HOUSE FINANCE COMMITTEE March 9, 1999 1:45 P.M. TAPE HFC 99 - 42, Side 1. TAPE HFC 99 - 42, Side 2. TAPE HFC 99 - 43, Side 1. TAPE HFC 99 - 43, Side 2. CALL TO ORDER Co-Chair Therriault called the House Finance Committee meeting to order at 1:45 P.M. PRESENT Co-Chair Therriault Representative Foster Co-Chair Mulder Representative Grussendorf Vice Chair Bunde Representative Kohring Representative Austerman Representative Moses Representative J. Davies Representative Williams Representative G. Davis ALSO PRESENT Representative Carl Morgan; Representative Norman Rokeberg; Kay Murphy, Mortgage Operations Director, Alaska Housing Finance Corporation, Department of Revenue; John Bitney, Legislative Liaison, Alaska Housing Finance Corporation, Department of Revenue; Wendy Redman, Vice President, University of Alaska, Fairbanks; Dan Spencer, Chief Financial Analyst, Office of Management and Budget; Ginger Blaisdell, Fiscal Analyst, Legislative Finance Division; Tracy Cramer, Director of Administration for Exxon Valdez Oil Spill (EVOS) Trustee Council, Department of Fish and Game. SUMMARY HB 13 An Act relating to the characterization of, use of, segregation of, deposit of, interest on, and disbursement of escrow money; relating to the recording, filing, and delivery of escrow documents; relating to civil penalties for violations of certain escrow provisions by escrow settlement agents; relating to the supervision by the Department of Commerce and Economic Development of escrow settlement agents; authorizing the adoption of regulations to implement certain escrow provisions; and providing for an effective date. CS HB 13 (FIN) was reported out of Committee with a "do pass" recommendation and with a zero fiscal note by the House Finance Committee. HB 93 An Act relating to the Alaska Housing Finance Corporation's rural assistance loan program and to the definition of 'housing' for purposes of the corporation's housing assistance loan program; and providing for an effective date. HB 93 was reported out of Committee with "do pass" recommendation and with a zero fiscal note by the Department of Revenue. HB 100 An Act making and amending capital, supplemental, and other appropriations, and appropriations to capitalize funds; ratifying certain expenditures; and providing for an effective date. CS HB 100 (FIN) was reported out of Committee with "no recommendation". HJR 13 Relating to using oil spill settlement funds to create an endowment for the sciences at the University of Alaska. CS HJR 13 (FIN) was reported out of Committee with a "do pass" recommendation and with a zero fiscal note by the House Hess Committee dated 3/8/99. HOUSE BILL NO. 93 "An Act relating to the Alaska Housing Finance Corporation's rural assistance loan program and to the definition of 'housing' for purposes of the corporation's housing assistance loan program; and providing for an effective date." REPRESENTATIVE CARL MORGAN explained that the proposed legislation would modify AHFC's Rural Mortgage program to allow two changes: ? The Rural Mortgage program would allow for refinancing of home loans in the same manner any conventional mortgage allows. While many people around the nation have taken advantage of low interest rates to refinance their home mortgages, state law simply does not provide the option under the rural lending program. ? The current definition in state law limits the term "housing" to either single family or owner occupied duplexes. The proposed legislation would bring the term into compliance with current industry standards for lending by allowing owner- occupied housing up to four units. The Rural Mortgage program would be allowed to finance up to a four-plex. Representative Morgan asked members to note that the bill would not allow the program to make loans that are not allowed under conventional lending practices or industry standards. The bill attempts to allow the loan program to make the same kind of loans allowed for any conventional urban loan program. The Rural Mortgage loan program is a revolving fund. Alaska Housing Finance Corporation (AHFC) has reported that default rates in the program are the same or less than the rate of defaults on conventional urban loans. The legislation would attempt to make changes that would allow a lending program to make the same kind of loans considered standard practice under conventional lending. Representative Morgan stressed that this is an issue of "fairness" for rural borrowers and would be good business for AHFC. JOHN BITNEY, LEGISLATIVE LIASON, ALASKA HOUSING FINANCE CORPORATION, DEPARTMENT OF REVENUE, ANCHORAGE, stated that Alaska Housing Finance Corporation (AHFC) supports the proposed legislation which will assist rural borrowers to take advantage of the better interest rates currently available. The original statutes were not written to include the concept of "refinancing" or to address that the rates would decline to what they currently are. Co-Chair Therriault restated that current statute does not allow for refinancing; the language