Legislature(2003 - 2004)

05/10/2004 09:51 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                              MINUTES                                                                                         
                     SENATE FINANCE COMMITTEE                                                                                 
                           May 10, 2004                                                                                       
                              9:51 AM                                                                                         
                                                                                                                                
                                                                                                                                
TAPES                                                                                                                       
                                                                                                                                
SFC-04 # 114,  Side A                                                                                                           
SFC 04 # 114,  Side B                                                                                                           
SFC 04 # 115,  Side A                                                                                                           
                                                                                                                                
CALL TO ORDER                                                                                                               
                                                                                                                                
Co-Chair Gary Wilken convened  the meeting at approximately 9:51 AM.                                                            
                                                                                                                                
PRESENT                                                                                                                     
                                                                                                                                
Senator Gary Wilken, Co-Chair                                                                                                   
Senator Lyda Green, Co-Chair                                                                                                    
Senator Con Bunde, Vice Chair                                                                                                   
Senator Fred Dyson                                                                                                              
Senator Ben Stevens                                                                                                             
Senator Donny Olson                                                                                                             
                                                                                                                                
Also  Attending:  SENATOR SCOTT  OGAN;  REPRESENTATIVE  CARL  GATTO;                                                          
REPRESENTATIVE  HUGH FATE;  REPRESENTATIVE  JIM HOLM; CINDY  CASHEN,                                                            
Executive  Director,  Mothers  Against  Drunk  Driving;  DON  SMITH,                                                            
Administrator,  Alaska Highway  Safety Office;  JIM POUND,  Staff to                                                            
Representative  Bud Fate;  TIM BARRY, Staff  to Representative  Bill                                                            
Williams;  RYAN MCKINSTER,  Staff to Representative  Lesil  McGuire;                                                            
MATT  RUDIG,   Staff  to   Representative   Jim  Holm;  PAUL   FUHS,                                                            
Representative, Alaska Trademark Shellfish Industry                                                                             
                                                                                                                                
Attending  via Teleconference:  From  an Offnet  Site: NANCY  WELCH,                                                          
Special  Assistant,  Office  of  the  Commissioner,   Department  of                                                            
Natural Resources                                                                                                               
                                                                                                                                
SUMMARY INFORMATION                                                                                                         
                                                                                                                                
HB 342-DRIVING UNDER INFLUENCE/ALCOHOL OFFENSES                                                                                 
                                                                                                                                
The  Committee  heard  from  the  bill's  sponsor  and  took  public                                                            
testimony. The bill reported from Committee.                                                                                    
                                                                                                                                
HB 319-REC.CABIN SITES/ LOTTERY SALE/RTS. RESERV                                                                                
                                                                                                                                
The Committee  heard from the sponsor and the Department  of Natural                                                            
Resources.  One  amendment  was withdrawn  from  consideration,  one                                                            
amendment-to-an-amendment  failed to be adopted, and  two amendments                                                            
were adopted.  A committee substitute  was reported from  Committee.                                                            
                                                                                                                                
HB 495-4 DAM POOL JOINT ACTION AGENCY                                                                                           
                                                                                                                                
The Committee heard from  the sponsor and adopted one amendment. The                                                            
bill was reported from Committee.                                                                                               
                                                                                                                                
HB 338-ATTENDANCE AT PUBLIC SCHOOL                                                                                              
                                                                                                                                
The Committee  heard  from the sponsor  and reported  the bill  from                                                            
Committee.                                                                                                                      
                                                                                                                                
HB 341-DIVE FISHERY MANAGEMENT ASSESSMENT                                                                                       
                                                                                                                                
The Committee  heard  from the  sponsor and  the industry.  Previous                                                            
action on the adoption  of a committee substitute was rescinded, and                                                            
the original version of the bill was reported from Committee.                                                                   
                                                                                                                                
HB 461-EMERGENCY SERVICES DISPATCH/911 SURCHARGE                                                                                
                                                                                                                                
The Committee heard from  the sponsor. One amendment was offered but                                                            
withdrawn from consideration. The bill was held in Committee.                                                                   
                                                                                                                                
HB 552-GAMBLING & GAMING                                                                                                        
                                                                                                                                
This bill was scheduled but not heard.                                                                                          
                                                                                                                                
                                                                                                                                
     CS FOR HOUSE BILL NO. 342(FIN) am                                                                                          
     "An Act relating  to driving while under the  influence, to the                                                            
     definition   of  'previously  convicted,'  to  alcohol-related                                                             
     offenses,  to ignition interlock  devices, and to the  issuance                                                            
     of limited  driver's licenses;  and providing for an  effective                                                            
     date."                                                                                                                     
                                                                                                                                
                                                                                                                                
This was  the second  hearing for  this bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair  Wilken   noted  that  this   bill  would  strengthen   the                                                            
consequences of Driving  Under the Influence (DUI) and would provide                                                            
Wellness and Therapeutic  Courts more authority. He  pointed out the                                                            
CS  HB 342(FIN)  am,  Version  23-LS1292\W.A  and  its accompanying                                                             
fiscal notes are before the Committee.                                                                                          
                                                                                                                                
CINDY CASHEN,  Executive Director,  Juneau Chapter, Mothers  Against                                                            
Drunk Driving  (MADD), spoke  in favor of  the legislation  as "that                                                            
ignition interlock  systems will be one of the tools  in the toolbox                                                            
to prevent drunk  driving." She testified that studies  conducted in                                                            
Maryland, California,  and Canada indicate that 50  to 90-percent of                                                            
offenders who  were sentenced to using  a ignition interlock  device                                                            
"did not drive  drunk two years after  their license was  given back                                                            
to them." She  stressed that this  device is effective and  that the                                                            
states utilizing  the device  in their DUI  sentencing like  it. She                                                            
noted that the cost of  the interlock device is less than the $1,500                                                            
fine imposed  for a first DUI offense.  She also noted that  a judge                                                            
has the authority  to levy a fine  above $1,500, depending  upon the                                                            
offender's blood alcohol content (BAC) level.                                                                                   
                                                                                                                                
DON SMITH,  Administrator,  Alaska Highway  Safety Office,  spoke in                                                            
favor of the  bill. He noted that  because legislation such  as this                                                            
have not been  enacted, Alaska's highways have been  ineligible, for                                                            
the past  several years,  to receive approximately  $1.5 million  of                                                            
federal  highway  concrete  funding  that is  available  to  support                                                            
highway  construction  projects. However,  he clarified  that  while                                                            
this  money  could  not  be  allocated  to  support   State  highway                                                            
construction  projects, as  intended, "it has  not been lost"  as it                                                            
was transferred  to support highway safety projects.  In conclusion,                                                            
he  noted  that  this legislation   "is a  high  priority  with  the                                                            
national highway transportation safety committee."                                                                              
                                                                                                                                
REPRESENTATIVE   CARL  GATTO,  the  bill's  sponsor,   informed  the                                                            
Committee that  ignition interlock  devices have a good performance                                                             
record.  He shared  that numerous  methods  including incarcerating                                                             
people who  have been convicted  of DUI; levying  hefty fines;  or a                                                            
combination  of  both,  have had  limited  success  in discouraging                                                             
drinking  and driving. He  noted that upon  review of other  states'                                                            
approaches  to this  situation,  it was  determined that  use of  an                                                            
ignition interlock  device was a factor  in those having  success in                                                            
this regard.  He reviewed  that while this  type of legislation  had                                                            
been entertained  in the past, some of the detriments  were the lack                                                            
of a device  operator in  the State and the  quality of the  devices                                                            
available at the  time. Now however, he continued,  in addition to a                                                            
certified  vendor  being  available,  technological   advances  have                                                            
improved the  durability and quality  of the devices to such  things                                                            
as cold  weather and pampering.  He asked  the Committee to  support                                                            
this legislation  in order to assist  in keeping drunk drivers  from                                                            
operating vehicles.                                                                                                             
                                                                                                                                
Senator  Bunde  moved  to  report  the  bill   from  Committee  with                                                            
individual recommendations  and accompanying fiscal  notes. He noted                                                            
that other  [unspecified] legislation  is being advanced  that would                                                            
result in an increase in federal highway funding.                                                                               
                                                                                                                                
There  being  no objection,   CS HB  342(FIN)am  was  REPORTED  from                                                            
Committee with  previous zero fiscal  note #1 from the Court  System                                                            
dated January  29, 2004; zero fiscal note #2 from  the Department of                                                            
Law,  dated  February  13,  2004;  zero  fiscal  note  #3  from  the                                                            
Department  of Public Safety dated  February 2, 2004; indeterminate                                                             
fiscal note #5 from the  Department of Corrections dated February 2,                                                            
2004; indeterminate fiscal  note #6 from the Public Defender Agency,                                                            
Department  of Administration; and  a new fiscal note in  the amount                                                            
of $215,000 dated May 10,  2004 from the Division of Motor Vehicles,                                                            
Department of Administration.                                                                                                   
                                                                                                                                
                                                                                                                                
     SENATE CS FOR CS FOR HOUSE BILL NO. 319(RES)                                                                               
     "An  Act relating  to the disposal  of state  land by  lottery;                                                            
     relating  to the  reservation of  rights by  the state in  land                                                            
     contracts  and deeds; relating to the disposal,  including sale                                                            
     or  lease, of remote  recreational cabin  sites; and  providing                                                            
     for an effective date."                                                                                                    
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair  Wilken stated  that  this bill  would establish  a  public                                                            
nomination  lottery process through  which remote cabin sites  could                                                            
be sold.  He  noted that  the bill's  sponsor,  Representative  Hugh                                                            
Fate,  has voiced  concern in  regard to  some changes  made in  the                                                            
Senate Resources  committee substitute, SCS CS HB  319(RES), Version                                                            
23-LS0477\B,  that  is before  the  Committee.  He stated  that,  in                                                            
addition  to fiscal notes  #4 and  #5 that pertain  to Version  "B,"                                                            
Members'  packets include fiscal  notes #2  and #3 that would  apply                                                            
were a  forthcoming amendment  adopted. He  remarked that this  is a                                                            
"controversial" bill.                                                                                                           
                                                                                                                                
REPRESENTATIVE HUGH FATE,  the bill's sponsor, stated that this bill                                                            
evolved  from "a  simple concept"  of  developing  a method  through                                                            
which  people  could  select  State   land,  have  it  surveyed  and                                                            
privately appraised  at their own expense or appraised  by the State                                                            
under a reimbursement  arrangement, and subsequently  be granted fee                                                            
simple  title.  Continuing,  he noted  that  while the  concept  was                                                            
simple, the details  of the process became complex,  and that it has                                                            
taken four years to reach this point.                                                                                           
                                                                                                                                
Representative  Fate characterized  the bill  as a land acquisition                                                             
bill  that   has  no   intent  of  furthering   subsurface   mineral                                                            
development issues such  as those that have recently occurred in the                                                            
Matanuska  Susitna (Mat-Su)  Borough as he  recalled, at one  point,                                                            
the  bill   contained   language   that  would   have  allowed   the                                                            
Commissioner  of the  Department of  Natural  Resources to  withdraw                                                            
from consideration  land  with high mineral  content, including  gas                                                            
and oil. He declared that  the regulations associated with this land                                                            
selection legislation are "very strict."                                                                                        
                                                                                                                                
Representative   Fate  reiterated   "that  the  very  core   of  the                                                            
legislation"  is to provide  individuals the  ability to nominate  a                                                            
piece of State land that  he or she wishes to purchase. He clarified                                                            
that, at any point  in the process, the Commissioner  could withdraw                                                            
the land from consideration.                                                                                                    
                                                                                                                                
