HOUSE FINANCE COMMITTEE APRIL 23, 1996 1:45 P.M. TAPE HFC 96 - 132, Side 1, #000 - end. TAPE HFC 96 - 132, Side 2, #000 - end. TAPE HFC 96 - 133, Side 1, #000 - end. TAPE HFC 96 - 133, Side 2, #000 - #250. CALL TO ORDER Co-Chair Mark Hanley called the House Finance Committee meeting to order at 1:45 P.M. PRESENT Co-Chair Hanley Representative Martin Co-Chair Foster Representative Mulder Representative Brown Representative Navarre Representative Grussendorf Representative Parnell Representative Kelly Representative Therriault Representative Kohring ALSO PRESENT Senator John Torgerson; Deb Davidson, Staff, Senator John Torgerson; Ken Erickson, Staff, Senator Drue Pearce; Jim Stratton, Director, Division of Parks & Outdoor Recreation, Department of Natural Resources; Brett Huber, Staff, Senator Lydia Green; Sam S. Kito III, Special Assistant, Office of the Commissioner, Department of Transportation and Public Facilities; Kevin Ritchie, Alaska Municipal League, Alaska Conference of Mayors, Juneau; Lamar Cotten, Deputy Commissioner, Department of Community and Regional Affairs; Bob Bartholomew, Deputy Director, Income and Excise Audit Division, Department of Revenue; Eddie Grasser, Alaska Outdoor Council, Juneau; June Burkhart, (Testified via teleconference), Alaska Boating Association, Mat-Su; Tom Nicolos, (Testified via teleconference), City Council, City of Barrow, Barrow. SUMMARY SB 230 An Act providing that state land, water, and land and water may not be classified so as to preclude or restrict traditional means of access for traditional recreational uses. HCS CS SB 230 (FIN) was reported out of Committee with "no recommendation" and with a fiscal note by the Department of Natural Resources dated 3/28/98. 1 SB 181 An Act relating to directional and informational signs, displays, and devices and penalties for violations related to outdoor advertising. CS SSSB 181 (FIN) was reported out of Committee with "no recommendation" and with a fiscal note by the Department of Transportation and Public Facilities. SB 20 An Act establishing the Alaska municipal basic services program, relating to certain programs of state aid to municipalities and recipients in the unorganized borough; and providing for an effective date. SB 20 was HELD in Committee for further consideration. SENATE BILL 230 "An Act providing that state land, water, and land and water may not be classified so as to preclude or restrict traditional means of access for traditional recreational uses." KEN ERICKSON, STAFF, SENATOR DRUE PEARCE, spoke in support of SB 230. He noted that it had been introduced to protect Alaskan's right to access state land and water for recreational uses. In a time when the federal government continues to restrict and prohibit Alaskan's access to many areas of the State, the State government, needs to ensure that decisions made to restrict access are made in a responsible, fair and well represented process. Alaskans are presently losing their right to traditional recreational use on some state and park lands without appropriate notification and justification. He cited that citizens believe that the "public comment process" is not being administered and that all user groups are not being represented. Mr. Erickson suggested that non-restricted areas of our State are being closed without proper oversight by the Legislature. Mr. Erickson recommended that SB 230 would provide a change in the process, ensuring that all Alaskans have proper representation by their elected officials, with restrictions and prohibitions placed on traditional recreational activity needing to be justified to the Legislature. He added that some areas of Alaska may need to be restricted to partial recreational activity, suggesting that these important decisions be made at the legislative level. 2 Representative Mulder pointed out that the Chilkat State Park would be increased by eleven acres. Mr. Erickson agreed, pointing out that there are three parcels of land involved, previously purchased by the Department of Natural Resources (DNR) and then transferred to the Parks Management Division by using inter-agency land management agreements. The federal funds used to purchase those eleven acres had strings attached indicating that they would need to be managed as if they were part of the Chilkat State Park. In response to Representative Therriault's comment, Mr. Erickson stated that Section #1 would add a list of duties required by Department of Natural Resources (DNR). The Department must annually submit a report to the Legislature on each designation of incompatible use that would prohibit or restrict a traditional means of access. The report must state reasons for the restriction or prohibition, the specific area affected, and the duration of the restriction or prohibition. The section would further define "traditional means of access" and "traditional recreational activity". Representative Brown referenced language on Page 3, Line 12, "...where a popular pattern or use has developed;...". Mr. Erickson stated that this language would incorporate uses which have occurred traditionally. JUNE BURKHART, (TESTIFIED VIA TELECONFERENCE), ALASKA BOATING ASSOCIATION, MEMBER OF THE BOARD OF