Legislature(1995 - 1996)

02/29/1996 03:30 PM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
               SENATE STATE AFFAIRS COMMITTEE                                
                        February 29, 1996                                      
                           3:30 p.m.                                           
                                                                               
  MEMBERS PRESENT                                                              
                                                                               
 Senator Bert Sharp, Chairman                                                  
 Senator Randy Phillips, Vice-Chairman                                         
 Senator Loren Leman                                                           
 Senator Jim Duncan                                                            
                                                                               
  MEMBERS ABSENT                                                               
                                                                               
 Senator Dave Donley                                                           
                                                                               
  COMMITTEE CALENDAR                                                           
                                                                               
 SPONSOR SUBSTITUTE FOR SENATE BILL NO. 181                                    
 "An Act relating to the promotion of Alaska businesses through                
 signs, displays, and devices within or adjacent to highway                    
 rights-of-way, to municipal regulation of directional signs,                  
 displays, and devices, and to penalties for violations related to             
 outdoor advertising."                                                         
                                                                               
 SENATE BILL NO. 207                                                           
 "An Act authorizing the issuance and sale of revenue bonds to fund            
 public wastewater systems, non-point source water pollution control           
 projects, including solid waste management systems, and estuary               
 conservation and management projects; authorizing the use of the              
 Alaska clean water fund to pay and secure the bonds and to pay                
 costs related to issuance and administration of  the bonds;                   
 authorizing certain measures to secure payment of the bonds; and              
 amending Alaska Rule of Civil Procedure 3."                                   
                                                                               
 SSTA - 2/29/96                                                                
                                                                               
 SB 191 (ELECTION CAMPAIGN FINANCE REFORM) was scheduled, but not              
 taken up on this date.                                                        
                                                                               
  PREVIOUS SENATE COMMITTEE ACTION                                             
                                                                               
 SB 181 - No previous senate committee action.                                 
                                                                               
 SB 207 - See Community & Regional Affairs minutes dated 2/5/96,               
          2/14/96, and 2/21/96.                                                
                                                                               
  WITNESS REGISTER                                                             
                                                                               
 Brett Huber, Aide                                                             
 Senator Lyda Green                                                            
 State Capitol, Juneau, Alaska, 99801-1182¶(907)465-6600                       
   POSITION STATEMENT: prime sponsor of SB 181                                 
                                                                               
 Michael Morris, Regional Director                                             
 Alaska Campground Owners Association                                          
 2150 Gambell, Anchorage, AK 99503¶(907)258-6006                               
   POSITION STATEMENT: supports SB 181                                         
                                                                               
 Bonny Eby, Owner                                                              
 Willow Trading Post Lodge                                                     
 Box 49, Willow, AK 99688¶(907)495-6457                                        
   POSITION STATEMENT: supports SB 181, but lists problems with                
       program                                                                 
                                                                               
 Larae Eldridge, Owner                                                         
 Big Lake Motel                                                                
 Box 520728, Big Lake, AK 99652¶(907)892-7976                                  
   POSITION STATEMENT: supports SB 181                                         
                                                                               
 Jerre Wroble, Program Administrator                                           
 Matsu Convention & Visitors' Bureau                                           
 HCO1 Box 6166-J21, Palmer, AK 99645¶(907)746-5000                             
   POSITION STATEMENT: supports SB 181                                         
                                                                               
 Tina Lindgren, Executive Director                                             
 Alaska Convention & Visitors' Bureau                                          
 3201 C St., Ste. 403, Anchorage, AK 99503¶(907)561-5733                       
   POSITION STATEMENT: supports SB 181                                         
                                                                               
 Loren Rasmussen, Acting Director                                              
 Division of Engineering & Operations                                          
 Department of Transportation                                                  
 3132 Channel Dr., Juneau, AK 99801-7898¶(907)465-2960                         
   POSITION STATEMENT: testified on SB 181                                     
                                                                               
 Mayor John Stein                                                              
 290 E. Herning, Wasilla, AK 99654¶(907)373-9055                               
   POSITION STATEMENT: supports SB 181                                         
                                                                               