Representative  Fate reminded the Committee that currently  the only                                                            
method  through  which  individuals  could  acquire  State  land  is                                                            
through a lottery  or auction process. He shared that  approximately                                                            
40-percent  of State  land  that is  available through  the  lottery                                                            
method is acquired  and that the remaining land selections,  as well                                                            
as  those acquired  but  repossessed by  the  State due  to lack  of                                                            
payment,  are disposed  of over-the-counter.  He  argued "that  very                                                            
seldom  is an individual  able to"  acquire land  of their  choosing                                                            
under the current  land disposal methods. This, he  declared, is the                                                            
reason this  legislation is  being brought  forward. He stated  that                                                            
were  this  legislation  enacted,   it  "would  be  a  very  popular                                                            
program." He shared that  the House bill, CS HB 319(FIN) am, Version                                                            
23-LS0477\X.A, that was  transmitted to the Senate for consideration                                                            
would have  required general funds  to support start-up expenses  in                                                            
the first few  years, but that, beginning with the  fourth year, the                                                            
program  would have  generated money  for the State.  He also  noted                                                            
that  Version  "X.A"  would  require   the  creation  of  eight  new                                                            
positions.                                                                                                                      
                                                                                                                                
Representative  Fate informed  the  Committee that  the Version  "B"                                                            
committee substitute  would require lower start-up  costs, would not                                                            
require an  increase in  personnel, and would,  like Version  "X.A,"                                                            
generate funds for the  State. However, he communicated that he does                                                            
not  support  Version   "B"  as  it  changes  the  concept   of  the                                                            
legislation  and would probably  "meld" the  program into a  lottery                                                            
program,  which, he declared  "would be disheartening"  as  it would                                                            
not allow people to select land.                                                                                                
                                                                                                                                
Co-Chair  Wilken asked  for further  information  regarding how  the                                                            
bill's language  was changed in Version  "B," specifically  language                                                            
in Section  4, subsection (f) on page  three, beginning on  line 24.                                                            
                                                                                                                                
     (f) A resident may nominate a parcel for disposal under this                                                               
     section. The commissioner shall review the nomination and may                                                              
          (1) offer the nominated parcel for sale;                                                                              
          (2) offer additional parcels within the surrounding area                                                              
     for sale; or                                                                                                               
          (3) find that the parcel or area is not appropriate for                                                               
     disposal.                                                                                                                  
                                                                                                                                
JIM POUND, Staff  to Representative Fate, expounded  that Section 4,                                                            
subsection (f) of Version  "B" would allow the Department of Natural                                                            
Resources  to convert  the program  into a lottery.  Continuing,  he                                                            
noted  that as  in Version  "W.A", an  individual  could nominate  a                                                            
specific  parcel;  however,  contrary  to Version  "W.A",  once  the                                                            
Commissioner  approved  the  land  for nomination,  the  person  who                                                            
nominated  the  land  would,  rather than  being  able  to  pursuing                                                            
purchasing  that land,  would be placed  on equal  footing with  any                                                            
other person who might become interested in that parcel of land.                                                                
                                                                                                                                
Mr.  Pound  voiced  that  many  Alaskans   would  be  interested  in                                                            
acquiring land  through the land nomination  program and  that, were                                                            
an individual  to seek  out and  nominate a  specific parcel,  there                                                            
would  be the  "assumption  that they  have  a prerogative  to  that                                                            
parcel."  He warned that  the language proposed  in the Version  "B"                                                            
committee substitute  could be costly  to the State as were  someone                                                            
to nominate  a parcel and not be awarded  it, they could  argue that                                                            
they have an assumption of prerogative.                                                                                         
                                                                                                                                
Co-Chair  Wilken understood  therefore,  that the  language in  this                                                            
section is the difference  between the House bill Version "W.A," and                                                            
the Senate Resources bill, Version "B".                                                                                         
                                                                                                                                
Senator Dyson  observed that the language  in Section 4,  subsection                                                            
(f) of Version  "B" continues the original goal of  the legislation,                                                            
as, he contended,  it would allow a person to select  land which the                                                            
Commissioner could nominate for sale.                                                                                           
                                                                                                                                
Mr. Pound affirmed;  however, he explained that while  both versions                                                            
of the  bill would  allow a  person to  nominate a  parcel of  land,                                                            
Version "B" differs  from Version "W.A" in that, under  Version "B",                                                            
once  the   selected  land  is  approved   for  nomination   by  the                                                            
Commissioner,  the Department has  indicated that the land  would be                                                            
disposed of via a lottery  or auction process rather than selling it                                                            
to an individual.                                                                                                               
                                                                                                                                
Senator  Dyson  understood  therefore, that  the  Department  "would                                                            
absolutely ignore this clear direction from the Statute."                                                                       
                                                                                                                                
Mr. Pound responded that  the Department "will interpret it in a way                                                            
that they wish to interpret  it, which so far, it has been indicated                                                            
to us that their  interpretation is that they can  put it into their                                                            
existing program which is a lottery or auction."                                                                                
                                                                                                                                
Senator Dyson  surmised therefore,  that the  problem lies  with the                                                            
Department's  interpretation of the  language in Version  "B" rather                                                            
than with the language.                                                                                                         
                                                                                                                                
Mr. Pound replied  that, during the  bill's progression through  the                                                            
House,  "a  negotiated  agreement"   between  the  sponsor  and  the                                                            
Division  of Mining,  Land and Water  in the  Department of  Natural                                                            
Resources  had been  reached regarding  such things  as the size  of                                                            
nominated  parcels;  the  timeframe   allowed  for  the  survey  and                                                            
appraisal;  buffer zone requirements;  and the provisions  providing                                                            
the Commissioner  the authority to make the determination  regarding                                                            
the land  selection.  He declared  that the language  in Section  4,                                                            
subsection  (f) of the  Senate Resources  committee substitute  "has                                                            
nothing to  do with what was agreed  to between this office  and the                                                            
Division. This  was decided by a third  member of the Division  who,                                                            
to my  knowledge, at  been advised  to stay out  of the process  and                                                            
decided to, when he came to Senate Resources, to get involved."                                                                 
                                                                                                                                
Representative  Fate, responding to Senator Dyson's  comment, stated                                                            
that the  Senate  Resources Committee's  adoption  of the  amendment                                                            
that added  Section 4,  subsection (f)  to the  bill appeared  to be                                                            
"innocuous" in that it  changed the application fee for a nomination                                                            
from $100 to $25. He stated  that upon questioning, it was explained                                                            
that the  fee was  lowered because  applicants have  less chance  of                                                            
having  their  name  drawn  in  a  lottery  process.   Upon  further                                                            
investigation,  he explained, it was discovered "that  there was the                                                            
assumption"  within  the  Department  that this  program  "would  be                                                            
melded into the present  lottery program." He exclaimed that he "was                                                            
really startled"  that the addition of this amendment  opened up the                                                            
lottery interpretation  by the Department,  "and that was  what they                                                            
were going  to do in fact."  He reiterated  that this direction  was                                                            
not the intent of the legislation.                                                                                              
                                                                                                                                
Co-Chair  Wilken  asked  the  Department  of  Natural  Resources  to                                                            
explain their interpretation of Section 4, subsection (f).                                                                      
                                                                                                                                
NANCY  WELCH,  Special   Assistant,  Office  of  the  Commissioner,                                                             
Department of  Natural Resources, testified via teleconference  from                                                            
an offnet site  in Anchorage, to explain that the  amendment adopted                                                            
by the  Senate Resources  Committee addressed  the Department's  on-                                                            
going position  of being "fundamentally opposed" to  the right of an                                                            
individual to  nominate a parcel and then "perfect  that into a sale                                                            
through whatever means."  Version "B" she continued, would allow the                                                            
Department  to accept  land nominations  that would  then be  melded                                                            
into the  Department's current  land disposal  lottery program.  The                                                            
cost  of  disposing  land  through  the  lottery  program  would  be                                                            
substantially less than  the land nomination program outlined in the                                                            
House bill,  Version "W.A"  as it would require  fewer personnel  to                                                            
operate.  She reiterated,  however,  that the  Version "B"  proposal                                                            
would not entail "individual processing."                                                                                       
                                                                                                                                
Co-Chair Wilken  asked the Administration's  position regarding  the                                                            
Version "B" committee substitute.                                                                                               
                                                                                                                                
Ms. Welch  responded that  the Administration  supports the  Version                                                            
"B" committee substitute.                                                                                                       
                                                                                                                                
Co-Chair  Wilken  asked  whether  the  Department  had  developed  a                                                            
position on the House bill, Version "X.A."                                                                                      
                                                                                                                                
Ms.  Welch responded  that,  while  no official  position  had  been                                                            
developed  regarding the House  version of  the bill, attempts  were                                                            
undertaken to move away  from individual processing. She stated that                                                            
the Department agreed to  accept such issues as parcel sizes, buffer                                                            
zones, and appraisal/survey  language "against our better judgment,"                                                            
because  the bill's  sponsor  had agreed  to language  allowing  the                                                            
Commissioner,  at  his discretion,  the  right to  remove  nominated                                                            
parcels from consideration.                                                                                                     
                                                                                                                                
Senator Dyson  questioned  the reason for  the Department not  being                                                            
supportive  of  the  individual  Alaskan  land  selection   process,                                                            
provided  all criteria  is met;  particularly since  the State  "has                                                            
such vast State holdings."                                                                                                      
                                                                                                                                
Ms. Welch replied  that the Department  is fundamentally  opposed to                                                            
the  individual selection  process  as its  position  is that  State                                                            
"land should  be offered to all Alaskans  equally." She stated  that                                                            
the Department  questions allowing a person to nominate  land and to                                                            
be given  the first right  to purchase it.  She noted that  this was                                                            
the  aspect  opposed  by the  Senate  Resources  Committee  as  they                                                            
questioned  providing someone the  first right to land that  perhaps                                                            
other  people  were   also  interested  in  or  objected   to  being                                                            
privatized,  as it might,  for example, be  someone else's  favorite                                                            
hunting ground.                                                                                                                 
                                                                                                                                
Senator  Dyson, recalling  that  discussion,  noted  that "the  flip                                                            
side"  to the Department's  position  is that  someone might,  after                                                            
months  of exploring  perhaps by  air or  by foot,  locate a  remote                                                            
piece of  land that others  had not demonstrated  an interest  in or                                                            
had not  utilized,  go through  the lengthy  process of determining                                                             
whether  the land is  acceptable for  nomination,  and then be  told                                                            
that  all their  efforts were  for naught  as the  Department  would                                                            
allow that parcel  of land to be disposed of via a  lottery in which                                                            
numerous people could participate.                                                                                              
                                                                                                                                
Ms. Welch responded  that, in the Department's experience,  the vast                                                            
majority of people  who apply for staking authorization  are able to                                                            
receive  that authorization;  however,  she noted  that when  people                                                            
realize  the difficulty  of reaching  and developing  property,  the                                                            
staking rates  drop. She acknowledged that while some  parcels might                                                            
draw no other  interest and would,  thereby, allow the applicant  to                                                            
stake the land,  it would be unfair to allow one individual  to have                                                            
the advantage to a very popular parcel.                                                                                         
                                                                                                                                
Amendment #1: This amendment  would delete the words "in regulation"                                                            
in Section  4, subsection  (d) (1) in Version  "X.A" on page  three,                                                            
line 14. This section currently reads as follows.                                                                               
                                                                                                                                
     (1)  prepare a schedule  of land offerings  under this  section                                                            
     and  identify  the parcels  for disposal  each  year; the  land                                                            
     offering may not include  mineral land selected by the state or                                                            
     land  identified by  the department  as having  a high  mineral                                                            
     potential;  the department's  identification  of land having  a                                                            
     high mineral  potential shall be based on standards  adopted by                                                            
     the department  in regulation  and shall include consideration                                                             
     of a geophysical survey  or geological evaluation, if any, that                                                            
     was  conducted within  15 calendar  years before  the year  for                                                            
     which the schedule is prepared:                                                                                            
                                                                                                                                