would be inclusive of up to a four-plex. He asked if this would be a subsidized loan program. KAY MURPHY, MORTGAGE OPERATIONS DIRECTOR, ALASKA HOUSING FINANCE CORPORATION, DEPARTMENT OF REVENUE, explained that the program was funded from a revolving loan fund by corporate receipts of AHFC. The interest rate is set by statute at 1% less than the Corporation's taxable loan program. Co-Chair Therriault questioned if additional staffing would be needed to implement the program. Ms. Murphy responded that AHFC was not anticipating any additional staffing. She added, because rural borrowers can not refinance their loans, AHFC has refinanced them under other programs within the Corporation. A volume of loans has already been addressed. Representative Grussendorf asked if an owner would be required to live on the property. Ms. Murphy replied that it would need to be owner occupied housing and having four or fewer units. Mr. Bitney pointed out that there is a non- owner occupied program, which would not be addressed, in the proposed legislation. Representative Foster commented that he had proposed an identical bill six years ago. He voiced strong support for the legislation. Representative Bunde suggested that a subsidy needs to be fair and that to date, rural communities have not had the same opportunity to take advantage of loan programs available to the urban communities. Representative Kohring questioned the level of risk with loans offered to rural Alaska. He suggested that risk factor be reflected in the default rate. Ms. Murphy replied that the delinquency rate in the rural loan program was slightly less than the overall portfolio, which is a little over 3%, with a good payment history. Representative Kohring inquired if it would be a streamlined refinance. Ms. Murphy explained that there is a streamline refinance program, which is a continual program without a cut off date. With the passage of HB 93, AHFC would be able to offer streamline refinancing to rural loan borrowers within the rural loan program. Representative Kohring questioned how many loans would be eligible for the program. Ms. Murphy replied that in the rural loan program, there are over 500 loans which are over 8% at this time. Representative Kohring asked what definition of "rural" was used. Ms. Murphy replied that if a community was not connected on a road system, it would consist of a population of 6500 or less; if it was connected on a road system, it would have a population of 1600 or less. Representative G. Davis questioned the definition of "community". Ms. Murphy replied that for the higher populated areas around Anchorage and Fairbanks, a community would be within 50 miles of the Anchorage City center, which would be considered urban, and within 25 miles of Fairbanks City center would also be considered urban. She noted this was an attempt by AHFC to define community. Representative Kohring MOVED to report HB 93 out of Committee with individual recommendations and with the accompanying zero fiscal note. There being NO OBJECTION, it was so ordered. HB 93 was reported out of Committee with a "do pass" recommendation and with a zero fiscal note by the Department of Revenue dated 2/24/99. HOUSE BILL NO. 13 "An Act relating to the characterization of, use of, segregation of, deposit of, interest on, and disbursement of escrow money; relating to the recording, filing, and delivery of escrow documents; relating to civil penalties for violations of certain escrow provisions by escrow settlement agents; relating to the supervision by the Department of Commerce and Economic Development of escrow settlement agents; authorizing the adoption of regulations to implement certain escrow provisions; and providing for an effective date." REPRESENTATIVE NORMAN ROKEBERG explained that HB 13 was submitted at the request of the Alaska State Escrow Association and was reintroduced in an effort to assure consumers that their money would be safely received in a timely manner, and properly accounted for when delivered to a settlement agent for a residential real property transaction. Currently, there are no Alaskan laws addressing that concern. He continued, an increasing number of incidents have occurred demonstrating the need for Alaska to join the large number of states having "good funds" legislation. In the age of growing electronic commerce, people are shopping the Internet for mortgages and there is an increase in competition from "outside" mortgage companies caused by low interest rates. Problems have arisen from failure of these companies to properly fund transactions in a timely fashion or in some cases left with bankruptcy. Representative Rokeberg summarized that when drafting the bill, he worked with various interest groups and financial institutions throughout Alaska. Representative Rokeberg advised that the bill had been rewritten, resulting from an attached fiscal note in a previous Committee hearing. The new version would eliminate the regulatory necessity of the Department of Commerce and Economic