DIRECTORS, MAT- SU, spoke in support of SB 230. She proceeded to provide examples of problems resulting from concerns on lack of restrictions. Ms. Burkhart added that the public hearing process has not worked. JIM STRATTON, DIRECTOR, DIVISION OF PARKS AND OUTDOOR RECREATION, DEPARTMENT OF NATURAL RESOURCES (DNR), noted that the Department supports Sections 1, 2, and 3, although, voiced opposition to Sections 4 and 5. He stated that it was the mission of Alaska State Parks to provide for a range of recreational opportunities. Mr. Stratton commented on Denali State Park as referenced by Ms. Burkhart. When that legislation was passed in 1970, the Division of State Park's was not given direction from the Legislature on how to incorporate incompatible uses when planning for the park. The Department went forward with the generic park regulations and crafted a balance between motorized and non-motorized use. Mr. Stratton advised that the 1989 planning process for the Denali State Park took two years to write. He emphasized 3 that the public was provided with a "more than adequate" opportunity in creating a balance in park regulations. The Department does not feel that many recreational users would be displaced with the proposed closure. He emphasized that the decision had been made through the public process. Mr. Stratton stressed that hundreds of hours have been "put-in" to achieve the compromise. He advised that it would be "bad" business not to support the agreed result. Mr. Stratton referenced the language on Page 7, Line 20, (4), "...provide ample access for recreational mining", suggesting that language was problematic. The current definition of recreational mining would include a 6" suction dredge. The Department does not feel that kind of recreational mining is compatible with purposes of state parks. Although, he added, recreational gold panning is allowed in state parks. He requested that an amendment be made which would change that language. Representative Kelly interjected that 6" dredge should be allowed. Representative Martin MOVED a change to Page 7, Line 20, by deleting "mining" and inserting "gold panning". Mr. Erickson noted that Senator Pearce would not object to that change. Representative Kelly OBJECTED emphasizing that mining is a valid recreational activity. Representative Brown asked what was involved with using a six inch suction dredge and how much noise would it create. Mr. Stratton stated that a six inch dredge was a mechanized suction device which would suck gravel through a six inch pipe. Co-Chair Foster interjected that size dredge was more like a "toy". A permit would be needed if concerns were voiced regarding the water quality. Co-Chair Hanley inquired the current uses allowed for mining in state parks. Mr. Stratton replied that state parks are closed to mining although gold panning is allowed. He added that there is no definition of recreational mining in statute, although, there are regulations within other divisions at DNR. Committee members discussed the differences of "recreational" mining. Co-Chair Foster noted that he could support mining if done recreationally with a 2.5" dredge pipe, including rockers and small slues boxes not over 4' in length. He suggested that the noise would be minimal. Representative Kelly asked if there was a pipe increment between the 6" and the 2.5" hose. Co-Chair Foster stated that a 4" hose would still need a motor vehicle to drag it into the area. 4 Representative Brown proposed adding the language "non- mechanized" to the intent. Representative Kelly supported keeping language which would include the 2.5" mechanized dredge pipe. He maintained that the Alaskan heritage is based on mining, noting his frustration that mining is continually being cut off. Representative Navarre pointed out that mechanized mining would be an expansion to what is currently allowed. Co- Chair Hanley pointed out that the section being discussed would only apply to the Denali State Park. Representative Brown MOVED to AMEND the amendment to delete "gold panning" and insert "non-mechanized". Representative Kelly OBJECTED. Representative Martin WITHDREW Amendment #1. Representative Brown repeated the MOTION. Representative Kelly OBJECTED. A roll call was taken on the MOTION to insert "non- mechanized". IN FAVOR: Brown, Grussendorf, Martin, Navarre, Hanley, Foster. OPPOSED: Kelly, Kohring, Mulder, Therriault. Representative Parnell was not present for the vote. The MOTION PASSED (6-4). EDDIE GRASSER, ALASKA OUTDOOR COUNCIL, JUNEAU, urged the Committee's support of HB 230. The purpose of the Outdoor Council is to protect public access to public resources, suggesting that the proposed legislation would amply cover those concerns. (Tape Change, HFC 96-132, Side 2). Representative Martin MOVED to report HCS CS SB 230 (FIN) out of Committee with individual recommendations and with the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. HCS CS SB 230 (FIN) was reported out of Committee with a "do pass" recommendation and with a fiscal note by the Department of Natural Resources dated 3/28/96. SENATE BILL 181 "An Act relating to directional and informational signs, displays, and devices and penalties for violations related to outdoor advertising." 