 Keith Kelton, Director                                                        
 Division of Facility Construction & Operation                                 
 Department of Environmental Conservation                                      
 410 Willoughby Ave., Ste 105, Juneau, AK 99801-1795¶(907)465-5180             
   POSITION STATEMENT: representing governor-prime sponsor of SB 207           
                                                                               
 Berda Willson                                                                 
 Nome Joint Utilities                                                          
 City of Nome                                                                  
 Box 70, Nome, AK 99762¶(907)443-5288                                          
   POSITION STATEMENT: supports SB 207                                         
                                                                               
 Mark Earnest, Manager                                                         
 City of Unalaska                                                              
 P.O. Box 610, Unalaska, AK 99685¶(907)581-1251                                
   POSITION STATEMENT: supports SB 207                                         
                                                                               
 Ross Kinney, Deputy Commissioner                                              
 Department of Revenue                                                         
 P.O. Box 110405, Juneau, AK 99811-0405¶(907)465-4880                          
   POSITION STATEMENT: testified on SB 207                                     
                                                                               
  ACTION NARRATIVE                                                             
                                                                               
 SSTA - 2/29/96                                                                
                                                                               
            SB 181 PROHIBITED HIGHWAY ADVERTISING                            
                                                                               
 TAPE 96-16, SIDE A                                                            
                                                                               
 Number 001                                                                    
                                                                               
 CHAIRMAN SHARP called the Senate State Affairs Committee to order             
 at 3:30 p.m. and brought up SB 181 as the first order of business             
 before the committee.  The chairman called the sponsor's                      
 representative to testify.                                                    
                                                                               
 Number 020                                                                    
                                                                               
 BRETT HUBER, Aide to Senator Lyda Green, prime sponsor of SB 181,             
 read the sponsor's statement for SB 181.  SB 181 would provide for            
 the TODS (Tourist Oriented Directional Signs) Program in statute.             
 Mr. Huber noted that there is a sectional analysis of the                     
 legislation in committee members' packets.                                    
                                                                               
 Number 050                                                                    
                                                                               
 SENATOR LEMAN asked if the TODS program is the same as the                    
 identification signs that he sees along the highways.                         
                                                                               
 MR. HUBER replied that is the TODS program.  The TODS signs are the           
 blue, 90x18 inch directional signs.                                           
                                                                               
 MICHAEL MORRIS, Regional Director, Alaska Campground Owners                   
 Association, testifying from Anchorage, supports SB 207, and has              
 submitted written testimony to that effect.  TODS signs not only              
 help the campgrounds, but help visitors immensely.                            
                                                                               
 Number 100                                                                    
                                                                               
 BONNY EBY, Owner, Willow Trading Post Lodge, testifying from Matsu,           
 stated that the signs help, but they should be larger.  They are              
 also expensive for the small business person.  She also has a                 
 problem with the fact that the signs are not transferrable when a             
 business is sold.  She also thinks that for the amount of money the           
 signs cost, there should be upkeep on the signs, such as snow                 
 removal.                                                                      
                                                                               
 Number 135                                                                    
                                                                               
 LARAE ELDRIDGE, Owner, Big Lake Motel, testifying from Matsu,                 
 supports SB 181.  But she stated that the community sign posted               
 below hers does not comply with the TODS program and is illegal.              
 She would appreciate it if the state would get Big Lake a green               
 geographical sign, just like everyone else.  She also objects to              
 the adopt-a-highway signs.                                                    
                                                                               
 Number 185                                                                    
                                                                               
 JERRE WROBLE, Program Administrator, Matsu Convention & Visitors'             
 Bureau, testifying from Matsu, supports SB 181.  She stated that              
 highway signs are essential for their survival.  Ms. Wroble                   
 mentioned some problems with the TODS program, including one woman            
 who would have been required to hire a licensed contractor to                 
 install the sign, even though her husband was a contractor.  The              
 regulations and expense make it difficult for new businesses to get           
 going.  In principal, the MSCVB supports the TODS program, as long            
 as all its' members are allowed to participate without undue                  
 regulation and expense.                                                       
                                                                               
 Number 240                                                                    
                                                                               
 TINA LINDGREN, Executive Director, Alaska Visitors' Association,              
 supports SB 181.  Committee members have two letters in support of            
 this legislation in their bill packets from Ms. Lindgren: one dated           
 October 17, 1995, and the other dated February 23, 1996.                      
                                                                               