Development to oversee that particular chapter of law. Representative Foster MOVED to adopt work draft 1-LS026\M, Bannister, 2/19/99, as the version before the Committee. There being NO OBJECTION, it was adopted. Representative Rokeberg explained the changes to the work draft: ? Amendment #1, addressed on Page 2, Line 5, language after "transaction agreement" was deleted. ? Amendment #2 was not addressed in the proposed bill since that particular section "Civil Penalty" was replaced by "Civil Action" on Page 3, Lines 22-27. That section removes all departments from the legislation and makes the violation of the "good funds act" a private right of action. ? Amendment #3 was withdrawn. ? Amendment #4 was addressed on Page 6, Lines 28-29; however, the definition has also had the following language added after "dwelling units", as "any number of apartments are in a horizontal property regime formed under AS 34.07 or any number of unites if the unites are in a common interest community created under AS 34.08". ? Amendment #5 deals with the "Civil Penalty" section that has been changed to the "Civil Action" section. ? Amendment #6 was pending, however, all references to the Department of Commerce and Economic Development, its supervisory authority, investigative authority, and regulation making authority are deleted from Version M. Also, deleted is reference to the referral to the attorney general's office if voluntary compliance was not obtained. ? Amendment #7 deals with the "Civil Penalty" section that is no longer in the legislation. ? Amendment #8 is not needed as the removal through the Department of Commerce and Economic Development since there are no provisions for an audit. Representative Bunde asked why the bill addresses only residential property and not commercial property. Representative Rokeberg explained that because of the large amounts of money involved in commercial transactions and the different funding mechanisms, those projects were excluded. The primary focus of the legislation is consumer protection issues related to residential properties. Representative J. Davies requested further information regarding exclusion of "punitive damages". Representative Rokeberg replied that the intent was to provide a cure for grievance by allowing a private right of action. If there is a breech, then private right presides. Representative J. Davies advised that the reality is that these situations sometimes do get litigated and that there are circumstances in which punitive damages make sense. Representative Rokeberg replied that happens only in instances where the money has been reserved in trust. The concern here is that the money is available at the time of recording. Representative Rokeberg pointed out that each time there is a property closing, there are two contracts involved; ? The contract with the buyer and seller of the property; and ? The contract between the buyer and the lender. Co-Chair Therriault clarified that an escrow agent must have the funds in hand and under control before the transaction of the title can take place. Representative Rokeberg explained that previously, they were recording before the money was in hand and it was not determined who was in charge of carrying the "float". Representative J. Davies noted that when an agent violates the proposed law, the resulting remedy is civil court. Representative Rokeberg replied that in some cases, the Title Company could be sued for not following the law. At this time, there is no law, so there is no cause of action before them. Co-Chair Therriault clarified that the proposed legislation would make it easier to bring forward a civil action. Representative J. Davies advised that either the Department of Law would be paid to do the work or it would rest upon the Alaska Court System. Representative Rokeberg responded that is what the Courts are to be used for. He suggested that this action would begin a mini privatization. Representative J. Davies referenced Page 2, Line 6, asking what "segregation" of the money meant. Representative Rokeberg explained the intent is that the funds are not commingled. Representative J. Davies understood that it meant having different bank accounts. He emphasized that the two statements specify keeping separate bank accounts. Representative Rokeberg stated that Subsection (a) provides for the segregation and Subsection (b) provides for the account. Co-Chair Therriault acknowledged the confusion caused by the wording. Representative G. Davis suggested that there must be a system within the banks, which segregates or separates the accounts. Co-Chair Therriault noted that the discussion before the Committee was if there was one account or a separate escrow account for each transaction. He suggested that a legal drafter be consulted to clarify the language. Representative Grussendorf additionally, voiced concern with the language and recommended that someone from the Division of Banking testify regarding these procedures. Representative Rokeberg clarified if