In addition, this  amendment would delete Section  4, subsection (f)                                                            
in Version "X.A" and replace it with the following language:                                                                    
                                                                                                                                
     (f) A  resident may nominate  a parcel for disposal  under this                                                            
     section.  The commissioner shall review the nomination  and, if                                                            
     the nomination is  accepted, will advertise the parcel for sale                                                            
     or lease.  The commissioner  shall accept  bids for the  parcel                                                            
     during  a period  not  to exceed  45 days.  At the  end of  the                                                            
     period for  accepting bids, the resident nominating  the parcel                                                            
     shall have  the first right of refusal to purchase  the land or                                                            
     apply for a lease  under (b) of this section. After receiving a                                                            
     nomination under this  subsection, the commissioner may provide                                                            
     for  the  sale  or  lease  of  additional  parcels  within  the                                                            
     surrounding area or  may find that the nominated parcel or area                                                            
     is not appropriate for disposal.                                                                                           
                                                                                                                                
Co-Chair Wilken moved for  the adoption of Amendment #1 and objected                                                            
for discussion.                                                                                                                 
                                                                                                                                
SENATOR  SCOTT  OGAN,  Chair  of  the Senate  Resources   Committee,                                                            
testified  in opposition  to the amendment.  He  stated that  in his                                                            
experience, individuals  would "cherry pick some of  the best land;"                                                            
specifically popular hunting  or fishing spots. While he agreed with                                                            
the bill's sponsor that  more State land should be made available to                                                            
its citizens,  he stated that "this amendment is bad  public policy"                                                            
and that  the compromised  bill was  good in that  it allowed  for a                                                            
nomination   process.  Furthermore,   he  opined  that  the   Senate                                                            
Resources bill was good  in that it would allow the Commissioner, at                                                            
his  discretion,   to  make  available  additional   land  around  a                                                            
nominated  parcel. This,  he attested  would provide  for good  land                                                            
management.   This  amendment,  he   declared,  would  require   the                                                            
Department to  provide "a best interest finding for  each individual                                                            
parcel,"  thereby tying  "up  a lot of  staff time."  Therefore,  he                                                            
declared  that allowing  the  Department to  issue  a best  interest                                                            
finding on  a whole area would better  serve the State. He  exampled                                                            
that,   in  this   scenario,   the   Department  could   take   into                                                            
consideration  the fact that an area had historically  been utilized                                                            
by a  lot of  people for  hunting and  fishing camps  as opposed  to                                                            
limiting the review to an individual parcel within that area.                                                                   
                                                                                                                                
Senator Ogan stated that  this issue "should be done right" and that                                                            
the Senate Resources version of the bill strikes a good balance.                                                                
                                                                                                                                
Co-Chair  Wilken understood,  therefore, that  Senator Ogan,  rather                                                            
than objecting  "to the land being  claimed and owned", objects  "to                                                            
the manner through which  this" would be done. Continuing, he voiced                                                            
the understanding  that  the Senate  Resources version  of the  bill                                                            
would treat the land disposal as a lottery.                                                                                     
                                                                                                                                
Senator Ogan disagreed.  He stated that the Resources version of the                                                            
bill specifies,  in  the aforementioned  subsection  (f), that  this                                                            
land nomination disposal  program would be separate from the lottery                                                            
program.                                                                                                                        
                                                                                                                                
Co-Chair Wilken understood,  however, that the Department of Natural                                                            
Resources  would  interpret that  section  of the  Senate  Resources                                                            
language, to provide them  the authority to establish the program as                                                            
a lottery.                                                                                                                      
                                                                                                                                
Representative  Fate reiterated  that this  is his understanding  of                                                            
the  Department's  interpretation  of  that  section  and  that  the                                                            
testimony from Ms. Welch upheld that position.                                                                                  
                                                                                                                                
Ms.  Welch   responded  that  subsection   "f"  would  provide   the                                                            
Department   the  required   authorization   to  process  the   land                                                            
nomination through the Department's lottery program.                                                                            
                                                                                                                                
Co-Chair  Wilken   clarified,  therefore,  that  while   the  Senate                                                            
Resources Committee  version of the  bill would continue  to support                                                            
the  land nomination  process,  it  would  allow the  Department  to                                                            
conduct a  lottery process  as opposed to  the House version  of the                                                            
bill that would allow land to be nominated and claimed.                                                                         
                                                                                                                                
Senator Ogan concurred.                                                                                                         
                                                                                                                                
Co-Chair Wilken  summarized that the  method through which  the land                                                            
is disposed of is the issue.                                                                                                    
                                                                                                                                
Senator Dyson stated that  it appears that the Department is putting                                                            
"their own spin" on the  interpretation of the Senate Resources bill                                                            
language,  and  is "very  close  to the  edge  of defying  what  the                                                            
Legislature, as the policy  body, is saying." He declared this to be                                                            
of "great concern".                                                                                                             
                                                                                                                                
Co-Chair Wilken  understood Senator Dyson's comments  to be that the                                                            
language  in Section  4,  subsection  (f)  "doesn't say  what  we're                                                            
hearing" from the Department of Natural Resources.                                                                              
                                                                                                                                
Senator Dyson affirmed.                                                                                                         
                                                                                                                                
Co-Chair Wilken stated that he shares that concern.                                                                             
                                                                                                                                
Senator  B.  Stevens  recalled   that,  over  time,  the  State  has                                                            
identified  certain regions  of the State as  areas in which  people                                                            
could  survey  and stake  a  parcel of  land  and then  negotiate  a                                                            
purchase agreement with  the State. Continuing, he asked whether the                                                            
Department  would  specify  a region  of  the  State to  which  this                                                            
legislation  would apply  or whether  this land  selection  proposal                                                            
would apply to any State land holding.                                                                                          
                                                                                                                                
Representative  Fate responded  that, while  the Department  has the                                                            
authority  to select  areas for  land disposal  for  such things  as                                                            
lotteries or auctions,  there are not parameters currently  in place                                                            
that would  allow people  to go out  and select  parcels of  land in                                                            
areas that have not been identified.                                                                                            
                                                                                                                                
Senator B.  Stevens asked how the  proposed program compares  to the                                                            
State's Homesteading  program through which people  go out and stake                                                            
land in designated areas.                                                                                                       
                                                                                                                                
Representative  Fate stated that this  program would allow  a person                                                            
to identify,  stake, and  nominate a  piece of land  for a cabin  as                                                            
opposed  to the Homestead  program  that identified  areas in  which                                                            
people  were allowed  to live  and  develop a  piece of  land for  a                                                            
certain amount of time  and then petition for title to it. He stated                                                            
that the Senate  Resources committee  substitute would additionally                                                             
allow the  State to select  an area surrounding  a nominated  parcel                                                            
and  allow it  to become  available  through either  their  existing                                                            
lottery/auction   program  or  through  the  proposed   program.  He                                                            
characterized  the proposed  legislation as  being "another  tool in                                                            
the toolbox"  in that it would provide  the Department, in  addition                                                            
to its lottery/auction  program, another means through  which people                                                            
could acquire land.                                                                                                             
                                                                                                                                
Senator B. Stevens asked  for confirmation that the Department would                                                            
have the final  determination as to whether or not  a parcel of land                                                            
could be nominated.                                                                                                             
                                                                                                                                
Representative  Fate affirmed  that  the Department  would have  the                                                            
ability to withdraw  a parcel of land from being nominated  based on                                                            
best interest findings.                                                                                                         
                                                                                                                                
Senator Olson asked Senator  Ogan whether he is comfortable with the                                                            
decision-making opportunity  provided to the Department by Amendment                                                            
#1.                                                                                                                             
                                                                                                                                
Senator  Olson responded  that he  "is not always  comfortable  with                                                            
bureaucratic  decisions;"  however, he  stated that  there are  good                                                            
professional   people  in  the  Department  of  Natural   Resources.                                                            
Continuing,  he  voiced being  uncomfortable  with  the amendment's                                                             
language that  would provide an individual  with the right  of first                                                            
refusal to  purchase or buy  the land. He  pondered how the  process                                                            
would work.                                                                                                                     
                                                                                                                                
Senator Olson  voiced concern that  Department of Natural  Resources                                                            
staffing  changes, over  time, might  be an issue.  In addition,  he                                                            
asked  whether  Native   corporations  have  presented   a  position                                                            
regarding this legislation.                                                                                                     
                                                                                                                                
Representative  Fate responded that  comment time has been  provided                                                            
during  the hearing  process. For  further clarification,  he  noted                                                            
that encumbered lands would not be included in this program.                                                                    
                                                                                                                                
Senator Dyson  requested that the Department provide  "language that                                                            
would  close the  loophole by  which they  have slipped  out of  the                                                            
intentions of  both" the sponsor's and the Resource  versions of the                                                            
bill.                                                                                                                           
                                                                                                                                
Co-Chair Wilken concurred.                                                                                                      
                                                                                                                                
Co-Chair Wilken moved to withdraw Amendment #1.                                                                                 
                                                                                                                                
There  being   no  objection,  Amendment   #1  was  WITHDRAWN   from                                                            
consideration.                                                                                                                  
                                                                                                                                
Representative   Fate   reiterated  that   the   concern  with   the                                                            
legislation  lies  with  the  Department's   intent  to  change  the                                                            
proposal into a lottery system.                                                                                                 
                                                                                                                                
Co-Chair Wilken  asked the sponsor  to work with the Department  and                                                            
others to further clarify the bill.                                                                                             
                                                                                                                                
Co-Chair  Wilken ordered  the  bill HELD  in Committee  for  further                                                            
consideration.                                                                                                                  
                                                                                                                                
[NOTE: This bill was re-addressed later in the meeting.]                                                                        
                                                                                                                                
                                                                                                                                
     CS FOR HOUSE BILL NO. 495(FIN)                                                                                             
     "An  Act allowing a  joint action agency  to encumber  property                                                            
     interests  for  security  purposes;   declaring  certain  joint                                                            
     action  agencies  to  be  political  subdivisions  for  certain                                                            
     purposes; restricting  the sale of property of the joint action                                                            
     agency; allowing  the joint action agency to  transfer property                                                            
     to security  interest holders  under a security interest  or to                                                            
     other parties  without legislative approval;  and providing for                                                            
     an effective date."                                                                                                        
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair  Wilken  noted that  CS HB  495(FIN),  version 23-LS1681\I                                                             
would allow the  Four Dam Pool Power Agency (FDPPA)  to refinance an                                                            
approximate  $73   million  loan  owed  by  the  Alaska   Industrial                                                            
Development  and  Export  Authority  (AIDEA).  He  noted  that  this                                                            
legislation  is a companion bill to  SB 350-4 DAM POOL JOINT  ACTION                                                            
AGENCY, which  was previously heard  by the Committee, and  he noted                                                            
that  Senator B.  Stevens  has been  investigating  concerns  raised                                                            
during that bill's hearing in regards to FDPPA leases.                                                                          
                                                                                                                                
TIM  BARRY,  Staff  to  the  bill's  sponsor,  Representative   Bill                                                            
Williams,  stated  that he  is  available  to answer  any  questions                                                            
pertaining  to  the bill  or  to the  Sponsor's  statement  that  is                                                            
included in Members' packets.                                                                                                   
                                                                                                                                
Co-Chair Wilken  surmised that the  Committee understood  the intent                                                            
of the bill.                                                                                                                    
                                                                                                                                
Senator B. Stevens  recalled that during the Committee's  hearing of                                                            
SB 350, concerns  were raised regarding  the use of assets  operated                                                            
or leased by FDPPA,  as opposed to assets owned by  FDPPA, that were                                                            
proposed  to  be utilized  as  security  for  bonds.  The  pertinent                                                            
language  in  this  regard,  he noted,  is  located  in  Section  1,                                                            
subsection  (c)(6), on page  two, lines 17  through 20 in this  bill                                                            
that reads as follows.                                                                                                          
                                                                                                                                