 Number 260                                                                    
                                                                               
 CHAIRMAN SHARP asked Mr. Rasmussen from the Department of                     
 Transportation about the fiscal note from the department.  Doesn't            
 SB 181 propose the exact same signage as allowed now under the TODS           
 program?  If so, why is the fiscal note for such a large amount of            
 money?                                                                        
                                                                               
 Number 275                                                                    
                                                                               
 LOREN RASMUSSEN, Acting Director, Division of Engineering &                   
 Operations, Department of Transportation, stated there is a                   
 difference between how SB 181 is written, and how the TODS program            
 works:  the TODS program is a directional sign that is literally on           
 the shoulder of the road.  Those are the little, blue signs one               
 sees in the Matsu Valley, on the Kenai Peninsula, and a few other             
 areas of the state.  SB 181 tries to utilize the same technique,              
 but putting the signs outside the right-of-way, which then makes              
 them advertising signs, which would be different from the TODS                
 program.  Advertising signs outside the right-of-way are                      
 controversial.  So we would have to promulgate those regulations              
 with the Department of Law and would have to have public hearings             
 on those regulations.  That is where the costs in the fiscal note             
 originate.                                                                    
                                                                               
 Number 300                                                                    
                                                                               
 SENATOR RANDY PHILLIPS asked if there would be a difference in the            
 size of the signs.                                                            
                                                                               
 MR. RASMUSSEN is not sure what size the signs would be; he thinks             
 that would be determined by regulation.  Currently, the size of a             
 sign with a single business on it is 90x18 inches.  18 inches can             
 be added for each additional business on a sign, with up to a total           
 of three businesses per sign.                                                 
                                                                               
 SENATOR RANDY PHILLIPS thinks the signs would still be 90x18 inches           
 high.                                                                         
                                                                               
 CHAIRMAN SHARP noted that the legislation lists the same size as              
 that of the TODS program.                                                     
                                                                               
 SENATOR RANDY PHILLIPS noted that since the size of the signs is              
 the same in both the TODS program and SB 181, the only fundamental            
 difference is that signs would be allowed outside the right-of-way.           
 He asked if any other jurisdictions have this.                                
                                                                               
 MR. RASMUSSEN responded, none that he could find, and they checked            
 with 11 other states.  Other states have these types of signs on              
 highways, but none have them out of the right-of-way.                         
                                                                               
 CHAIRMAN SHARP asked about costs for the TODS permits.                        
                                                                               
 MR. RASMUSSEN replied that the application fee is $100.00, and                
 there is a $200.00 inspection fee once the sign is in place.                  
                                                                               
 CHAIRMAN SHARP asked if DOT puts a sign up for that price.                    
                                                                               
 MR. RASMUSSEN responded DOT does the permitting and the inspection,           
 but the owner buys, installs, and maintains the sign.                         
                                                                               
 SENATOR RANDY PHILLIPS asked why someone complained about DOT's               
 maintenance of signs, if DOT doesn't maintain them.                           
                                                                               
 MR. RASMUSSEN responded the complaint was that DOT doesn't maintain         
 the signs.                                                                    
                                                                               
 SENATOR RANDY PHILLIPS asked if that was part of the agreement.               
                                                                               
 MR. RASMUSSEN responded that is part of the agreement.                        
                                                                               
 SENATOR DUNCAN asked if there is a departmental position on SB 181.           
                                                                               
 MR. RASMUSSEN thinks the department would take the same position              
 the previous administration took.                                             
                                                                               
 SENATOR RANDY PHILLIPS asked what that was.                                   
                                                                               
 MR. RASMUSSEN did not think it was very favorable.  If a position             
 paper is requested, DOT would certainly submit it.                            
                                                                               
 SENATOR DUNCAN commented he can understand the reason behind the              
 department's concerns.                                                        
                                                                               
 CHAIRMAN SHARP stated he did not know the reasons behind their                
 concerns.                                                                     
                                                                               
 SENATOR DUNCAN said that's why he is asking for a position paper.             
 He would ask for a position paper, unless the chairman doesn't want           
 one.                                                                          
                                                                               
