTON, DIRECTOR, DIVISION OF SPORT FISH,
DEPARTMENT OF FISH AND GAME, thanked the committee and the
sponsor. He related that the legislation sets guides,
standards, and data collection for management. There have
been changes to the program in the last year, such as the
addition of scanning technology that will improve the
timeliness of data collection. He addressed Senator Olson's
question and stated that there has been a slight decrease
in the last two years in the number of licenses.
Senator Thomas asked if there were any specific concerns
about the reporting requirements. He wondered if the fish
logs could be simplified.
Co-Chair Stedman requested information about the current
structure and where the department wants to go with it. Mr.
Swanton reported that in the saltwater program, the
department reduced the size of the log book and simplified
the data requirements. The department also implemented a
scanning program for the saltwater log book and plans to do
so for the freshwater log book.
9:18:20 AM
Senator Thomas asked if the same would be done for the
freshwater requirements. Mr. Swanton concurred.
Senator Olson asked how the repeal of the sunset date would
affect the other fisheries. Mr. Swanton believed that the
collection of good quality fisheries data, regardless of
the use of it, was a cornerstone of the department's
mission.
Senator Olson asked if there was opposition by the other
two fisheries against repealing the sunset date. Mr.
Swanton said he was not aware of any opposition.
9:20:00 AM
MELVIN GROVE, BIG LAKE (via teleconference), testified in
opposition to the bill, primarily due to the cost. He had
no problems with the data collection, but was opposed to
the $100 fee for the reporting program. He maintained that
the program was too expensive. He suggested implementing a
simple scanning program in order to save money. He urged
the committee to retain the sunset in the original bill.
9:24:10 AM
Co-Chair Stedman set the bill aside.
SB 294 was heard and HELD in Committee for further
consideration.
SENATE BILL NO. 300
"An Act relating to loan participations and
development finance projects of the Alaska Industrial
Development and Export Authority; and relating to
loans from the rural development initiative fund."
9:25:02 AM
TED LEONARD, EXECUTIVE DIRECTOR, ALASKA INDUSTRIAL
DEVELOPMENT AND EXPORT AUTHORITY (AIDEA), DEPARTMENT OF
COMMERCE, COMMUNITY, & ECONOMIC DEVELOPMENT, thanked the
committee for hearing the bill. He reported that AIDEA has
been going through a strategic process for the last year to
improve and increase its effectiveness and add new tools to
the organization that can help promote economic
development. The changes requested in this statute are the
first steps for AIDEA to improve its programs and add
another assisting tool for economic development.
Mr. Leonard reported that the first section of the bill is
intended to modernize the way that AIDEA sets rates for
loans that are funded through internal funds. One of the
main ways that AIDEA promotes economic development is
providing Alaska businesses long-term capital at affordable
rates for commercial development expansion. Current rates
are set by analyzing the current market environment. He
related that the bond market has been unstable over the
last two years, resulting in a fluctuation of AIDEA's rates
between 6 percent and 10 percent. Banks have been fairly
stable. This mechanism has taken AIDEA out of the market
several times when it should have been helping Alaskan
businesses.
9:27:39 AM
Mr. Leonard explained that the second section of the bill
adds an interest rebate program, which would allow for a
rebate on certain loan participations based on specific
criteria set through regulations. It would allow businesses
that are investing in difficult environments a chance to
have some relief on their cash flow for the first five
years.
Mr. Leonard reported that the third section clarifies in
statute that AIDEA has the ability to own a part of an
infrastructure investment instead of the whole. Clarifying
the statute will help AIDEA in the development of larger
infrastructure projects such as a port addition.
Mr. Leonard explained that Sections 4 and 5 relate to the
rural development initiative fund and are to encourage
better use of the program in rural areas.
9:29:34 AM
MARK DAVIS, ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT
AUTHORITY (AIDEA), DEPARTMENT OF COMMERCE, COMMUNITY, &
ECONOMIC DEVELOPMENT, explained that the first section of
the bill would change the way in which AIDEA sets its
minimum interest rate under the commercial finance program,
which in previous years was tied to the bond market. In
2008 the market changed and AIDEA's rates began to rise,
making it non-competitive. The bill proposes to use a
comparable financial security. The minimum rate for the
program would be set by looking at transparent public
indexes that track the cost of money. Those would include
indexes such as the Federal Home Loan Bank of Seattle, the
Federal Farm Credit Banks Funding Corporation Funding Cost
Index, London Interbank Offered Rate (LIBOR), and Fanny
May. He emphasized that the bond market is not where the
state wants to be.