5 BRETT HUBER, STAFF, SENATOR LYDIA GREEN, testified in support of SB 181. He stated that the bill would provide for the Department of Transportation & Public Facilities (DOTPF) a Tourist Oriented Directional Sign (TODS) program in statute and allow the placement of TODS signs on private property outside of the right-of-way. Codifying the program would provide for a well planned and regulated system of directional signing that would preserve the scenic beauty of Alaska's roadways and benefit Alaska's visitors and the business' that serve them. He continued, the Department currently administers TODS as an experimental program. Although, the program is consistent with standards established by the Federal Highway Administration and the Manual of Uniform Traffic Control Devices, absence of statute authorizing the program has left the public out of the process of promulgating regulation. By placing TODS in statute, the Legislature will provide firm legal footing for the program to continue. Mr. Huber concluded, passage of SB 181 would provide long sought assistance to Alaska businesses that are dependent on trade with the traveling public. The bill would likewise enhance the state's ability to be user-friendly to it's tourists and promote a responsive visitor industry. SB 181 authorizes a means for providing needed directional information while preserving the unique beauty of Alaska's roadways. He urged the Committee's support. Representative Brown referenced Page 3, Section 4, asking who would make the determination in the unzoned areas whether they would be zoned commercial or industrial. Mr. Huber replied that a specific definition does not exist at this time. Zoning would become representative by the use pattern of that area. Representative Brown pointed out that the bill covers space "outside" the right-of-way. She asked if the signs outside the right-of-way had to be consistent with federal highway standards. He replied that they would, noting that the concern would not come under the guidelines for highway right-of-way control but would be included under the outdoor advertising control regulations. Representative Brown asked the need to include private property "monitoring" in the legislation. Mr. Huber explained that congestion could exist on the right-of-way or that a business site could border the highway. In response to Representative Brown's query, Mr. Huber indicated it was the intention of the Department to approve the specific location on private property as well as on state lands. 6 Signage limitations exist in the program. SAM KITO III, SPECIAL ASSISTANT, OFFICE OF THE COMMISSIONER, DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES (DOT&PF), stated he did not know how many signs each business could have. He understood that the legislation would provide for new regulations to be drafted to address varying situations -- inside and outside the right-of-way. Representative Brown asked what the Department intended to do to prevent a proliferation of signs. Mr. Huber responded that it was the sponsors intent to provide the necessary latitude to the Department to establish the regulations. Representative Brown inquired if the legislation would work in cooperation with local ordinances and zoning. Mr. Huber replied that it was the intent of the legislation that it not be more restrictive than provisions contained in AS 19. The municipalities would have the ability to enact ordinances which were more restrictive if need be. Representative Brown disagreed with Section #5 of the legislation which would lower the penalty from a misdemeanor to a violation. Mr. Huber suggested that a misdemeanor violation would not make the best use of jail time or legislative funding. Although, Mr. Kito advised that reducing the penalty would limit the Department's ability to enforce illegal signs placed in the right-of-way. He thought passage of the legislation would hamper the Departments ability to implement it. Representative Brown questioned if Section #5 would cover political signs. Mr. Kito understood that separate restrictions exists addressing political advertising. He added that political signage would be expressly prohibited in the right-of-way. Representative Brown proposed that the Legislature would have a conflict of interest in lowering the penalty. Representative Therriault referenced Page 3, Section 4, and the use of "shall" in relationship regarding the location of sign placement. Mr. Huber responded that the Department will establish criteria to be met in order that the application be approved. Representative Brown referenced the language on Lines 20-21, Page 3, questioning how the Department would adopt regulations which affect the "scenic" qualities of an area. Mr. Huber stated that language had been added in the Senate Finance Committee to address if whether the legislation would remove current use of road travel. The Department can use the quality of the scenery which exists in an area to 7 allow or disallow signage. Representative Mulder commented on an earlier discussion regarding penalty, misdemeanor versus a violation charge. He suggested that it was easier to file a violation than to take