 CHAIRMAN SHARP responded, if DOT cares to submit a position                   
 statement, he would sure like to see it.  He asks that paper be               
 submitted to committee staff.                                                 
                                                                               
 SENATOR DUNCAN stated he is not suggesting the State Affairs                  
 Committee hold the bill for the position paper; he would just like            
 to see it before the bill reaches the floor.                                  
                                                                               
 CHAIRMAN SHARP called the mayor of Wasilla to testify.                        
                                                                               
 Number 375                                                                    
                                                                               
 JOHN STEIN, Mayor of Wasilla, testifying from Matsu, supports SB              
 181.  He does not understand why off-right-of-way signs need to be            
 in the legislation, because he believes property owners whose                 
 property abuts the highway have a right to put up advertising                 
 signs.  He thinks federal law would allow that.  He hopes that the            
 law would not allow off-site advertising other than something like            
 the TODS program.  Mayor Stein stated one of the biggest                      
 frustration business owners have regarding the signs is that DOT              
 knocks them down during snow plowing.                                         
                                                                               
 Number 410                                                                    
                                                                               
 SENATOR RANDY PHILLIPS asked what Mayor Stein thinks about having             
 signs out of the right-of-way.                                                
                                                                               
 MAYOR STEIN responded he does not see a need to have this type of             
 sign out of the right-of-way.                                                 
                                                                               
 Number 440                                                                    
                                                                               
 SENATOR RANDY PHILLIPS made a motion to adopt the committee                   
 substitute for SB 181.                                                        
                                                                               
 CHAIRMAN SHARP, hearing no objection, stated the committee                    
 substitute was adopted.                                                       
                                                                               
 CHAIRMAN SHARP stated he personally doesn't have a problem with               
 having these signs off the right-of-way.  The main problem he sees            
 is that sometimes one cannot read the signs, because they're                  
 covered with snow.  If the signs were off the right-of-way, they              
 might not get plastered with snow by the snowplows.                           
                                                                               
 SENATOR LEMAN stated his only concern regards the number of signs             
 and repetition of signs.                                                      
                                                                               
 CHAIRMAN SHARP shares Senator Leman's concern, but he thinks that             
 would probably be addressed through regulation.                               
                                                                               
 SENATOR LEMAN has concern with the $40,000 fiscal note.                       
                                                                               
 CHAIRMAN SHARP would just as soon send the bill to the Finance                
 Committee and let them address the fiscal note.  He doesn't like              
 zeroing out fiscal notes in State Affairs, unless it was the                  
 committee's own fiscal note.                                                  
                                                                               
 Number 485                                                                    
                                                                               
 SENATOR RANDY PHILLIPS asked if there is anyone in Matsu who would            
 comment on the within and outside the right-of-way.                           
                                                                               
 Number 495                                                                    
                                                                               
 MS. EBY believes that inside the right-of-way signs are more                  
 legible.                                                                      
                                                                               
 SENATOR RANDY PHILLIPS noted that the bill specifies that signs               
 shall be located within and outside of the right-of-way of the                
 interstate.  He asked for feedback regarding striking "outside"               
 from SB 181.                                                                  
                                                                               
 MS. EBY thinks signs should be within the right-of-way.                       
                                                                               
 CHAIRMAN SHARP thinks more than "outside" would have to be struck             
 from the bill.                                                                
                                                                               
 SENATOR RANDY PHILLIPS wants to know if most of the people in Matsu           
 would like to see signs just within the right-of-way.                         
                                                                               
 MS. WROBLE stated she also wondered why signs would be allowed                
 outside the right-of-way the first time she saw SB 181.  But a                
 situation that supports that provision concerns a business she                
 knows of which is on the highway, but is around the bend.  If you             
 didn't know about that business, you would drive right past it.               
 The owner of that business has a small sign on her property just              
 off the right-of-way.  The owner does not qualify for the TODS                
 program because her business is on the highway, so Ms. Wroble                 
 thinks "outside the right-of-way" would serve someone in that type            
 of situation.                                                                 
                                                                               
 SENATOR RANDY PHILLIPS stated that most testimony seems to be                 
 supporting just having signs within the right-of-way.  But we can             
 take care of that in the Finance Committee.                                   
                                                                               