9:31:55 AM
Co-Chair Stedman requested a clarification of terms. Mr.
Davis elaborated on the definition of "points"; one point
is one percent. Co-Chair Stedman asked what LIBOR was. Mr.
Davis said it was the London Interbank Offered Rate, the
cost of funds used by the European markets. Currently, the
yield on treasury T bills is being tracked against the
LIBOR to get a feel for the economy. Mr. Davis continued to
say that the first section proposes to allow AIDEA to be
more competitive. He emphasized the good qualities of the
program and the numerous commercial loans and jobs funded.
9:33:11 AM
Mr. Davis explained the second part of the bill, which is a
rebate program under the same loan participation. Incentive
programs at other institutions were examined and it was
determined that incentive programs worked to further
economic development. The bill proposes an up-to-one
percent rebate for the first five years of the loan with a
cap of 5 percent of the portfolio, which is very safe
lending. The rebate could be given if it would create jobs,
for rural development, or to achieve other economic
criteria set forth in regulation. Examples would be for
development in distressed areas or the creation of new
technologies or for alternative energy. He predicted that
the rebates would bring in new and novel types of lending.
Mr. Davis turned to the third part of the bill which deals
with the development finance program under which AIDEA
builds large projects. Currently, the statutes are at odds.
One part, AS 44.88.05, says the authority has the power to
"acquire an interest in a project as necessary or
appropriate". Another part of the same statute, AS
44.88.010a says AIDEA can "incur debt to own and operate
facilities". The decision had been made by means of
Department of Law interpretations, that AIDEA could only
own a complete portion of a project. He used the Red Dog
Mine as an example, where AIDEA only owns the
transportation system, but not the mine. In current
markets, most development corporations like AIDEA are
investing in percentages of projects and looking for
private partnerships. The proposal would clarify the
statute and allow AIDEA to acquire an interest and become a
partner with other investors and partners.
9:36:12 AM
Senator Huggins voiced concern about the governments owning
a part of a project. He asked how the state would limit its
liability if it was only a part owner. Mr. Davis opined
that legal documentation would have to provide AIDEA with
an exit strategy in all cases.
Senator Thomas asked if the clarification of participation,
ownership, and management of the economic development
account was found on page 3, lines 10-17. Mr. Davis said
that was correct.
9:38:03 AM
Co-Chair Stedman referred to page 3, lines 25-27, and asked
why it was important that a person could not get a second
loan until a previous loan was paid off. Mr. Davis
suggested Mr. Winegar answer.
GREG, WINEGAR, DIRECTOR OF INVESTMENT, ALASKA INDUSTRIAL
DEVELOPMENT AND EXPORT AUTHORITY (AIDEA), DEPARTMENT OF
COMMERCE, COMMUNITY, & ECONOMIC DEVELOPMENT, explained that
AIDEA is attempting to tie the maximum to a dollar amount,
as opposed to the number of loans because some businesses
will take out a small loan to get started and then may need
an additional loan. The current statute allows for only one
loan. The intention is to provide the flexibility to loan
up to the full dollar amount.
9:39:31 AM
Senator Olson asked why people in rural areas could not
spread the risk, as well as the benefits, under this
program. Mr. Davis explained that is the intention of the
section to allow for more partnerships and allow everyone
to have "skin in the game". Senator Olson assumed the
transportation system in the Red Dog area would have some
input from the borough or from the local entity. He asked
if AIDEA would support that idea. Mr. Davis said he would
have to see the amendment first. If it is a good business
decision, AIDEA would tend to support it.
SB 300 was heard and HELD in Committee for further
consideration.
9:42:58 AM
SENATE BILL NO. 213
"An Act providing for funding for school lunch and
breakfast."
GEORGE ESCOTT, STAFF, SENATOR BILL WIELECHOWSKI, thanked
the committee and the sponsors for bringing the legislation
to Senator Wielechowski's attention. He explained that SB
213 will provide a state match for schools participating in
the federal Free and Reduced Price School Breakfast and
Lunch Program. It will encourage more schools to provide
nutritious meals for underprivileged children and allow
schools that already do so to improve their programs. For
every free and reduced-price breakfast the federal program
funds, the state will provide a match of 35 cents. For
every free and reduced-price lunch the federal program
funds, the state will provide a match of 15 cents.