a person to court. He continued, voicing concern with the number of signs being applied for and posted. Mr. Kito pointed out that existing TODS policy restricts intersection posting to a maximum of four, with a size of 90" x 18". Representative Mulder asked the criteria used to distinguish between the applicants and the eligible positions. Mr. Kito stated that it would be first come, first served. Mr. Huber corrected, reading from the TODS policy guideline manual, ".....not more than three signs should be installed on any sign panel and not more than two sign panels could be installed at any intersection". Representative Kohring noted support for the legislation. He stated that it would be an enhancement to the tourism industry, although, suggested that the fiscal note was too high. Mr. Kito explained the components of the fiscal note which would allocate $10 thousand dollars to establish the regulations, the remainder would cover the departmental costs to adequately maintain the system. Discussion followed regarding the fiscal note. Representative Mulder referenced Page 3, Line 7. He thought that including "shall" would suggest that there could be an inherent conflict and lawsuit through exclusion of vendors who want to have a sign. He MOVED changing "shall" to "may". Mr. Huber stated that changing "shall" to "may" would be permissive language in determining if the Department instituted the program. Representative Mulder pointed out that the TODS program had already been initiated. Mr. Kito explained that a pilot program is in place. He stressed that regulations have not been established to formalized that program policy. With the changed language, Line 6 has already established a "tourist oriented directional sign program". (Tape Change, HFC 96-133, Side 1). Representative Therriault suggested changing the language would make the entire program discretionary. Mr. Huber added, changing "shall" to "may" would include the direction outside of the right-of-way. It is the sponsor's intent that the area outside of the right-of-way be included. Representative Mulder MOVED to WITHDRAW the MOTION to change the language. There being NO OBJECTION, it was withdrawn. Representative Martin MOVED to report CS SS SB 181 (FIN) out 8 of Committee with individual recommendations and with the accompanying fiscal note. There being NO OBJECTION, it was so ordered. CS SS SB 181 (FIN) was reported out of Committee with "no recommendations" and with a fiscal note by the Department of Transportation and Public Facilities. SENATE BILL 20 "An Act establishing the Alaska municipal basic services program, relating to certain programs of state aid to municipalities and recipients in the unorganized borough; and providing for an effective date." DEB DAVIDSON, STAFF, SENATOR JOHN TORGERSON, testified in support of the proposed legislation. She stated that SB 20 would change the name of the Revenue Sharing program to "Priority Revenue Sharing for Municipal Services", and would change the Municipal Assistant Fund to the Safe Communities Fund. The change would require that payments from the Safe Communities Fund be used for specific prioritized purposes. The intent of the changes would more accurately reflect the purposes for which payments received are used. The programs appear to be a type of "slush fund" for communities and the change in name and requirements would help dispel that notion. Ms. Davidson concluded, the date of payment has been changed so that communities receive entitlement from both Priority Revenue Sharing and the Safe Communities Fund on July 31st of each year. Previously, payments from revenue sharing were made on July 31st and municipal assistance payments were made on February 1st. Representative Martin spoke against the fiscal note. Ms. Davidson discussed the fiscal note and the amount that the general fund would lose from moving the date. Part of the reason for the earlier payment would combine the two programs. By raising the minimum entitlement for each community from $25 thousand dollars to $40 thousand dollars would remove some funding from the larger communities. Those communities were willing to make that shift recognizing that the smaller communities require those funds to remain solvent. Ms. Davidson added that the sponsor felt that the lose of interest was worth the agreement from the large municipalities to contribute to the small communities. Those payments would be made on July 31st, at the beginning of the State fiscal year. Currently, revenue sharing is also paid on July 31st. Municipal assistance is currently 9 paid in February and the appropriation for that payment is made the prior year. It would be up to the municipalities to invest that money to earn the interest. The State would not be giving them the extra money in interest. Representative Kelly asked the intent of Section 10. Ms. Davidson replied that Section 10 would address the base amount account. When the municipal assistance program began, it was enacted so that the State would have the gross receipts business tax. Municipalities received a portion of money back from that tax. That tax was then repealed in 1978. The program was written so that those municipalities who