 SENATOR DUNCAN thinks that whole subsection could be removed.                 
                                                                               
 MR. HUBER stated Senator Green has been contacted by numerous                 
 people wanting directional signs outside the right-of-way.  Senator           
 Green is looking for the smallest and most uniform system allowing            
 signs on private property.                                                    
                                                                               
 Number 530                                                                    
                                                                               
 SENATOR DUNCAN made a motion to delete Section (4).                           
                                                                               
 CHAIRMAN SHARP informed Senator Duncan that Section (4) is the                
 section mandating the directional sign program.                               
                                                                               
 SENATOR DUNCAN asked if that is so.                                           
                                                                               
 MR. HUBER responded that Section (4) is actually the portion of SB            
 181 that puts the TODS program in statute.  There is no current law           
 or current regulations under TODS.                                            
                                                                               
 SENATOR DUNCAN asked Mr. Huber if he is suggesting that we need               
 part of Section (4), but not all of Section (4).                              
                                                                               
 MR. HUBER replied it is the sponsor's position that all of Section            
 (4) is desirable.                                                             
                                                                               
 SENATOR DUNCAN said he knows that.  He wants to ask someone who is            
 not biased, if he can find anybody.  What language of Section (4)             
 is necessary for establishing the program, but would still allow              
 deletion of "outside the right-of-way".  Maybe DOT would respond;             
 he knows very well the sponsor's position.                                    
                                                                               
 SENATOR LEMAN said that DOT is probably biased too.                           
                                                                               
 SENATOR DUNCAN stated that's what he said: he doesn't think they              
 can find anyone who's not biased.                                             
                                                                               
 MR. RASMUSSEN stated he would be reluctant to make amendments                 
 without reading the whole bill through.  It would be the                      
 department's desire to keep the TODS program in place right now.              
 It's allowed under the MUTCED and the rest of our program, and                
 we've never been challenged on that.                                          
                                                                               
 Number 566                                                                    
                                                                               
 SENATOR DUNCAN offered a conceptual amendment not allowing signs              
 outside the right-of-way.                                                     
                                                                               
 CHAIRMAN SHARP objected to that amendment.                                    
                                                                               
 SENATOR RANDY PHILLIPS asked for clarification on where TODS signs            
 are allowed today.                                                            
                                                                               
 MR. RASMUSSEN responded that TODS signs are allowed within the                
 right-of-way.  Anything outside the right-of-way would be                     
 considered an advertisement, and present state law forbids that.              
                                                                               
 CHAIRMAN SHARP noted that SB 181 would make those signs                       
 directional.                                                                  
                                                                               
 MR. RASMUSSEN replied that is the attempt; but it is very difficult           
 to have directional signs outside the right-of-way.                           
                                                                               
 CHAIRMAN SHARP asked that the roll be called on Senator Duncan's              
 motion.                                                                       
                                                                               
 The amendment failed, 2 yeas, 2 nays, and 1 absent.  Voting in                
 favor of the motion are Senators Phillips and Duncan.  Voting in              
 opposition are Senators Leman and Sharp.  Senator Donley is absent.           
                                                                               
 CHAIRMAN SHARP asked the pleasure of the committee.                           
                                                                               
 Number 580                                                                    
                                                                               
 SENATOR LEMAN made a motion to discharge SB 181 with accompanying             
 fiscal note [DOT, $40,000].                                                   
                                                                               
 CHAIRMAN SHARP noted that the bill will need a referral to the                
 Finance Committee.  He also noted that the committee would like a             
 position statement from DOT.  The chairman asked if there was                 
 objection to moving the bill from committee.                                  
                                                                               
 TAPE 96-16, SIDE B                                                            
                                                                               
 CHAIRMAN SHARP, hearing no objection, stated CSSSSB 181(STA) was              
 discharged from the Senate State Affairs Committee with individual            
 recommendations.                                                              
 SSTA - 2/29/96                                                                
                                                                               
         SB 207 REVENUE BONDS: WATER & WASTE PROJECTS                        
                                                                               
 Number 585                                                                    
                                                                               
 SENATOR SHARP brought up SB 207 as the next order of business                 
 before the Senate State Affairs Committee and called the first                
 witness.                                                                      
                                                                               