     (6)  to use  facilities, projects,  and  related assets  owned,                                                            
     leased, or operated  by the joint action agency as security for                                                            
     bonds, notes,  mortgages, credit enhancement  devices, or other                                                            
     obligations.                                                                                                               
                                                                                                                                
Senator B. Stevens stated  that, in response to those concerns, this                                                            
bill's  sponsor and  members of  the FDPPA have  drafted  compromise                                                            
language.                                                                                                                       
                                                                                                                                
Amendment  #1: This  amendment  would  amend Section  1,  subsection                                                            
(c)(6) on page two, beginning on line 17 to read as follows:                                                                    
                                                                                                                                
     (6) to use facilities, projects, and related assets owned,                                                                 
     leased, or operated by the joint action agency as security in                                                              
     accordance with applicable law.                                                                                            
                                                                                                                                
Senator B. Stevens moved to adopt Amendment #1.                                                                                 
                                                                                                                                
Co-Chair  Wilken objected  for discussion.  He  asked whether  AIDEA                                                            
supports this amendment.                                                                                                        
                                                                                                                                
Senator  B. Stevens  responded  that,  in  addition to  AIDEA,  bond                                                            
councilors,  and interested parties  have reviewed and accepted  the                                                            
language of the amendment.                                                                                                      
                                                                                                                                
Co-Chair Wilken  affirmed with TOM LOUAS, a member  of the FDPPA who                                                            
was in the audience, that the amendment was acceptable to him.                                                                  
                                                                                                                                
Co-Chair Wilken removed his objection.                                                                                          
                                                                                                                                
There being no further objection, Amendment #1 was ADOPTED.                                                                     
                                                                                                                                
                                                                                                                                
SFC 04 # 114, Side B 10:38 AM                                                                                                   
                                                                                                                                
                                                                                                                                
Co-Chair Green moved to  report the bill, as amended, from Committee                                                            
with individual recommendations and accompanying fiscal notes.                                                                  
                                                                                                                                
There  being no  objection, SCS  CS HB  495(FIN)  was REPORTED  from                                                            
Committee  with zero fiscal  note #1, dated  March 1, 2004  from the                                                            
Department of Community and Economic Development.                                                                               
                                                                                                                                
                                                                                                                                
     CS FOR HOUSE BILL NO. 338(HES)                                                                                             
     "An Act relating to attendance at public school; and providing                                                             
     for an effective date."                                                                                                    
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair  Wilken  explained   that  were  this  legislation,  CS  HB                                                            
338(HES),   Version   23-LS1258\U,   adopted,  the   public   school                                                            
attendance  policy requirement that  a student be five years  of age                                                            
by August 15th  would be changed to allow attendance  by a child who                                                            
turns five years  of age by September first. In addition,  he stated                                                            
that the  bill would  allow early  admittance  for students  younger                                                            
than the required age upon approval by the superintendent.                                                                      
                                                                                                                                
RYAN MCKINSTER,  Staff to Representative  Lesil McGuire,  the bill's                                                            
sponsor, stated  that this legislation was developed  in response to                                                            
a request  by the  Anchorage school  district  and constituents.  He                                                            
noted that the Anchorage  School Board (ASB) is primarily interested                                                            
in the section  of the bill that would allow a school  administrator                                                            
to make a determination  regarding early entry into kindergarten, as                                                            
currently  each request of  this nature must  be brought before  the                                                            
ASB.  The  proposed  language,  he noted  would  allow  for  swifter                                                            
action,  as  the requests  would  be  divvied  amongst  the  various                                                            
schools.                                                                                                                        
                                                                                                                                
Mr. McKinster also noted  that changing the age requirement deadline                                                            
to September  first would  align Alaska with  25 other states.  This                                                            
change,  he noted,  would  assist  those families  who  move to  the                                                            
State,  especially  military  families.  He  communicated  that  the                                                            
current August  15th cutoff  has prompted some  families to  move to                                                            
another state  and enroll their children in that state's  school for                                                            
a  few weeks  as,  upon  return to  Alaska,  that  enrollment  would                                                            
qualify that student to  attend an Alaska school. He noted that this                                                            
act is costly and disruptive to families.                                                                                       
                                                                                                                                
Mr. McKinster  noted that an indeterminate  fiscal note accompanies                                                             
this legislation.  He referred the  Committee to a memorandum  [copy                                                            
on  file] addressed  to  Representative  McGuire from  Larry  Wiget,                                                            
Executive  Director,  Public  Affairs  Committee  of  the  Anchorage                                                            
School Board,  dated May 6, 2004 that  expressed that, from  the ASB                                                            
perspective, there  would be "no increased cost associated  with the                                                            
passage of this bill."                                                                                                          
                                                                                                                                
Mr.  McKinster stressed  that  this legislation  would  not incur  a                                                            
monetary  expense to a school  district based  on the premise,  that                                                            
whether an education  is provided to a student one  year or the next                                                            
year has no monetary  consequence. He noted, however,  that it would                                                            
cost a  family desiring  an early admittance  hearing approximately                                                             
$500, as a private early education consultant is required.                                                                      
                                                                                                                                
Senator Bunde  admitted to being "a  little bit prejudiced"  on this                                                            
issue,  as he  is familiar  with situations  in  which children  are                                                            
enrolled "far  too early" in kindergarten in order  for their family                                                            
to  avoid  childcare   expenses.  He  requested  that  kindergarten                                                             
teachers  weigh in on whether  enrolling children  early "is  a good                                                            
idea  or  not."  He opined  that  enrolling  children  who  are  too                                                            
immature for kindergarten  could be a disservice to the child and is                                                            
costly to the  State in that there would be more beginning  students                                                            
and, he continued,  oftentimes, those children might  have to repeat                                                            
a grade and would therefore be in the school system longer.                                                                     
                                                                                                                                
Co-Chair Wilken  asked for confirmation that the time  element issue                                                            
in the bill  is a two-week difference  between what is currently  in                                                            
effect and what is proposed.                                                                                                    
                                                                                                                                
Mr. McKinster concurred  that the legislation would delay the cutoff                                                            
date  by two weeks  by changing  it  from August  15th to  September                                                            
first.                                                                                                                          
                                                                                                                                
Senator  Dyson acknowledged   that due  to the  fact  that 30  other                                                            
states have a September  first deadline, that date might be a better                                                            
arbitrary  date than the  August 15th deadline.  However, he  agreed                                                            
with Senator  Bunde's  comments regarding  the  negative aspects  of                                                            
enrolling a  child too early, especially  "when a parent  objects to                                                            
it." He questioned  whether the early  enrollment decision  would be                                                            
better  served  at the  school  board  level  or by  an experienced                                                             
administrator. He voiced  that the issue of parents using the system                                                            
as a babysitter is not a factor in this bill.                                                                                   
                                                                                                                                
Co-Chair Green pointed  out that Senator Dyson makes a good point in                                                            
regard to  having the early  admission decision  being changed  from                                                            
being  a school  board  decision  to being  a  school administrator                                                             
decision. She asked whether this would be "a good thing."                                                                       
                                                                                                                                
Mr.  McKinster  stated  that  the Anchorage  School  Board  and  the                                                            
Anchorage  School District  are  on record  in support  of  allowing                                                            
school administrators,  rather than  the school board, to  decide on                                                            
whether a child should  be granted early admittance, as the position                                                            
is that school administrators have more experience in this area.                                                                
                                                                                                                                
Co-Chair Green noted that  no other school district in the State has                                                            
weighed in  on the legislation.  She asked  whether the changes  are                                                            
procedural.                                                                                                                     
                                                                                                                                
Senator  Dyson characterized  the changes  to be  permissive as  the                                                            
language includes the word "may."                                                                                               
                                                                                                                                
Co-Chair Wilken  pointed out that  language in Section 2,  page one,                                                            
line 14 of  the bill specifies that  the school board "may  delegate                                                            
the authority granted to the chief administrator."                                                                              
                                                                                                                                
Mr. McKinster informed  the Committee that both the City and Borough                                                            
of Juneau  and the  Fairbanks North  Star Borough  school  districts                                                            
support the legislation.                                                                                                        
                                                                                                                                
Senator   B.  Stevens  declared   a  conflict   in  that  a   school                                                            
administrator  granted his  five-year-old child  early admission  to                                                            
kindergarten.                                                                                                                   
                                                                                                                                
Senator  Bunde commented  that while  the timeframe  in question  is                                                            
only a  two-week difference,  that time to  the maturity level  of a                                                            
five-year-old  child is significant. He voiced support  for allowing                                                            
children  to  mature a  bit  more before  they  are faced  with  the                                                            
challenge of being in public  schools. Therefore he does not support                                                            
the date change language.                                                                                                       
                                                                                                                                
Senator  Dyson  moved  to  report  the  bill   from  Committee  with                                                            
individual recommendations and accompanying fiscal note.                                                                        
                                                                                                                                
Senator Bunde objected.                                                                                                         
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR:  Senator  B. Stevens,  Senator Olson,  Senator Dyson,  Co-                                                            
Chair Green, and Co-Chair Wilken                                                                                                
                                                                                                                                
OPPOSED: Senator Bunde                                                                                                          
                                                                                                                                
ABSENT: Senator Hoffman                                                                                                         
                                                                                                                                
The motion PASSED (5-1-1)                                                                                                       
                                                                                                                                
CS  HB 338(HES)  was  reported  from  Committee  with indeterminate                                                             
fiscal  note  #1  Corrected,  dated   February  17,  2004  from  the                                                            
Department of Education and Early Development.                                                                                  
                                                                                                                                
                                                                                                                                
     HOUSE BILL NO. 341                                                                                                         
     "An Act relating to the dive fishery management assessment."                                                               
                                                                                                                                
                                                                                                                                
This was  the second  hearing for  this bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair  Wilken  stated that  this  legislation would  "finalize  a                                                            
compromise   between  Alaska   shellfish   growers  and   commercial                                                            
fisherman  and resolves  a long-standing  controversy about  geoduck                                                            
clams  on aquatic  farm sites."  He reminded  the  Committee that  a                                                            
Constitutional  question arose regarding  language in the  committee                                                            
substitute, Version  23-LS1280\I that was adopted  during the May 8,                                                            
2004 hearing on this bill.                                                                                                      
                                                                                                                                
TIM  BARRY,  Staff  to  Representative  Bill  Williams,  the  bill's                                                            
sponsor, explained to the  Committee that the original bill that was                                                            
transmitted  from  the  House  of  Representatives   to  the  Senate                                                            
contained  a technical change  to State statute  regarding  how "the                                                            
dive fishery association  assesses itself for management of the dive                                                            
fishery."                                                                                                                       
                                                                                                                                
Co-Chair Wilken  suggested that rescinding  Committee action  on the                                                            
adoption  of the Senate  Finance committee  substitute might  be the                                                            
most  appropriate  course of  action  with which  to  deal with  the                                                            
Constitutional  issues  raised  in the  memorandum  [copy on  file],                                                            
dated May 4, 2004,  and addressed to the bill's sponsor  from George                                                            
Utermohle,  Legislative  Counsel,  Division  of Legal  and  Research                                                            
Services.                                                                                                                       
                                                                                                                                
Mr.  Barry communicated  that  the  sponsor  would desire  that  the                                                            
original House bill, Version 23-LS1280\A, be furthered.                                                                         
                                                                                                                                
Co-Chair Wilken  asked Mr. Barry to explain the issues  addressed in                                                            
Mr. Utermohle's 12-page memorandum.                                                                                             
                                                                                                                                