Committee members were concerned if segregated meant separate accounts. Co-Chair Therriault stated that the Committee needed clarification if segregation would be a bookkeeping function rather than separate account. (Tape Change HFC 99 - 42, Side 2). Co-Chair Therriault reiterated that the issue needs to be clarified. He requested that legal counsel comment on the concern. Co-Chair Therriault questioned if the House Finance Committee would need to prepare a zero fiscal note to accompany the legislation. HB 13 was HELD in Committee for further consideration. HOUSE JOINT RESOLUTION NO. 13 Relating to using oil spill settlement funds to create an endowment for the sciences at the University of Alaska. CO-CHAIR GENE THERRIAULT stated that HJR 13 would support recent action of the Exxon Valdez Oil Spill (EVOS) Trustees to create a long-term research and monitoring endowment using $115 million dollars of the expected reserve. The EVOS Trustee Council allocates money obtained from settlement of the Exxon Valdez spill litigation. Over the years, EVOS funds have largely been used to purchase land for habitat preservation. The Council has been lacking in the area of research, leaving a gap in understanding future spills and how to respond to them. It would be beneficial to know if types of marine ecosystems are extra sensitive to certain cleanup activities, and if so, how to respond to spills in those areas. Co-Chair Therriault concluded that an endowment of this nature would fulfill the intent of the Exxon Valdez Spill settlement and the mission of the Trustee Council, which is to restore, rehabilitate, replace, enhance, and acquire equivalent resources and services in the oil spill regions. Representative Austerman questioned how many endowed chairs there would be. Co-Chair Therriault explained that number has not yet been determined. It would depend on what the Trustees ascertained appropriate. The chairs would be involved in the areas of research instruction and public service on spill impacted areas. Representative Austerman voiced concern that $2-$3 million dollars would be used to cover chair costs and, that additionally, the University would be supplemented with research money. He requested that the University submit a program intent list for use of these funds. Co-Chair Therriault advised that the proposed bill asks that the EVOS Council consider this proposal and pointed out that this entity operates completely independent of the Legislature. Representative J. Davies commented that the endowment would be established by the Trustee Council. They are required to see that funding is spent appropriately. He added, when an endowed chair is established, the endowment will generate usually five times other research in that area, thus, income would be leveraged by that factor. Representative J. Davies instructed that a researcher can not operate in a vacuum; they are dependent on accessing utilities and facilities that a university system can offer. Support functions for research are audited by the Department of Defense. Co-Chair Therriault envisioned that the Trustees could endow a chair at the University. That chair would most likely be an expert in marine sciences, and could provide them with advice. Representative Austerman suggested that there could be other research organizations that would like to be a part of the process. He urged that this be a competitive bid for the EVOS Council to consider. Co-Chair Therriault explained that the actual research was separate from the endowment of the chair. If the EVOS Council was going to endow chairs to help oversee proposals, they would most likely choose a university. He ascertained that the Alaska State Legislature would want them to consider the Alaska University system. The proposed legislation only states that Alaska should use a portion of the funds for endowed chairs. Representative Bunde shared concerns voiced by Representative Austerman regarding administrative overhead costs. In response to Representative Bunde, Co-Chair Therriault stated that the grants are not a moneymaker for the University; although, they would help to spread the fixed costs of the University system over a larger pool. Representative Bunde responded that it would add to the University's cash flow. Representative Austerman suggested language written on Page 4, Line 5 be replaced with "relevant areas or research". WENDY REDMAN, VICE PRESIDENT, UNIVERSITY OF ALASKA-STATEWIDE SYSTEM, FAIRBANKS, disagreed with Representative Austerman that the endowment chairs do not pay attention to what is requested. The EVOS Trustee Council is a very political body. The intent of the resolution will have an impact on that body. What the University envisions would be particularly in the areas of research and public service. In the public service area, there exists faculty in the cooperative extension service and through the marine advisory program. She noted that those are the primary arms which have dealt with impact and the effects of spill in that region. Ms. Redman