 Number 570                                                                    
                                                                               
 KEITH KELTON, Director, Division of Facility Construction &                   
 Operation, Department of Environmental Conservation, representing             
 the governor, prime sponsor of SB 207, stated the bill would                  
 attempt to solve a financing problem facing Alaskan communities.              
 Mr. Kelton relayed information to the committee which is contained            
 in members' bill packets.  This information was previously relayed            
 to the Senate Community and Regional Affairs Committee.                       
                                                                               
 Number 550                                                                    
                                                                               
 MR. KELTON explains flow charts showing how the program would work.           
 Copies of those charts were given to the committee.  DEC is                   
 proposing that the 30 million corpus be leveraged into a larger               
 source of funding.  SB 207, which was drafted with the help of the            
 Department of Revenue, the Department of Law, and outside bond                
 counsel, is patterned after similar legislation from 20 other                 
 states and would expand available revenue to continue a current               
 clean-water program.  Amendments made to SB 207 in the Senate                 
 Community & Regional Affairs Committee limited the annual sale of             
 bonds to $15,000,000.  After bond and sale costs, that leaves about           
 $13,300,000 available for loans.  The federal/state match program             
 will have a contribution.  But since the Clean Water Act is                   
 currently under reauthorization, we don't know what that dollar               
 figure will be.  So that will ultimately have the effect of                   
 increasing the incoming cash.  Mr. Kelton noted that the figures in           
 the chart are for illustrative purposes only, and that they can               
 fluctuate.                                                                    
                                                                               
 Number 495                                                                    
                                                                               
 MR. KELTON commented that DEC is very pleased with the amendments             
 made by the CRA committee.                                                    
                                                                               
 Number 485                                                                    
                                                                               
 SENATOR LEMAN asked if 10% costs for bond sales are normal.                   
                                                                               
 MR. KELTON responded those are normal costs, assuming the bonds are           
 AA rated.  Costs would increase if the bond rating falls.  There              
 are provisions in the legislation which would attempt to maintain             
 the rating at AA.  One of those is the state-aid intercept, on page           
 5 of SB 207.  That would specify that if there is a default, the              
 state agencies would have the opportunity to take any revenue                 
 enhancements coming to a community from the state.  They couldn't             
 take dedicated funds, but they could take undedicated funds to                
 apply to the debt.  That particular provision, by itself, enhances            
 the bond rating from A to AA, and would save about $2,800,000 over            
 a twenty-year period on each $10,000,000 issuance.  So the bond               
 costs are very high, and they can go much higher without the                  
 language contained in the legislation.                                        
                                                                               
 Number 475                                                                    
                                                                               
 MR. KELTON stated another aspect is that bond proceeds could be               
 used for the 20% state match to federal contributions, if SB 207 is           
 passed.  Currently that 20% comes out of the general fund, so that            
 would save the state some money.                                              
                                                                               
 Number 467                                                                    
                                                                               
 SENATOR LEMAN asked if there is a maximum limit for any single                
 project.                                                                      
                                                                               
 MR. KELTON replied one project could arguably use all the funds for           
 one year; it is not DEC's intent to do that though.  There were               
 amendments discussed in Senate CRA Committee.  One suggestion that            
 was made was that any one project would be limited to half of an              
 annual allocation.  DEC conducts an annual intended use plan for              
 this fund, which ranks and coordinates funding for projects.  It              
 would not be DEC's intent to allocate an entire year's allocation             
 to one project.                                                               
                                                                               
 SENATOR LEMAN commented that this fund could be a source for the              
 Anchorage Water Project.  Yet any one portion of that would                   
 probably use at least half of the available money.                            
                                                                               
 MR. KELTON responded that committee members have in their bill                
 packets a list of past projects and potential future projects.                
 However, this program does not fund water projects; it only funds             
 wastewater and solid waste projects.  To get back to Senator                  
 Leman's premise, this program has funded many large projects in               
 Anchorage, including a $10,000,000 addition to the Anchorage                  
 Landfill.  Senator Leman has raised a concern, especially of a lot            
 of the smaller communities who might visualize no money being                 
 available if Anchorage were to suck it all up in one year.  DEC               
 would hope to prevent that, with or without statutory language.               
                                                                               