Mr.  Barry stated  that the  Constitutional  issue  regards to  what                                                            
extent shellfish farmers  could harvest wild geoduck stock on leased                                                            
State aquatic  sites in Southeast Alaska. He explained  that a State                                                            
Superior  Court   ruling  specified  that,  based   on  the  State's                                                            
Constitution,  a shellfish  farmer would be  allowed to harvest  "an                                                            
insignificant  amount of  clams."  The Superior  Court decision,  he                                                            
continued,  was appealed to the State  Supreme Court which  decided,                                                            
based on statutory  grounds rather  than on Constitutional  grounds,                                                            
that shellfish farmers  could not harvest substantial amount of wild                                                            
geoducks on a site.                                                                                                             
                                                                                                                                
Mr.  Barry  stated  that,  at  a recent  meeting,   geoduck  divers,                                                            
shellfish farmers,  the Department of Fish and Game,  the Department                                                            
of Law, and  others met and developed  language that addressed  both                                                            
the statutory  and Constitutional concerns addressed  by the Courts.                                                            
This  language, he  continued,  is included  in the  Senate  Finance                                                            
committee  substitute  adopted  by this  Committee.  He stated  that                                                            
these  groups "are  confident" that  were the  constitutionality  of                                                            
this language challenged  at the Superior Court level, "the language                                                            
was meet the question as addressed by the Superior Court."                                                                      
                                                                                                                                
Mr.  Barry informed  that  the  concern raised  in  Mr. Utermohle's                                                             
memorandum  is that it  is unknown  how a challenge  at the  Supreme                                                            
Court level would fare,  as statutory not Constitutional issues were                                                            
addressed  in that  Court.  He concluded  that while  the  concerned                                                            
parties  believe that  the language  would meet  the Constitutional                                                             
issue addressed  by the Superior Court, the view of  these issues at                                                            
the Supreme Court level is "an unanswered question."                                                                            
                                                                                                                                
Co-Chair Wilken  stated that the question is whether  to advance the                                                            
original House version  of the bill or the Version "I" bill to which                                                            
has Constitutional concerns have been raised.                                                                                   
                                                                                                                                
Mr. Barry reiterated  that the bill's sponsor favors  advancement of                                                            
the original  version of the bill.  He stated that "no questions  of                                                            
any sort" arose  regarding the original  House bill as it  proceeded                                                            
through House hearings and the floor process.                                                                                   
                                                                                                                                
Co-Chair Wilken  clarified therefore, that the Court  issues involve                                                            
actions taken by the Senate.                                                                                                    
                                                                                                                                
Mr.  Barry  concurred.  In response  to  a  question  from  Co-Chair                                                            
Wilken, he responded that  the bill passed the House by a vote of 39                                                            
ayes to one  nay, and that "very minimal"  discussion had  occurred.                                                            
                                                                                                                                
Senator Dyson  made a motion  to rescind the  May 8, 2004  Committee                                                            
action  adopting  the  Finance  committee  substitute,  Version  23-                                                            
LS1280\I.                                                                                                                       
                                                                                                                                
There being  no objection,  the action of  adopting the Version  "I"                                                            
committee substitute was RESCINDED.                                                                                             
                                                                                                                                
Co-Chair  Wilken stated  that  HB 341,  Version 23-LS1280\A  is  now                                                            
before the Committee.                                                                                                           
                                                                                                                                
Mr. Barry informed the  Committee that the Southeast Alaska Regional                                                            
Dive Fisheries Association  was created in 1998 and consists of dive                                                            
fishermen,   communities  in  Southeast   Alaska,  and  processors.                                                             
Continuing,  he noted  that the  Association,  though assessing  its                                                            
members  at  a  rate  of  one,  three,  five,  or  seven-percent  as                                                            
specified in State  statute, pays for management of  the fishery. He                                                            
stated that HB  341 would change statute to provide  the Association                                                            
"more flexibility  to fund the process" by expanding  the options to                                                            
include two, four, or six percent assessments.                                                                                  
                                                                                                                                
Senator Olson asked whether  other aquiculture operations outside of                                                            
Southeast Alaska have weighed in on this legislation.                                                                           
                                                                                                                                
Mr.  Barry  voiced  that  no concern  from  other  areas  have  been                                                            
expressed.                                                                                                                      
                                                                                                                                
PAUL  FUHS, Representative,  Alaska  Trademark  Shellfish  Industry,                                                            
expressed  disappointment  in not  testifying before  the  Committee                                                            
rescinded its action on  Version "I" as, he recounted, the Court had                                                            
heard regarding  the Constitutional issues and that  there should be                                                            
"some comfort  in the fact that they  didn't rule on it."  He stated                                                            
that it  is inevitable  that  there would  be some  wild stock  on a                                                            
leased  aquatic  farm site  for,  he  continued,  if no  wild  stock                                                            
existed there,  "it is bad  habitat." Therefore,  he stated  that in                                                            
order for the  shellfish industry  to grow, the issue of  wild stock                                                            
must be  addressed. He opined  that, prior  to this Court case,  the                                                            
Department  of Fish  and  Game had  adequate  measures  in place  to                                                            
address the harvesting  of wild stock on these sites. He stated that                                                            
the Court's  addressing of statutory  rather than Constitutionality                                                             
issues  lends  support  to adopting  the  committee  substitute.  He                                                            
stated that no action in this regard would hurt the industry.                                                                   
                                                                                                                                
Co-Chair  Wilken  asked  whether  this  bill had  had  other  Senate                                                            
committee hearings prior to being referred to Senate Finance.                                                                   
                                                                                                                                
Mr. Barry informed that  the bill had been heard by the Senate Labor                                                            
& Commerce (L&C) Committee.                                                                                                     
                                                                                                                                
Co-Chair Wilken asked whether  the Senate L&C Committee had reviewed                                                            
any  of  the  Constitutional  issues   that  have  been  raised.  In                                                            
addition, he opined  that the bill should have been  referred to the                                                            
Senate Judiciary  Committee where  Mr. Utermohle's memorandum  could                                                            
have been "dissected" and addressed.                                                                                            
                                                                                                                                
Co-Chair Wilken  commented that action  on this bill is limited  due                                                            
to  the impending  end  of this  Legislative  Session,  and that  he                                                            
expected that  the bill would be re-introduced the  next Legislative                                                            
session in  order to give it "proper  consideration." He  reiterated                                                            
that another Senate committee  referral should transpire in order to                                                            
"properly" address all the issues.                                                                                              
                                                                                                                                
Mr. Fuhs commented  that all the various components  of the bill had                                                            
been addressed  by  the Department  of Natural  Resources and  other                                                            
interested  parties,  and that  the committee  hearing  delay was  a                                                            
result of the timing of the recent Supreme Court ruling.                                                                        
                                                                                                                                
Co-Chair  Wilken  pointed out  that  the Committee's  options  would                                                            
include  reporting  out  the  original  bill, HB  341,  Version  23-                                                            
LS1280\A,  or reporting  out the  Version "I"  committee  substitute                                                            
with a referral to the Judiciary Committee.                                                                                     
                                                                                                                                
Mr.  Berry responded  that,  of those  options, the  bill's  sponsor                                                            
would support reporting Version "A" from Committee.                                                                             
                                                                                                                                
Senator  Olson  asked   the  Alaska  Trademark  Shellfish   Industry                                                            
position regarding these options.                                                                                               
                                                                                                                                
Mr. Fuhs voiced  support for furthering  Version "A," as  he stated,                                                            
"there is no problem with it at all."                                                                                           
                                                                                                                                
Co-Chair Green  moved to report the  original bill, HB 341,  Version                                                            
23-LS1280\A,  from  Committee with  individual  recommendations  and                                                            
accompanying fiscal notes.                                                                                                      
                                                                                                                                
There  being no  objection,  HB  341 was  REPORTED  from  Committee,                                                            
accompanied by  zero fiscal note #1, from the Department  of Revenue                                                            
dated February 1, 2004.                                                                                                         
                                                                                                                                
RECESS TO THE CALL OF THE CHAIR 11:03 AM / 7:08 PM                                                                              
                                                                                                                                
                                                                                                                                
     SENATE CS FOR CS FOR HOUSE BILL NO. 319(RES)                                                                               
     "An  Act relating  to the disposal  of state  land by  lottery;                                                            
     relating  to the  reservation of  rights by  the state in  land                                                            
     contracts  and deeds; relating to the disposal,  including sale                                                            
     or  lease, of remote  recreational cabin  sites; and  providing                                                            
     for an effective date."                                                                                                    
                                                                                                                                
                                                                                                                                
[NOTE: This bill was heard earlier in the meeting.]                                                                             
                                                                                                                                
JIM POUND, Staff to Representative  Bud Fate, stated that, following                                                            
the morning  hearing  on the bill,  discussions  ensued between  the                                                            
sponsor  and Commissioner  Tom Irwin  of the  Department of  Natural                                                            
Resources.  As a result, he continued,  language was developed  that                                                            
one:  meets the  sponsor's intent  for the  bill; and  two: has  the                                                            
approval of the Department.                                                                                                     
                                                                                                                                
[NOTE: Amendment #2 was not offered for consideration.]                                                                         
                                                                                                                                
Amendment  #3:  This   amendment  amends  language   in  Section  4,                                                            
subsection  (f), on  page three,  beginning  on line  24 to read  as                                                            
follows:                                                                                                                        
                                                                                                                                
     (f)  a resident  may nominate  a parcel  or  area for  disposal                                                            
     under  this section,  and, if  the resident  has not leased  or                                                            
     purchased land under  this section during the three-year period                                                            
     preceding  the date  of nomination,  may apply  for a right  to                                                            
     stake the  nominated parcel with the intent to  lease under (b)                                                            
     of this section.  The commissioner shall review  the nomination                                                            
     and may                                                                                                                    
          (1) offer {THE NOMINATED] the right to stake a parcel for                                                             
     lease through  a sealed-bid or outcry auction  and subsequently                                                            
     purchase the parcel for fair market value;                                                                                 
          (2) offer the parcel and additional parcels within the                                                                
     surrounding  area for sale in  a simultaneous filing  period in                                                            
     the manner  provided for lottery parcels by AS  38.05.057; [OR]                                                            
          (3) offer already surveyed and platted parcels for sale                                                               
     at  a  sealed-bid  or  outcry  auction  as  provided  under  AS                                                            
     38.05.055; or                                                                                                              
          (4) find that the parcel or area is not appropriate for                                                               
     disposal.                                                                                                                  
                                                                                                                                
                                                                                                                                
Co-Chair  Wilken  moved  to  adopt Amendment  #3  and  objected  for                                                            
explanation.                                                                                                                    
                                                                                                                                
Mr. Pound explained  that this amendment  addresses several  sponsor                                                            
and Department of Natural  Resources concerns including: the process                                                            
pertaining  to  how  an individual  nominating  a  parcel  would  be                                                            
recognized  in the process; the length  of time required  between an                                                            
individual's ability  to stake additional parcels;  clarification of                                                            
the   staking  language   pertaining   to   the  leasing/purchasing                                                             
provision;   and  language   providing  the   Commissioner   of  the                                                            
Department  of Natural Resources the  ability to offer for  disposal                                                            
land surrounding  a nominated parcel  or to deny a nominated  parcel                                                            
for disposal.                                                                                                                   
                                                                                                                                
Co-Chair  Wilken asked  for further  clarification  regarding  how a                                                            
person would nominate land.                                                                                                     
                                                                                                                                
Mr. Pound responded that  a person would locate a parcel of land and                                                            
file  for  the right  to  stake  that  particular  parcel  with  the                                                            
Department of Natural Resources.                                                                                                
                                                                                                                                
Co-Chair Wilken understood  that this would entail a written request                                                            
for the right  to stake the land. In other words,  he continued, the                                                            
individual is requesting  the right to lease and eventually purchase                                                            
that parcel of land.                                                                                                            
                                                                                                                                