continued, the two key areas of focus for the Trustees have been: ? The need for continual and long term research; and ? Providing a way to get all the research previously undertaken out to the public. The research does not do any good unless it is used. That research needs to be translated into documents. Ms. Redman addressed the issue of endowed shares. She stated that the University would treat these type of endowed shares like any other donations made to the University. Essentially, it passes to the University of Alaska foundation, and then like a donation, it would be decided how to spend those funds, then establishing a work plan for that chair. Representative J. Davies pointed out that one of the key elements for a long-term research plan is graduate students. Major amounts of research are not undertaken without some graduate students working on the program. Representative G. Davis referenced Page 2, Line 23, and asked why those locations were classified. Ms. Redman replied those units were either affected or have programs with faculty that work there. Representative Austerman asked about the price tag of $2-$3 million dollars per chair. Ms. Redman stated that it would be closer to $2 million dollars if there are no graduate students involved. Representative Austerman asked what the $2 million dollars per chair would buy. Co-Chair Therriault pointed out that it was a small endowment, which spins off a particular cost of a function. Ms. Redman added that the actual administrative costs anticipated per year would be $100 thousand dollars to cover salary benefits, clerical support, travel, commodities and contractual costs. TRACY CRAMER, DIRECTOR OF ADMINISTRATION FOR EVOS, DEPARTMENT OF FISH AND GAME, stated that the EVOS Trustee Council would like to see the resolution passed because of investments results. At this point in time, all of the joint trust funds are in the treasury and are invested in treasury securities with an average of 100 days security. Currently, the treasury is earning 4.5% to 5% on a large amount of money. Ms. Cramer spoke to the issue of the endowed shares. She stated that the Trustee Council would consider the endowed shares, however, the federal trustees are concerned that given their trust responsibility, they may not be able to hand over a sum of funds, even with an agreement to the University of Alaska. Representative Austerman asked if the resolve to the endowed chairs was not included in the legislation, would the EVOS Council still support the bill. Ms. Cramer replied that the Trustee Council does not have an objection to the first resolve. They would appreciate any assistance that the Legislature could provide toward their limited authorization toward investments, addressed by the second resolve. Co-Chair Therriault examined the way the 1st resolve was worded and if it would be taken as a "directive". Ms. Cramer replied that it appeared fine to her. Representative J. Davies asked information regarding a recent action creating a long-term endowment. Ms. Cramer responded that in 1984, the trustee council concluded an environmental impact statement that analyzed the resources and services injured. Part of that statement included the establishment of the restoration reserve. The Trustee Council has allocated $12 million dollars each year into that reserve. The basic assumption is that after the last payment on September 1, 2000, research will continue to be made by the State. Ms. Cramer continued, over the last eighteen months, the Trustee Council has been going through a public review process regarding how that money should be spent. It amounts to roughly $170 million dollars. Based on public comments, the Trustee Council took action on March 1, 1999, and allocated $150 million dollars for research activities. It was assumed that this money would continue to be a perpetual endowment, inflation proofed and that any expenditures would come after inflation proofing. Representative J. Davies MOVED an amendment to Page 4, Line 4, deleting "use" and inserting "consider using". Representative Bunde OBJECTED. He stated that a clear message should be sent to EVOS. Co-Chair Therriault noted that he would not object to the language change. Representative Bunde WITHDREW his OBJECTION. Representative Grussendorf MOVED to report CS HJR 13 (FIN) out of Committee with individual recommendations and with the accompanying fiscal note. Representative Austerman OBJECTED for the purpose of discussion. He noted that he was uncomfortable with the School of Fisheries research history. Representative Austerman WITHDREW his OBJECTION. Representative Kohring OBJECTED for the purpose of comment. He agreed with Representative Austerman, and asked that other research options should be explored within the private sector. He added that the legislation was moving away from the mission of what was intended with the Prince William Sound and endowing of chairs. He commented that the area has been studied for the past ten years and asked why additional research