 SENATOR LEMAN asked why water projects aren't funded from this                
 program.  Is there another source for water projects?                         
                                                                               
 MR. KELTON replied that this particular program is under the                  
 Federal Clean Water Act, which only addresses wastewater projects.            
 There is a very strong likelihood that there will be a similar                
 program in place for drinking water within the next year, as soon             
 as congress reauthorizes the Safe-Drinking Water Act.                         
                                                                               
 SENATOR LEMAN thought Alaska had two different programs, one for              
 wastewater, and one for water.                                                
                                                                               
 Number 430                                                                    
                                                                               
 MR. KELTON responded Senator Leman is correct: there are two                  
 authorizations in the Alaska Clean-Water Fund.  One addresses                 
 wastewater, which is capitalized by the federal government.  There            
 is also a corresponding state only section, which would allow this            
 type of program for drinking-water projects.  However, that would             
 require capitalization by the state, and it's never been                      
 capitalized.  There is probably little advantage to using that                
 program, as long as there is a grants program in place.                       
                                                                               
 SENATOR LEMAN remembers proposing capitalizing the drinking-water             
 program, but he thinks Senator Duncan blocked it.                             
                                                                               
 CHAIRMAN SHARP asked what the current annual amount from the                  
 federal government was.                                                       
                                                                               
 MR. KELTON responded that for each federal dollar, the state                  
 matches it 20%.  The last federal appropriation was about                     
 $7,500,000.  The state's portion of that would be 20% of that for             
 another $1,500,000.  That would mean an annual increase of                    
 $9,000,000.  Passage of SB 207 this year would allow us to have a             
 larger corpus, because as new loans are made, the corpus decreases.           
 So the sooner this passes, the larger the corpus will be.                     
                                                                               
 CHAIRMAN SHARP asked where the original funding came from that                
 makes up the current corpus of $30,000,000.                                   
                                                                               
 MR. KELTON responded the corpus is made up of several years'                  
 accumulation of state and federal appropriations.  Over the last              
 two years, demand for the program has doubled, to the point where             
 in two years, at the current rate of demand, the fund will be                 
 diminished.                                                                   
                                                                               
 CHAIRMAN SHARP asked if all the funds going out are in the form of            
 loans, and not grants.                                                        
                                                                               
 Number 395                                                                    
                                                                               
 MR. KELTON responded that this program is entirely a loan program.            
 Over the six-year history of this program, there has never been a             
 single late payment.                                                          
                                                                               
 SENATOR LEMAN asked for an explanation of "other qualified entity".           
                                                                               
 MR. KELTON responded that term was added primarily at the direction           
 of Senator Torgerson, who was concerned that service districts and            
 other entities that might lie outside an incorporated community's             
 boundary be allowed to work in conjunction with a community to                
 secure these funds, as long as the revenue stream was dedicated               
 back.  So basically, we cannot make a loan to any entity unless an            
 incorporated community is part of the contractual agreement.  But             
 it does clarify that it is intended to benefit service districts              
 and other entities outside incorporated boundaries.                           
                                                                               
 Number 370                                                                    
                                                                               
 BERDA WILLSON, Assistant Manager - Nome Joint Utilities, also                 
 speaking on behalf of the City of Nome, testifying from Nome,                 
 supports SB 207.  She stated that both NJU and the City of Nome               
 have taken advantage of this fund.  With the decline in state                 
 revenues, municipalities are hard pressed to find low-cost funding            
 such as this.  She supported removing language giving state                   
 agencies access to this fund: she does not think it would be fair             
 for municipalities to have to compete against the state for these             
 funds.                                                                        
                                                                               
 It was noted that Mr. Lee Sharp was on-line via teleconference to             
 answer questions regarding bond ratings.                                      
                                                                               