Mr. Pound  responded  that the request  would entitle  someone  to a                                                            
five-year lease  with a five-year renewal option.  He noted that "at                                                            
any time you have a lease, you have the right to purchase."                                                                     
                                                                                                                                
Co-Chair Wilken asked the  sequence of events that would occur after                                                            
the land  has  been staked;  specifically  whether a  sealed bid  or                                                            
outcry auction would occur.                                                                                                     
                                                                                                                                
Mr. Pound stated  that, were another individual to  express interest                                                            
in a  parcel of land  to which a  right to stake  has been filed,  a                                                            
bidding process would be implemented.                                                                                           
                                                                                                                                
Co-Chair Wilken asked how  public notification regarding the staking                                                            
request would occur.                                                                                                            
                                                                                                                                
Mr.  Pound  explained   that  a  public  notice  process   would  be                                                            
implemented.                                                                                                                    
                                                                                                                                
Co-Chair  Wilken asked  for confirmation  that, were  more than  one                                                            
person  interested  in a  parcel  of land,  the  Commissioner  would                                                            
determine whether a sealed bid or outcry auction would occur.                                                                   
                                                                                                                                
Mr. Pound affirmed.                                                                                                             
                                                                                                                                
Co-Chair Wilken  understood that the land's purchase  price would be                                                            
based on fair market value.                                                                                                     
                                                                                                                                
Mr. Pound concurred.                                                                                                            
                                                                                                                                
Senator Bunde  asked regarding language pertaining  to someone being                                                            
able  to stake  a parcel  of land  every three  years; specifically                                                             
whether this would entail  relinquishing a parcel of land previously                                                            
received through this program.                                                                                                  
                                                                                                                                
Mr. Pound  responded  that another  parcel of land,  in addition  to                                                            
previously   received  parcels,  could   be  staked  at   three-year                                                            
intervals.                                                                                                                      
                                                                                                                                
Senator Bunde  opined that "there is a limited amount"  of desirable                                                            
land  available  for  remote  cabin  sites.  Continuing,  he  voiced                                                            
concern that the provision  allowing individuals to acquire numerous                                                            
parcels of land could result in "land barons."                                                                                  
                                                                                                                                
Co-Chair  Wilken asked whether  Senator Bunde  wished to propose  an                                                            
amendment to address this concern.                                                                                              
                                                                                                                                
Senator  Bunde responded  that  two options  exist  to address  this                                                            
concern:  one being that  were a person to  desire to stake  another                                                            
parcel of land  any previous land  they had acquired in this  manner                                                            
must  be relinquished;  or  two,  a longer  timeframe  between  land                                                            
nominations could be required.  He reiterated his concern that, even                                                            
though the  State has vast  land holdings,  suitable land with  such                                                            
things as a water  source and accessibility is limited  and that one                                                            
individual might" tie that up."                                                                                                 
                                                                                                                                
Senator Bunde  suggested that the  timeframe between nominations  be                                                            
increased to between six and ten years.                                                                                         
                                                                                                                                
Senator Dyson  opined that, over time, the people  who receive these                                                            
lands would probably develop  and perhaps sell their land to others.                                                            
He voiced that  this would be beneficial,  as it would open  up more                                                            
sites to others.  Furthermore, he stated that the  expenses involved                                                            
with surveying and developing  land might be a deterrent to the land                                                            
baron issue. Therefore,  he commented that he does not share Senator                                                            
Bunde's concern "that this would be abused."                                                                                    
                                                                                                                                
Senator  Bunde  stated that  this  legislation  could  also lead  to                                                            
frustration  in that  someone might  desire to  access a  particular                                                            
valley and find  it staked or that the person who  staked the valley                                                            
might be upset to have another person trespassing on their land.                                                                
                                                                                                                                
Amendment-to-Amendment   #3:  This  amendment  proposes   to  change                                                            
language  in subsection  (f)  in that the  length  of time  required                                                            
before  an  individual  could   stake  another  parcel  of  land  be                                                            
increased from three-years to five-years.                                                                                       
                                                                                                                                
Senator Bunde moved to adopt the Amendment-to-Amendment #3.                                                                     
                                                                                                                                
Co-Chair Wilken objected for discussion.                                                                                        
                                                                                                                                
Senator  Olson  agreed  that  the  amount  of  desirable  land  with                                                            
suitable  water and other  amenities is limited.  He also  supported                                                            
Senator Bunde's  concern regarding the potential for  a "land baron"                                                            
scenario.                                                                                                                       
                                                                                                                                
Senator B. Stevens  voiced the understanding that  a person would be                                                            
responsible  for staking  the land  and having  it surveyed,  before                                                            
purchasing it.                                                                                                                  
                                                                                                                                
Mr. Pound concurred.                                                                                                            
                                                                                                                                
Senator B.  Stevens commented, "that  the value of the land  is only                                                            
intrinsic  to the person who  wants to go  pay and go out  there and                                                            
stake it  and survey  it." He stated  that the  market value  of the                                                            
land is  probably less than  the cost of  the survey. Therefore,  he                                                            
voiced being opposed to  the amendment-to-Amendment #3, as he opined                                                            
that the amount  of State land that is available now  and not bought                                                            
is  indicative  of the  fact  that  not a  lot  of people  would  be                                                            
clambering to pursue this land acquisition proposal.                                                                            
                                                                                                                                
Co-Chair Green inquired  as to whether other State land disbursement                                                            
programs have look-back provisions or limiting factors.                                                                         
                                                                                                                                
NANCY  WELCH,  Special   Assistant,  Office  of  the  Commissioner,                                                             
Department  of Natural Resources testified  via teleconference  from                                                            
an offnet  site in  Anchorage and  informed the  Committee that  the                                                            
Homestead program  has a minimum five-year  limiting provision.  She                                                            
clarified    that   this    legislation's    three-year    timeframe                                                            
specification  applies to the nomination process rather  than to the                                                            
acquisition.                                                                                                                    
                                                                                                                                
Co-Chair Green clarified  that the three-year time limitation refers                                                            
to the right to stake rather than the purchase.                                                                                 
                                                                                                                                
Ms. Welch specified  that the three-year  time frame would  apply to                                                            
an individual's  "right to  nominate a parcel  and if they  actually                                                            
not required one  in three years then they can apply  for a right to                                                            
stake the  nominated parcel."  Therefore,  she summarized,  "it only                                                            
applies  to the  provision  of applying  for  a right  to stake  the                                                            
nominated  parcel; it  doesn't apply  if the person  just wanted  to                                                            
participate  in  any  land sale  program  other  than  this  special                                                            
provision for staking a special parcel."                                                                                        
                                                                                                                                
Representative  Fate  voiced   no  objection  to  the  amendment  to                                                            
Amendment  #3, as  he recounted  this provision  had,  at one  time,                                                            
specified  a five-year  timeframe.  He stated  that  the reason  for                                                            
reducing the timeframe  to three years was to allow  more land to be                                                            
sold.                                                                                                                           
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Olson, Senator Bunde, and Co-Chair Wilken                                                                     
                                                                                                                                
OPPOSED: Senator Dyson, Senator B. Stevens, and Co-Chair Green                                                                  
                                                                                                                                
ABSENT: Senator Hoffman                                                                                                         
                                                                                                                                
The motion FAILED (3-3-1)                                                                                                       
                                                                                                                                
The Amendment-to-Amendment #3 FAILED to be adopted.                                                                             
                                                                                                                                
Amendment #3 was again before the Committee.                                                                                    
                                                                                                                                
Mr. Pound reiterated that  Amendment #3 would allow the Commissioner                                                            
of the Department  of Natural Resources to offer additional  parcels                                                            
surrounding  a  nominated   parcel.  He  also  noted  that  were  an                                                            
individual  to nominate a  parcel and then  decide not to stake  it,                                                            
the amendment would allow  the Commissioner to offer that parcel for                                                            
disposal  through  other land  disposal  programs.  In addition,  he                                                            
noted that  were already surveyed  and platted lands not  purchased,                                                            
this amendment would allow  those lands to be made available through                                                            
a sealed bid or outcry auction.                                                                                                 
                                                                                                                                
Co-Chair Wilken removed his objection to Amendment #3.                                                                          
                                                                                                                                
There being no further objection, Amendment #3 was ADOPTED.                                                                     
                                                                                                                                
Conceptual   Amendment  #4:  This   amendment  specifies   that  the                                                            
provisions of this legislation would terminate in ten years.                                                                    
                                                                                                                                
Co-Chair Wilken  moved to adopt Amendment #4. He stated  that due to                                                            
the fact that this bill  is "plowing new ground" and has encountered                                                            
some controversy, it would  be advantageous to review the outcome of                                                            
the bill at a later time.                                                                                                       
                                                                                                                                
Representative  Fate  stated that  a ten-year  time  frame would  be                                                            
acceptable. He  noted that, as reflected in the accompanying  fiscal                                                            
note,  the State  would not  begin to  realize the  benefits of  the                                                            
legislation for at least five years.                                                                                            
                                                                                                                                
There being no objection, Amendment #4 was ADOPTED.                                                                             
                                                                                                                                
Co-Chair  Wilken asked whether  the adopted  amendments would  alter                                                            
the bill's fiscal notes.                                                                                                        
                                                                                                                                
Mr. Pound stated  that the fiscal  note that accompanied  the Senate                                                            
Resources version of the  bill would not be affected by the changes.                                                            
                                                                                                                                
Senator Bunde  moved to report the bill, as amended,  from Committee                                                            
with individual recommendations and accompanying fiscal notes.                                                                  
                                                                                                                                
There  being no  objection, SCS  CS HB  319(FIN)  was REPORTED  from                                                            
Committee  with zero  fiscal note  #4, dated  May 8,  2004 from  the                                                            
Division of Oil  & Gas, Department of Natural Resources  and $69,000                                                            
fiscal note #5, dated May  8, 2004 from the Division of Mining, Land                                                            
and Water, Department of Natural Resources.                                                                                     
                                                                                                                                
                                                                                                                                
     CS FOR HOUSE BILL NO. 461(STA) am                                                                                          
     "An Act relating to enhanced 911 surcharges and to 911 and                                                                 
     emergency services dispatch systems."                                                                                      
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair Wilken  stated that this bill, CS HB 461(STA),  Version 23-                                                            
LS1633\E.A would allow  "a local municipality, by ordinance to raise                                                            
the  surcharge  and   eliminate  the  current  surcharge   limit  on                                                            
telephone users  for 911 emergency  services. He noted that  several                                                            
fiscal notes accompany the legislation.                                                                                         
                                                                                                                                
MATT RUDIG,  Staff to the  bill's sponsor  Representative Jim  Holm,                                                            
noted that this  bill would: maintain public safety;  increase local                                                            
control; and implement  911 service in rural Alaska.  He stated that                                                            
changing  current   statutes  would   provide  municipalities   "the                                                            
flexibility  to  charge what  they  need to  charge  to recover  the                                                            
costs"   of  Enhanced  911   emergency   service,  dispatches,   and                                                            
surcharges.  He  noted  that there  is  "little  debate"  as to  the                                                            
necessity of  this service, which  is provided nationwide  to assist                                                            
in saving lives.                                                                                                                
                                                                                                                                
Mr.  Rudig  explained  that,  currently,  municipalities,  with  the                                                            
exception of Anchorage  which is limited to a 50-cent surcharge, are                                                            
limited  to  charging  a maximum  75-cent  surcharge  per  month  to                                                            
telephone users  to assist in funding a municipality's  Enhanced 911                                                            
system.  He clarified  that the  funds generated  by this  surcharge                                                            
would  be limited  to  providing  for  equipment  costs and  do  not                                                            
provide for any operational  costs associated with the program. This                                                            
bill,  he advised,  would allow  municipalities to  charge a  single                                                            
surcharge per  phone line to provide  funds for both the  system and                                                            
operational expenses including dispatch operations.                                                                             
                                                                                                                                