Mr. Escott reported that a large majority of states make
some contribution to school lunches and breakfasts. Alaska
is one of the few that does not. Under this legislation
most schools will receive some assistance through a funding
formula based on the applicable school district cost
factor. Numerous studies have documented that eliminating
hunger in children increases school performance, increases
school attendance, decreases school violence, and combats
obesity. By dealing with these programs now, the state will
prevent more costly future problems. Mr. Escott added that
there were numerous letters of support for this
legislation.
9:45:41 AM
Co-Chair Stedman noted one fiscal note from the Department
of Education and Early Development reflecting the cost of
establishing the program for $1,671,30 in general funds for
FY 11.
9:46:07 AM
ROBIN STILWELL, DIRECTOR, FOOD BANK OF ALASKA, ANCHORAGE
(via teleconference), spoke of the advantages of funding
breakfasts and lunches at school. She related the cuts in
federal funds and how some schools are run under a fund
deficit. She used Haines as an example of a school that
does provide meals, but that does not participate in the
National School Lunch Program. In some communities the
schools do not receive a federal match because they don't
have the staff to administer the federal program. She
estimated that over 10,000 meals are missed each day by
Alaskan students that eligible for reduced meal programs.
She testified in support of SB 213.
9:48:42 AM
DEAN HAMBURG, ALASKA SCHOOL NUTRITION ASSOCIATION, SOLDOTNA
(via teleconference), spoke in favor of SB 213. He related
facts about USDA support to schools for meals. He said that
40 percent of Alaskan families qualify for school meals. He
called SB 213 a meaningful and effective support to assist
with school meal programs.
9:50:57 AM
Senator Huggins noted that he and others support quality
nutrition programs in the schools. He voiced concern
whether the increase in funding would increase the quality
of the meals. He referred to an example of a meal he
thought was unhealthy. He wondered what controls were used
to ensure quality meals.
Mr. Hamburg reported that USDA school meal programs are
current with nutrition requirements and are closely aligned
with standards. He stated that his program is an example of
good nutrition.
9:55:28 AM
Co-Chair Stedman questioned the inequities in the fiscal
note.
EDDY JEANS, DIRECTOR, SCHOOL FINANCES AND FACILITIES,
DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT, could not
answer why there was a wide discrepancy in the number of
school lunches from each district. Co-Chair Stedman
commented on how important school meals are. He noted a
higher incidence of meals served in rural areas.
ADJOURNMENT
The meeting was adjourned at 9:58 AM.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 294 Sponsor Statement on Letterhead.PDF |
SFIN 4/8/2010 9:00:00 AM |
SB 294 |
| SB 294 Sportfish program Summary.pdf |
SFIN 4/8/2010 9:00:00 AM |
SB 294 |
| SB 294 LICENSING REAUTH BRIEF March102010final (2).doc |
SFIN 4/8/2010 9:00:00 AM |
SB 294 |
| SB 294 2010 HB 452 Enrolled.pdf |
SFIN 4/8/2010 9:00:00 AM |
HB 452 SB 294 |
| SB 294 2007Summary.pdf |
SFIN 4/8/2010 9:00:00 AM |
SB 294 |
| SB294-DFG-SFD-03-10-10.pdf |
SFIN 4/8/2010 9:00:00 AM |
SB 294 |
| SB0294A.pdf |
SFIN 4/8/2010 9:00:00 AM |
SB 294 |
| SB300SupplementalBackup.pdf |
SFIN 4/8/2010 9:00:00 AM |
SB 300 |
| SB300SectionalAnalysis.pdf |
SFIN 4/8/2010 9:00:00 AM |
SB 300 |
| SB 213 Sponsor Statement.pdf |
SFIN 4/8/2010 9:00:00 AM |
SB 213 |
| SB 213 Research Report.pdf |
SFIN 4/8/2010 9:00:00 AM |
SB 213 |
| SB213 Letters of Support.pdf |
SFIN 4/8/2010 9:00:00 AM |
SB 213 |
| SB213 Fiscal Note.pdf |
SFIN 4/8/2010 9:00:00 AM |
SB 213 |
| SB213 Fact Sheets.pdf |
SFIN 4/8/2010 9:00:00 AM |
SB 213 |
| SB213.pdf |
SFIN 4/8/2010 9:00:00 AM |
SB 213 |
| How SB 213 Works.pdf |
SFIN 4/8/2010 9:00:00 AM |
SB 213 |
| CSSB213 (ED).pdf |
SFIN 4/8/2010 9:00:00 AM |
SB 213 |