Legislature(1999 - 2000)
03/28/2000 02:04 PM Senate L&C
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 240-CHARGE FOR COMMUNITY DEVELOPMENT QUOTA
MR. JEFF BUSH, Deputy Commissioner of the Department of Community
& Economic Development, stated SB 240 creates a fee structure for
the Community Development Quota (CDQ) groups to make them self-
sufficient and displaces $250,000 of general funds with an
equivalent amount from Native groups. CDQ is a federal program
delegated to the Governor of Alaska, from there it is delegated to
the Department of Community & Economic Development (DCED) and
Department of Fish & Game (DFG). This has created over 1,000 jobs
annually and $20-30 million in royalty income to the groups.
DCED agreed that a program this profitable should become self-
sufficient. DCED approached the groups about creating a self-
sufficient plan. In some situations, State approval is required of
investment decisions that the groups are making. They need to have
DCED staffed and capable of responding to those requests for
approval. The federal program requires the State to approve these
investment decisions.
Half of the fee is set at an equal rate for each CDQ group, and the
other half is based upon the amount of the allocation the groups
received. The actual allocation amount does not always reflect the
same amount as the administrative cost associated with the program.
If a group receives a larger allocated amount, that group is more
likely to have more investment options and decisions that will
require State oversight. Each group will require some
administrative overhead, the larger groups may require more than
the smaller groups.
The federal government authorized a fee program of its own, part of
the fee program is allocated to the State. It will be an
additional two years before the fee structure is in place. If any
fees are collected and received by the State, those become an
offset directly against the fees charged under this program.
The administration supports the proposed amendment relating to a
neutral position of the State with the FCC creating new CDQ groups.
Mr. Bush suggested adding to the amendment on page 3, line 6, the
word "new" before "CDQ groups", and on page 3, line 8, insert
"newly formed" before "CDQ group." Those changes have been adopted
in the House, and Mr. Bush suggested the Senate make the same
changes.
SENATOR LEMAN moved amendment number one, making the changes Mr.
Bush suggested. Without objection, the amendment was adopted.
SENATOR HOFFMAN moved amendment number two (a conceptual
amendment). Senator Leman objected.
SENATOR HOFFMAN stated Mr. Robin Samuelson suggested a change in
language so the State would not get into discussions, leaving the
issues to the federal government of whether to support the
expansion of the CDQ program.
CHAIRMAN MACKIE asked if the groups were comfortable with the
language in the amendment.
SENATOR LEMAN stated he objected to hear the explanation of the
amendment but will maintain the objection because he does not
believe the amendment should be put forth for the State to maintain
neutrality. The legislature should try to keep language as simple
as possible, without inserting language where it does not serve a
purpose.
SENATOR HOFFMAN stated the CDQ groups he spoke with support the
amendment.
MR. BUSH stated federal legislation is required to expand the
program. The existing CDQ groups would oppose expansion of the
program because it might cause a reduction in their allocation of
fish. Those groups can get federal authorization to do that and
can receive an increase in allocation.
CHAIRMAN MACKIE stated he supports Senator Hoffman because the
legislature cannot take a position on this issue. The amendment
does not hurt SB 240, the current language could make the State
appear that it is advocating for the expansion of the CDQ program.
Amendment number two was adopted with Senators Hoffman, T. Kelly,
and Mackie voting "Yea", and Senator Leman voting "Nay."
MR. JOE KYLE, Aleutian Pribilof Island Group, stated support for SB
240 and the amendments.
MR. PETE SCHAEFFER, representing himself, stated all attempts at
participating in the CDQ program are economically driven. Some
fish have been completely wiped out and some groups do not qualify
for federal or State aid to remedy that situation. The difference
in Kotzebue is that the numbers of fish are somewhat biologically
sound, it is the market that has disappeared. The marine animals
do not pay attention to boundaries for the CDQ groups, and CDQ
groups are being penalized because of boundaries. Mr. Schaeffer
stated support for SB 240 and the amendments.
MR. GORDON ITO, representing himself, stated he would like to be
included in the CDQ program. The State should support expansion
because it is getting harder to survive in Alaska. Mr. Ito stated
he supports SB 240, but does not support Senator Hoffman's neutral
position.
CHAIRMAN MACKIE stated Senator Adams had requested the committee
consider including language that would allow for the new approved
CDQ groups not to pay fees for two years. Senator Hoffman offered
that amendment on Northwestern Alaska's behalf. SB 240 would not
be used as a vehicle of support for other CDQ groups.
MR. ITO stated he understood when the CDQ program started many
aspects were experimental. Adopting a neutral amendment portrays
that the State does not support the CDQ program.
SENATOR LEMAN moved CSSB 240 (L&C) with individual recommendations
and accompanying fiscal notes. Without objection, the motion
carried.
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