Mr.  Rudig  stated  that the  current  surcharge  level  has  forced                                                            
municipalities  "to  shift  the burden  of  the cost  directly  onto                                                            
property  owners" through  property taxation  rather than  spreading                                                            
the assessment "to the actual users who demand the service."                                                                    
                                                                                                                                
Mr.  Rudig  commented  that  while   there  has  been  some  concern                                                            
regarding the  fact that the bill  does not include a maximum  level                                                            
of which municipalities  could charge, the bill clearly  states that                                                            
a  municipality   could  not  use  the  funds  generated   from  the                                                            
"surcharge  for  anything  but  the  emergency  services  system  or                                                            
dispatch."                                                                                                                      
                                                                                                                                
                                                                                                                                
SFC 04 # 115, Side A 07:32 PM                                                                                                   
                                                                                                                                
                                                                                                                                
Mr. Rudig continued  that provisions of the bill specify  that on an                                                            
annual basis,  a review and voter concurrence of the  surcharge rate                                                            
must be conducted, as specified  in Section 4(a) on page four, lines                                                            
14 through 19 of the bill.  He stated, therefore, that the amount of                                                            
the surcharge would be  governed by State statute and by local voter                                                            
approval. Thus,  he attested, the local governing  body would not be                                                            
able to institute an excessive  surcharge fee. Furthermore, he noted                                                            
that  the State  statute would  allow the  surcharge  to be  changed                                                            
solely by  ordinance as  opposed to current  language that  requires                                                            
both a resolution  and an ordinance.  In conclusion, he stated  that                                                            
because  this legislation  allows  the  proposed methodology  to  be                                                            
optional,  municipalities  could choose  to continue  their  current                                                            
surcharge taxation method.                                                                                                      
                                                                                                                                
REPRESENTATIVE  JIM  HOLM,  the  bill's  sponsor,  acknowledged  the                                                            
efforts  exerted  by  Mr.  Rudig  in developing   this legislation.                                                             
Continuing, he pointed  out that the comparison chart, titled "E-911                                                            
Dispatch Center Revenue  and Costs Summary" [copy on file], prepared                                                            
by Tim Rogers of the Alaska  Municipal League substantiates the need                                                            
for  this  legislation  as  it  depicts  that  the  operating  costs                                                            
associated  with the Anchorage Call  and Dispatch Centers  amount to                                                            
$7,652,280  as compared to the corresponding  revenue of  $2,066,944                                                            
currently  generated  by the  City's  50-cent surcharge  on  344,491                                                            
phone lines and  cell phones. Continuing, he noted  that the City of                                                            
Fairbanks'  Call and  Dispatch Centers'  operating  costs amount  to                                                            
$4,680,000 with  $436,293 of that being supported  by the City's 65-                                                            
cent surcharge. He opined  that the people of a municipality, rather                                                            
than the State,  should establish a limitation on  the surcharge, as                                                            
they are the users of the service.                                                                                              
                                                                                                                                
Representative  Holm  calculated   that  in  order  to sufficiently                                                             
collect funds  to offset  the total cost  of providing the  Enhanced                                                            
911 system  in their  community, a  surcharge of  $45 per month  per                                                            
line would be  required. To that point, he understood  that the City                                                            
of Fairbanks has specified  an upper surcharge limit of no more than                                                            
three  dollars   per  line  and  that  the  City  of   Anchorage  is                                                            
considering a surcharge fee of approximately $1.50 per line.                                                                    
                                                                                                                                
Representative   Holm  noted  that   the  Kenai  Peninsula   Borough                                                            
currently has a 911 System  shortfall of $1,819,328 and the City and                                                            
Borough of Juneau has a shortfall of $1,094,544.                                                                                
                                                                                                                                
Representative Holm pointed  out that each area would be required to                                                            
have a separate  cost analysis conducted, as, he contended,  one fee                                                            
would not align with all communities' needs.                                                                                    
                                                                                                                                
Senator Bunde  asked for further confirmation that  the level of the                                                            
surcharge would  be authorized by a vote of the people,  as he noted                                                            
that this action  is not specifically  addressed in Section  4(a) of                                                            
the bill.                                                                                                                       
                                                                                                                                
Mr. Rudig responded  that the intent of the bill is  to specify that                                                            
any change to the surcharge would be by local ordinance.                                                                        
                                                                                                                                
Senator  Bunde  declared  that  changing   the  surcharge  level  by                                                            
ordinance is different  that changing it by a vote of the people. He                                                            
expressed,  therefore, that the citizens  of a municipality  must be                                                            
confident  that their  local governing  body  would act responsibly                                                             
when addressing this issue via local ordinance.                                                                                 
                                                                                                                                
Co-Chair  Wilken asked  whether both  the surcharge  review and  the                                                            
adoption of the corresponding ordinance must occur annually.                                                                    
                                                                                                                                
Mr.  Rudig clarified  that  he had  misspoken  in this  regard as  a                                                            
municipality's   obligation  regarding   ordinance  action   is  not                                                            
specified in the bill.                                                                                                          
                                                                                                                                
Co-Chair  Wilken understood  therefore  that while  an annual  audit                                                            
must be conducted,  annual ordinance  action would not be  required.                                                            
                                                                                                                                
Representative Holm surmised  that most municipalities conduct their                                                            
budget process  in a similar manner  and therefore, concluded,  that                                                            
the E-911  system  would be  a budgetary  line item.  Therefore,  he                                                            
concluded that  as such it would be  reviewed on an annual  basis by                                                            
the municipality.                                                                                                               
                                                                                                                                
Co-Chair  Wilken understood  earlier  testimony to  specify that  an                                                            
annual audit of the E-911 System must be conducted.                                                                             
                                                                                                                                
Senator  Bunde pointed  out that this  language  is included  in the                                                            
bill in Section 4(a) on page four, lines 14 through 21.                                                                         
                                                                                                                                
Co-Chair  Wilken  asked  the  sponsor  to  discuss   this  language;                                                            
specifically in regards  to which E-911 System expenses, as required                                                            
by State law, would benefit from the surcharge.                                                                                 
                                                                                                                                
Representative  Holm stated  that language  in Section 4(a)  on page                                                            
four  beginning  on  line 18  specifies  that  the  surcharge  could                                                            
provide  "for the actual  labor and  equipment used  to provide  the                                                            
emergency services dispatch."  He stated that this language does not                                                            
provide  for "anything  extra" or  allow a municipality  "to  charge                                                            
more than the  service costs." Therefore, he declared,  "this is the                                                            
upper cap."  He noted; however, that  the language does not  limit a                                                            
municipality's  ability to, as an example, charge  property owners a                                                            
tax to assist  in covering the costs  of the service. He  reiterated                                                            
that this  legislation would  allow municipalities  to charge  those                                                            
who have phone lines in the community a per line surcharge.                                                                     
                                                                                                                                
Co-Chair  Wilken  understood   that  the  audit  would  be  a  local                                                            
municipality function  and that the local governing  body would make                                                            
the determination  regarding  the level of  the local surcharge.  He                                                            
voiced that, absent  a specified surcharge ceiling,  language should                                                            
be included to prohibit  the local assembly from using the surcharge                                                            
as a means through which to raise money.                                                                                        
                                                                                                                                
Representative  Holm reiterated that  an upper limit is dictated  in                                                            
the bill by the  aforementioned Section 4(a) that  specifies exactly                                                            
what  costs could  be recouped  by the  surcharge:  these being  the                                                            
exact  labor and costs  associated  with providing  the service.  He                                                            
opined that  it would be inappropriate  to specify a ceiling  in the                                                            
bill as the cost of providing the service varies by community.                                                                  
                                                                                                                                
AT EASE 7:43 PM / 7:43 PM                                                                                                       
                                                                                                                                
Co-Chair Green  observed that the  bill's language does not  address                                                            
matters   regarding  such   things  as   duplication  of   services,                                                            
efficiency, or competitive  services, or "the breath of the service"                                                            
that might be offered.  Continuing, she voiced concern that, while a                                                            
municipality  would set the surcharge  rate, the collection  of that                                                            
surcharge and  any corresponding negative  reactions from  telephone                                                            
line users would  fall upon the shoulders of the local  utility. She                                                            
noted  that  while  the utility  has  no  say  in  the "open-ended"                                                             
surcharge rate, the utility  would receive the angry phone calls. In                                                            
summary, she  agreed with Co-Chair  Wilken that a surcharge  ceiling                                                            
should be included in the legislation.                                                                                          
                                                                                                                                
Co-Chair  Wilken   understood  that,  while  cell   phones  are  not                                                            
currently  assessed an E-911  fee, this legislation  would  apply to                                                            
them.                                                                                                                           
                                                                                                                                
Mr.  Rudig  affirmed   that  cell  phones  would  be   assessed  the                                                            
surcharge.                                                                                                                      
                                                                                                                                
Co-Chair Wilken  asked, using the  City of Fairbanks as an  example,                                                            
whether someone living  outside of the city limits would be required                                                            
to pay the E-911 surcharge.                                                                                                     
                                                                                                                                
Representative Holm explained  that every phone and cell phone in an                                                            
E-911  service area  would  be required  to  pay the  surcharge.  He                                                            
reiterated  that currently,  while  every  phone line  is charged  a                                                            
surcharge,  the revenue generated  does not  offset the cost  of the                                                            
service. In  response to a question  from Co-Chair Wilken,  he noted                                                            
that most of the  Fairbanks North Star Borough is  located within an                                                            
E-911 service area and would therefore pay the surcharge.                                                                       
                                                                                                                                
Co-Chair   Wilken  understood   that  the   money  raised   by  this                                                            
legislation would  increase, as cell phones would  now be subject to                                                            
the surcharge.                                                                                                                  
                                                                                                                                
Senator  Bunde  commented  that  consideration  might  be  given  to                                                            
establishing  a universal 911 service  charge for someone  who lives                                                            
outside of a service  area, but who receives 911 assistance  through                                                            
a local or long-distance  call. In addition, he expanded on Co-Chair                                                            
Green's concern that absent  any "checks and balances" regarding the                                                            
level  of 911  service a  utility might  install,  "a Cadillac"  911                                                            
enhanced  service system might  be implemented  in an area  when the                                                            
community "only  wants a Ford." This  situation, he attested,  would                                                            
serve  to increase  the  surcharge  level required  to  pay for  the                                                            
system or would  allow the utility  to influence the rate.  He noted                                                            
that such things  as 911 fees and  universal service fees  draw less                                                            
public scrutiny than those  aroused by such things as an increase in                                                            
one's property tax assessment,  which is currently the common method                                                            
of collecting  the 911  surcharge. Therefore,  he stressed  that the                                                            
checks  and  balances   portion  of  the  bill  should   be  further                                                            
addressed.                                                                                                                      
                                                                                                                                
Senator  Olson opined  that  the rationale  against  establishing  a                                                            
surcharge limit in the bill is not convincing.                                                                                  
                                                                                                                                
Representative  Holm  responded   that  the  bill  is  necessary  as                                                            
demonstrated by  the fact that a small number of property  owners in                                                            
Fairbanks are annually  paying in excess of $4.2 million in property                                                            
taxes to support  E-911 service for all the people  in that area. He                                                            
characterized this as being "inappropriate."                                                                                    
                                                                                                                                
Senator  Olson asked  how this  legislation would  affect people  in                                                            
rural areas of the State.                                                                                                       
                                                                                                                                
Mr. Rudig responded that,  to address this concern, language located                                                            
in Section 10,  on page six, lines eight through 14  of the bill was                                                            
incorporated during its passage through the House.                                                                              
                                                                                                                                