was needed. Representative Kohring WITHDREW his OBJECTION. Representative Bunde OBJECTED for the purpose of a statement. He commented that it was important that the instructional component not be ignored within the resolution. Representative Bunde WITHDREW his OBJECTION. There being NO final OBJECTION, it was so ordered. CS HJR 13 (FIN) was reported out of Committee with a "do pass" recommendation and with a zero House Hess fiscal note dated 3/8/99. HOUSE BILL NO. 13 "An Act relating to the characterization of, use of, segregation of, deposit of, interest on, and disbursement of escrow money; relating to the recording, filing, and delivery of escrow documents; relating to civil penalties for violations of certain escrow provisions by escrow settlement agents; relating to the supervision by the Department of Commerce and Economic Development of escrow settlement agents; authorizing the adoption of regulations to implement certain escrow provisions; and providing for an effective date." Representative J. Davies MOVED to adopt Amendment #1. [Copy on File]. Representative Rokeberg noted that he would accept the amendment in the spirit of clarification. There being NO OBJECTION, Amendment #1 was adopted. Representative Foster MOVED to report CS HB 13 (FIN) with individual recommendations and with the fiscal note. Co- Chair Therriault advised that the fiscal note would be the front page only of the previous fiscal note. There being NO OBJECTION, it was so ordered. CS HB 13 (FIN) was reported out of Committee with "do pass" recommendation and with a new House Finance Committee zero fiscal note. HOUSE BILL NO. 100 "An Act making and amending capital, supplemental, and other appropriations, and appropriations to capitalize funds; ratifying certain expenditures; and providing for an effective date." Co-Chair Mulder MOVED to adopt Amendment #16 which would restore the funding for remodeling newly acquired space in the same building now occupied by the Public Defender, thereby, saving additional costs of establishing a full support system for offices separate from the current space. [Copy on File]. There being NO OBJECTION, Amendment #16 was adopted. Representative Williams MOVED to adopt Amendment #17 which would add $70 thousand general fund program receipt dollars to the Department of Transportation and Public Facilities, Division of Design and Engineering Services for utility permit issuance. [Copy on File]. Co-Chair Therriault asked where the program receipts would be generated from. DAN SPENCER, CHIEF BUDGET ANALYST, OFFICE OF MANAGEMENT AND BUDGET, stated that they would come from utilities. He noted that the Department of Transportation and Public Facilities does support the amendment. There being NO OBJECTION, Amendment #17 was adopted. Representative Bunde WITHDREW Amendment #18. [Copy on File]. Representative Bunde MOVED to adopt Amendment #19, which would reappropriate $430,300 in federal indirect receipts which would be used as State funds for the Child Support Enforcement Division (CSED) shortfall. [Copy on File]. GINGER BLAISDELL, FISCAL ANALYST, LEGISLATIVE FINANCE DIVISION, pointed out that there is a new Amendment #19 which would replace the original Amendment #19. [Copy on File]. The original Amendment #19 does not show the federal receipt portion. The new Amendment #19 includes federal receipt dollars. The total supplemental request for CSED would be $852,189 dollars. Representative Bunde WITHDREW the MOTION to MOVE the original Amendment #19. There being NO OBJECTION, it was withdrawn. Representative Bunde MOVED to adopt the NEW Amendment #19. There being NO OBJECTION, it was adopted. Mr. Spencer asked to speak on the record regarding timing of program receipts. He stressed that the Department of Revenue will not know for certain the full amount of program receipts until after June 30, 1999. He reiterated that the number before the Committee was a projection. If the funds do not come in at this level, an over expenditure will be shown for CSED. Co-Chair Therriault questioned the charge-back recalculation for the Department of Administration. Mr. Spencer explained that the Department establishes the rates approximately 16 months in advance. They implemented a new version of the CICS, mainframe computer system software. A rate adjustment has been made based on which costs actually need recovering. Representative Grussendorf MOVED to RESCIND action taken on Amendment #5. Representative Bunde OBJECTED. Representative Grussendorf voiced concern with the Committee not funding power cost equalization (PCE) in the rural areas. Representative Bunde replied that he supported research on whether power cost equalization should be continued and if it was continued, how it would be financed. Representative J. Davies stated that for several years, the Legislature has funded PCE at the 85% level and that there has been a reasonable expectation in rural Alaska that it would continue to be funded at that level. He added that the Blue Ribbon Commission has indicated