Legislature(2003 - 2004)
05/10/2004 09:51 AM Senate FIN
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
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 One amendment was withdrawn from consideration, one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action on the adoption of a committee substitute was rescinded, and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withdrawn from consideration.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.
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