 Number 335                                                                    
                                                                               
 MARK EARNEST, Manager, City of Unalaska, testifying from Unalaska,            
 supports SB 207.  Like communities throughout the state, Unalaska             
 is facing significant financial impacts resulting from unfunded               
 federal mandates.  The largest of those for Unalaska is the                   
 landfill.  We also have an upgrade due for our wastewater treatment           
 plant with an estimated cost of $6,300,000.  Unalaska is also                 
 looking at possible costs of $16,000,000 for the water system, plus           
 $500,000 in operating costs.  To put these costs in perspective,              
 the population of Unalaska is about 4,000.  Mr. Earnest stated that           
 Unalaska has to proceed with these projects; they are not optional.           
 However, even with available grants and rate increases, they cannot           
 do it all themselves.  They really need to be able to turn to a               
 low-interest loan program, such as the program that SB 207 would              
 establish.  He encouraged support of SB 207.                                  
                                                                               
 Number 300                                                                    
                                                                               
 CHAIRMAN SHARP asked if the bonds will contain a reference to the             
 full faith and credit of the State of Alaska.                                 
                                                                               
 MR. KELTON does not think that is a condition on the revenue bonds.           
                                                                               
 ROSS KINNEY, Deputy Commissioner, Department of Revenue, stated Mr.           
 Kelton is correct: the bonds would not pledge full faith and credit           
 of the State of Alaska.  The revenue stream pledged by the                    
 communities would be the collateral.                                          
                                                                               
 Number 285                                                                    
                                                                               
 CHAIRMAN SHARP asked how the loan application would work.                     
                                                                               
 MR. KELTON responded that one of the advantages of revenue bonds is           
 that they do not require voter approval.  So a project can be                 
 initiated more quickly with just assembly action authorizing an               
 application to the department for these funds.  There has to be a             
 dedicated user-fee stream coming back that can be applied toward              
 repayment of the bond.  This program would be available for                   
 wastewater and solid waste projects.  The tie to solid waste                  
 projects is the threat for groundwater pollution potential.  Point            
 or non-point source, or even an estuarian enhancement could be                
 funded, even though we've never had one of those.                             
                                                                               
 Number 265                                                                    
                                                                               
 CHAIRMAN SHARP asked if this would be an avenue for local                     
 governments to apply for funding for solid waste programs.                    
                                                                               
 MR. KELTON responded it would, and Anchorage has already done so.             
                                                                               
 CHAIRMAN SHARP asked the pleasure of the committee.                           
                                                                               
 Number 240                                                                    
                                                                               
 SENATOR LEMAN thinks SB 207 is a good source of funds for                     
 wastewater and solid waste projects, and gets away from the concept           
 of grants.  Senator Leman made a motion to discharge CSSB 207(CRA)            
 and accompanying zero fiscal notes [from DEC & DOR] from the Senate           
 State Affairs Committee with individual recommendations.                      
                                                                               
 CHAIRMAN SHARP commented the state is duty-bound to give as much              
 access to funding as possible, and this pool-type arrangement                 
 should result in a lower interest rate than municipalities could              
 get individually.                                                             
                                                                               
 CHAIRMAN SHARP, hearing no objection, stated SB 207 was released              
 from committee.                                                               
 SSTA - 2/29/96                                                                
                                                                               
        SJR 13 RATIFYING FED BALANCED-BUDGET AMENDMENT                       
                                                                               
 SENATOR RANDY PHILLIPS brought up SJR 13 as the next order of                 
 business before the Senate State Affairs Committee.  He stated SCR            
 13 is a resolution in support of a balanced-budget amendment.  By             
 amending the U.S. Constitution, he thinks we can get back on track,           
 as far as fiscal responsibility is concerned.                                 
                                                                               
 CHAIRMAN SHARP asked if there were any comments on the legislation.           
 Hearing none, he asked the pleasure of the committee.                         
                                                                               
 SENATOR RANDY PHILLIPS made a motion to discharge SJR 13 from the             
 Senate State Affairs Committee.                                               
                                                                               
 Number 205                                                                    
                                                                               
 CHAIRMAN SHARP, hearing no objection, stated SJR 13 was discharged            
 from committee.                                                               
 SSTA - 2/29/96                                                                
                                                                               
         SB 207 REVENUE BONDS: WATER & WASTE PROJECTS                        
                                                                               
 Number 180                                                                    
                                                                               
 SENATOR LEMAN noted that he might have a conflict of interest on SB           
 207, as he is a consulting engineer.                                          
                                                                               
 CHAIRMAN SHARP adjourned the Senate State Affairs Committee meeting           
 at 4:56 p.m.                                                                  
                                                                               

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