     Sec. 10.  AS 42.05 is amended by adding a new  section to read:                                                            
          Sec. 42.05.295. Routing 911 calls. Notwithstanding AS                                                                 
     42.05.711,  to ensure statewide access by all  residents to 911                                                            
     wireline   services,  traditional   or  enhanced,  each   local                                                            
     exchange  telephone company that  provides wireline  service to                                                            
     an   area  outside   a  municipality   must  route  911   calls                                                            
     originating  from within  its customer  service base through  a                                                            
     toll free  number to a regional  public safety answering  point                                                            
     identified  by the state. In this section, "  municipality" has                                                            
     the meaning given in AS 29.35.137.                                                                                         
                                                                                                                                
Mr. Rudig  explained that  this language would  specify that  a toll                                                            
free  911 number  that would  ring to  a specified  answering  point                                                            
"would be available throughout all of Alaska."                                                                                  
                                                                                                                                
Senator  Olson  stated  that his  primary  concern  is to  whom  the                                                            
financial  responsible  for this  service would  fall; specifically                                                             
whether it would be reflected on rural residents' phone bills.                                                                  
                                                                                                                                
Mr. Rudig clarified that  a municipality must have an established E-                                                            
911  service  in order  to  implement  a  surcharge;  therefore,  he                                                            
continued, most rural areas would be exempt from a fee.                                                                         
                                                                                                                                
Senator  Olson understood  therefore  that  the bill  would have  no                                                            
financial affect on rural citizens.                                                                                             
                                                                                                                                
Mr. Rudig  expressed that  this would be  the case. Furthermore,  he                                                            
stated  that  while a  community  such  as Bethel  or  Barrow  might                                                            
consider  implementing an  E-911 system in  their municipality,  the                                                            
fact, as attested by the  experiences of the cities of Fairbanks and                                                            
Anchorage,  that  there is  "no  way to  recover  the  cost" of  the                                                            
service would be a deterrent.                                                                                                   
                                                                                                                                
Senator Olson concluded  that this legislation would not financially                                                            
affect rural residents.                                                                                                         
                                                                                                                                
Co-Chair  Wilken   stated  that  the  surcharges  imposed   by  this                                                            
legislation would be limited  to those areas having an E-911 system.                                                            
                                                                                                                                
Representative  Holm  expressed  that  this  legislation  would  not                                                            
impose a surcharge on rural residents.                                                                                          
                                                                                                                                
Senator Olson  acknowledged that this  legislation would  not affect                                                            
rural residents.                                                                                                                
                                                                                                                                
Co-Chair Wilken  clarified that cell phone users in  a place such as                                                            
Barrow  could  be  charged  a  911  surcharge  were  their  city  to                                                            
incorporate an Enhanced 911 system in their community.                                                                          
                                                                                                                                
Senator  Bunde stated  that,  currently, there  are  a multitude  of                                                            
areas, remote  or otherwise,  where people,  when calling 911  would                                                            
get an  operator. He voiced  that a Universal  Service fee  provides                                                            
for  the cost  of  providing  this  service on  a  Statewide  basis;                                                            
however,  he  clarified  that the  Enhanced  911  Service  fee is  a                                                            
separate and local option issue.                                                                                                
                                                                                                                                
Co-Chair  Green  asked for  clarification  regarding  the  sponsor's                                                            
remarks about  the availability of  911 calls throughout  the State.                                                            
                                                                                                                                
Mr. Rudig  responded that,  currently, in some  parts of the  State,                                                            
calling  911 is a  long distance  call and  is often  answered  by a                                                            
recording. He noted that,  as per Section 10 in this bill, 911 calls                                                            
from throughout  the State would be toll free and  would be answered                                                            
by  a 911  call  center. He  stated  that  this provision  would  be                                                            
limited to standard  911 services rather than Enhanced  911 service.                                                            
                                                                                                                                
Co-Chair Green  asked for further information about  the funding for                                                            
this service.                                                                                                                   
                                                                                                                                
Representative  Holm  responded  that,  while he  is unsure  of  the                                                            
funding mechanism,  federal law mandates  statewide 911 service.  He                                                            
stated  that  within   the  State  today,  there   is  "a  point  of                                                            
contention"   regarding  whether   all  telephone   utilities   were                                                            
compliant  with this order.  He stated that  language in Section  10                                                            
would align the State with federal law.                                                                                         
                                                                                                                                
Representative  Holm commented that the Department  of Public Safety                                                            
is responsible  for routing  these calls. He  exampled that  were he                                                            
near  the  community  of  North  Way  while  driving  en-route  from                                                            
Fairbanks  to  Juneau  and used  his  cell  phone  to call  911  for                                                            
assistance,  his  911 call  would  be routed  to the  Department  of                                                            
Public Safety in Fairbanks  who would, in turn, send assistance from                                                            
North Way.                                                                                                                      
                                                                                                                                
Representative  Holm noted  that various regions  of the State  have                                                            
different response systems  and that some Enhanced 911 areas utilize                                                            
Global Positioning  Satellites (GPS) to assist in  locating those in                                                            
need.  He declared  that  having  a cell  phone  on your  person  is                                                            
beneficial as it could be "a life-saving device."                                                                               
                                                                                                                                
Amendment #1: This amendment  deletes " may be imposed" and replaces                                                            
it with "may  not exceed $1" following  "surcharge" in Section  4(a)                                                            
on page four, line three. This language would read as follows.                                                                  
                                                                                                                                
     The [FOR  A MUNICPALITY WITH  A POPULATION OF 100,000  OR MORE,                                                            
     AN} enhanced  911 surcharge may  not exceed $1 [MAY  NOT EXCEED                                                            
     50 CENTS PER] month  for each wireless telephone number, or for                                                            
     wireline  telephones, each [50 CENTS PER] month  for each local                                                            
     exchange  billing statement for  a residential customer  or for                                                            
     each  access  line  for a  commercial  customer  [FOR  WIRELINE                                                            
     TELEPHONES. FOR A  MUNICIPALITY WITH FEWER THAN 100,000 PEOPLE,                                                            
     AN ENCHANCED  911 SURCHARGE MAY  NOT EXCEED 75 CENTS  PER MONTH                                                            
     FOR  EACH WIRLESS TELEPHONE  NUMBER OR  75 CENTS PER MONTH  FOR                                                            
     EACH LOCAL EXCHANGE ACCESS LINE FOR WIRELINE TELEPHONES].                                                                  
                                                                                                                                
     New Text Underlined [BRACKETED TEXT DELETED]                                                                               
                                                                                                                                
In addition,  this amendment  deletes all  material in Section  4(a)                                                            
beginning on page four,  line 18 through line 21, following the word                                                            
"system". This language currently reads as follows.                                                                             
                                                                                                                                
     The municipality may  [ONLY] use the enhanced 911 surcharge for                                                            
     the enhanced 911 system  and for the actual labor and equipment                                                            
     used to provide emergency  services dispatch, but not for costs                                                            
     of  providing  the  medical,  police, fire,  rescue,  or  other                                                            
     emergency service, or for any other purpose.                                                                               
                                                                                                                                
Co-Chair Green moved to adopt Amendment #1                                                                                      
                                                                                                                                
Co-Chair Wilken objected for discussion.                                                                                        
                                                                                                                                
Co-Chair  Green   explained  that  this  amendment   would  limit  a                                                            
municipality's  monthly E-911 surcharge  to no more than  one-dollar                                                            
and  would  delete  language  in  the  bill  that  would  allow  the                                                            
municipality to utilize  these funds for labor and emergency medical                                                            
dispatch,  as she opined  that someone would  allot these  surcharge                                                            
funds  to  expenses  beyond  the cost  of  the  system  itself.  She                                                            
recalled that the original  intent of implementing the surcharge was                                                            
to offset  the  cost of the  system.  In summary,  she voiced  being                                                            
opposed to the lack of  a limit being placed on the surcharge as the                                                            
cost might  be inflated  to provide  for an  elaborate operation  as                                                            
well, She also voiced concern  regarding the fact that no definition                                                            
of what  the funds  could be used  for is included  in the bill.  In                                                            
addition,   she   expressed    concern   regarding    the   apparent                                                            
"discrepancy"  in the costs  of providing  Enhanced 911 services  as                                                            
depicted in  the aforementioned comparison  costs for the  cities of                                                            
Fairbanks,  Anchorage, Kenai  and Juneau, as  she stated, that  were                                                            
the  systems  similar,  the  revenues and  expenses  would  be  more                                                            
comparable based on population."                                                                                                
                                                                                                                                
Senator  Dyson   asked  Co-Chair   Green  for  further  information                                                             
regarding  the reason  to  delete language  pertaining  to  medical,                                                            
police, fire,  and rescue,  as the bill specifies  that these  items                                                            
should not be included in the costs.                                                                                            
                                                                                                                                
Co-Chair  Green responded  that  the bill  should  address the  hard                                                            
costs of the system itself rather than such things as personnel.                                                                
                                                                                                                                
Senator  Dyson,  Co-Chair  Wilken,  and  Co-Chair   Green  discussed                                                            
reworking the  amendment to qualify that it be limited  to providing                                                            
funding  for the  equipment  rather  than  for personnel  and  other                                                            
costs.                                                                                                                          
                                                                                                                                
Senator  Bunde  spoke  in  favor  of  retaining   the  Amendment  as                                                            
presented.                                                                                                                      
                                                                                                                                
Co-Chair Wilken  asked that, before  further action is taken  on the                                                            
amendment,  that the  bill's sponsor  meet with  Committee staff  to                                                            
develop language to address Committee concerns.                                                                                 
                                                                                                                                
Senator B.  Stevens voiced that defining  the meaning of  "emergency                                                            
services dispatch  system" would assist  in clarifying the  elements                                                            
of the service.  He also pointed out  that language in Section  4 on                                                            
page four, lines  six and seven is confusing in regards  to wireless                                                            
phone surcharges.                                                                                                               
                                                                                                                                
Co-Chair  Wilken  summarized  that the  concerns  requiring  further                                                            
discussion   include:   whether   a  surcharge   limit   should   be                                                            
implemented;   further  defining   the  enhanced  911  system;   and                                                            
addressing the  wireless surcharge language on page  four, lines six                                                            
and seven.                                                                                                                      
                                                                                                                                
Senator Dyson  voiced that he is "not a fan" of establishing  limits                                                            
on what should be charged.                                                                                                      
                                                                                                                                
Co-Chair  Wilken  understood  that Co-Chair  Green  is  in favor  of                                                            
establishing a surcharge limit.                                                                                                 
                                                                                                                                
Senator  Bunde  also  voiced  support for  the  establishment  of  a                                                            
surcharge limit  as he declared that he does not have  confidence in                                                            
municipalities.  He  noted that  while the  bill  specifies that  an                                                            
annual audit of  the surcharge must be conducted,  the bill does not                                                            
clarify  who would  have access  to  those findings.  Therefore,  he                                                            
asked that language pertaining  to the disclosure of the findings be                                                            
included.                                                                                                                       
                                                                                                                                
Co-Chair Green offered a motion to withdraw Amendment #1.                                                                       
                                                                                                                                
There being no objection, the motion was WITHDRAWN.                                                                             
                                                                                                                                
Co-Chair  Green stated that  public utilities  "get the black  eye."                                                            
Therefore,  she  stressed  that  a  municipality   establishing  the                                                            
surcharge   should   conduct   a  campaign   clarifying   that   the                                                            
municipality  rather  than   the utility   is  responsible  for  the                                                            
forthcoming rate change.                                                                                                        
                                                                                                                                
Co-Chair  Wilken ordered  the  bill HELD  in Committee  for  further                                                            
review.                                                                                                                         
                                                                                                                                
RECESS TO THE CALL OF THE CHAIR 8:14 PM / 12:14 AM                                                                              
                                                                                                                                
ADJOURNMENT                                                                                                                 
                                                                                                                                
Co-Chair Gary Wilken adjourned the meeting at 12:15 AM, Tuesday,                                                                
May 11, 2004.                                                                                                                   

Document Name Date/Time Subjects