that there is enough money in that program to cover the request at that level. He stated that to force a change before there has been discussion would be premature. Representative Austerman voiced concern that the Department had not prorated PCE costs, which might suggest that it would be the responsibility of the Department. Representative J. Davies pointed out that the Department was addressing it in the same manner they have in the past two years. Representative Moses pointed out that there has been a lot of money spent on hydroelectric power and various types of power in urban areas. Many taxpayer dollars have been spent on getting inexpensive power to those areas. He exclaimed that there must be a program established to get inexpensive power to the rural area, whether it be thermal, hydro or wind turban. Representative Moses emphasized that until inexpensive power is achieved in the rural areas, it is paramount that the State continues to fund PCE. Representative Kohring noted that by continuing to fund PCE, the State would not be accomplishing any sustainable plan of development. Representative J. Davies agreed that there does need to be a plan, however, what is being requested at this time is supplemental money to help the rural area get through until the end of the fiscal year. He emphasized that money exists in the power cost equalization fund to cover the expense and that it should be used for that purpose. A roll call vote was taken on the motion. IN FAVOR: J. Davies, Foster, Grussendorf, Moses, Williams OPPOSED: Bunde, G. Davis, Kohring, Austerman, Therriault, Mulder The MOTION FAILED (5-6). Representative Moses MOVED to RESCIND action taken on Amendment #8. Co-Chair Therriault OBJECTED. Representative Moses affirmed that this area has received a triple hardship, including an economic and natural disaster. These areas are hurting and their local government revenues are down. That money is needed now! In the more removed areas, supplies often take up to 6 weeks in shipment. Representative Moses pointed out that this disaster would eventually affect the entire State. Co-Chair Mulder suggested that the request would be better placed in the capital match grant program. He believed that, as a supplemental for emergency disaster would be stretching the concept of supplemental funding. Co-Chair Mulder stated that the money would not provide direct relief for these people as much as it would be providing community improvement projects. Representative G. Davis advised that capital projects would require dollars to sustain the maintenance and upkeep. He pointed out that such projects would require additional local dollars in the future. Representative Grussendorf compared this disaster to the Millers Reach fire disaster, pointing out how the State came forward to address that concern. He commented that now there is an opportunity for the State to address the disaster in the fishing areas, however, the Legislature is not coming forward to take care of village economy. Representative Kohring suggested that much of the monies in the Millers Reach fire came through private funding such as the Red Cross and United Way. Representative J. Davies stated that the nature of this request would not necessarily be a "capital project". The funding would be used to provide wages and help to those families so that they could make it through this time when fish are not available. The primary purpose of this funding would act as an alternate source of income to help these people "survive". Representative Grussendorf added that with passage of the supplemental, these people would then have the supplies necessary for the upcoming fishing season. Co-Chair Mulder suggested that if funding was provided now, the request would probably come back again in May in the capital matching grants. Co-Chair Mulder voiced concern regarding how the State should deal with economic disasters. He foresaw that the commercial fishing industry is in for some difficult years. He believes that there will be expectation the State, and that by funding the supplemental would not be a prudent way to address the magnitude of the concern. Representative Williams suggested that it could be better for the fishing villages to receive funding at the end of the summer season. Representative Moses stressed that this funding was needed months ago. These areas sometimes go 1.5 months without a barge. He reiterated that the concern needs to be addressed and coordinated soon. A roll call vote was taken on the motion. IN FAVOR: J. Davies, Foster, Grussendorf, Moses OPPOSED: G. Davis, Kohring, Williams, Austerman, Mulder, Therriault Representative Bunde was not present for the vote. The MOTION FAILED (4-6). (Tape Change HFC 99 - 43, Side 2). Co-Chair Therriault MOVED to report CS HB 100 (FIN) out of Committee with individual recommendations. There being NO OBJECTION, it was so ordered. CS HB 100 (FIN) was reported out of Committee with "no recommendations". ADJOURNMENT The meeting adjourned at 4:15 P.M. H.F.C. 17 3/09/99