had received money in 1978, would receive the same amount every year as established their first year. Under the current program, that is the amount paid. The remainder of the fund appropriation was then paid to all the municipalities on a per capita basis. The result was that as appropriations to the fund decreased through the years, individual municipalities would then deal with varying percentage reductions. She added, the total dollar amount would be reduced although the distribution of that would be proportional among the communities. In response to Representative Therriault's question, Ms. Davidson explained that smaller communities are currently having difficulty in maintaining their operating budget and the services that they are required to provide. That being the reason to increase the minimum entitlement for smaller communities from $25 thousand dollars to $40 thousand dollars. Representative Therriault questioned the State's benefit. Ms. Davidson clarified that the municipalities rely on the State to the extend that they receive funds through the Municipal Assistance Program. Should they dissolve, the responsibility of those services would return to the State. Representative Martin questioned if "safe" communities had been defined. SENATOR JOHN TORGERSON noted that there was no specific definition for that. He added that any group could qualify under "safe" community if they receive revenue sharing. Representative Martin reiterated his concern with the increased costs to the State. Senator Torgerson responded that he did not agree with the fiscal note as submitted by the Department. He pointed out moving the payment date back to July should create a surplus to the State rather than an expenditure. Representative Grussendorf responded to Representative Martin's concern regarding a safe community. He explained that criteria for a safe community would include the ability to respond to the need for hospital beds, police and fire protection. He emphasized that would be the same criteria 10 used by the Municipal Assistance Program. TOM NICOLOS, (TESTIFIED VIA TELECONFERENCE), CITY COUNCIL, CITY OF BARROW, BARROW, spoke in support of the proposed legislation. He urged the Committee's passage of the bill. KEVIN RITCHIE, ALASKA MUNICIPAL LEAGUE, ALASKA CONFERENCE OF MAYORS, JUNEAU, noted that the proposed legislation is the highest priority of the Alaska Municipal League (AML) and the Alaska Conference of Mayors. All communities have reached consensus on the bill after two years work. Mr. Ritchie commented that the current plan would not increase the appropriation, although, it would be allocated differently. The program is looking at a $4.5 million dollar reduction in funding. He suggested that the legislation would require more accountability from each community especially for basic services. In response to Representative Therriault's comments, Mr. Ritchie stated that the majority of communities do provide public safety, stressing that public safety is the top priority of most communities. Programs have been significantly cut over the years, restricting services to a minimum in many communities. Mr. Ritchie stated that there are 160 communities in the State. (Tape Change, HFC 96-133, Side 2). Mr. Ritchie listed public safety services offered by the communities. * Police * Fire * Water/sewer * Emergency Medical Services (EMS) He added, the concept addresses public safety as well as health issues. Mr. Ritchie stressed that the bill would work with the established budget caps. The roads program will strengthen the relationship with the State and would be used as part of the long-range fiscal planning. LAMAR COTTEN, DEPUTY COMMISSIONER, DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS (DCRA), stated that the Department does support the concept of SB 20 which would eliminate the "hold harmless" clause, placing the poorer communities at a disadvantage. Mr. Cotton suggested that the $40 thousand dollar allocation would amount to a combination of municipal assistance and 11 revenue sharing. Those communities are the smallest and have the least ability to raise revenue in their areas. He stressed that it was the Administration's position that a corporation exist at the local level to provide these essential services. Small communities get nothing for free, paying either through taxes or user fees. Mr. Cotten advised, that the Administration questions the date, recommending that checks be issued in October or November. BOB BARTHOLOMEW, DEPUTY DIRECTOR, INCOME AND EXCISE AUDIT DIVISION, DEPARTMENT OF REVENUE, pointed out that the Administration does support the bill, although, would like to see the fiscal note reduced, resulting in a loss of interest income in the amount of $130 thousand per month. Secondly, he added, the impact would be substantial in as much as July and August are the largest financial out-lays to the State. The Administration would request that the delivery date be changed to October or November, which would move the date forward two to three months. That change would keep the State from experiencing a cash flow problem. SB 20 was HELD in Committee for further discussion. ADJOURNMENT The meeting adjourned at 4:05 P.M. 12