Legislature(1995 - 1996)
02/29/1996 03:30 PM STA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
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.