Legislature(2003 - 2004)
02/25/2004 01:35 PM Senate CRA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 328-NATIONAL FOREST INCOME PROGRAM/DCED REGS
CHAIR BERT STEDMAN announced SB 328 to be up for consideration.
He said he was the sponsor and the bill was titled, "An Act
relating to the national forest income program in the Department
of Community and Economic Development and to the authority of
the department to adopt regulations; and providing for an
effective date." He asked his staff member to introduce the
bill.
DICK COOSE, staff to the sponsor, Senator Bert Stedman,
explained that, "This legislation makes the statutory changes
required for the Department of Community and Economic
Development to disburse the funds commonly referred to as the
timber receipts." The original act dates to 1908 and calls for
25 percent of national forest timber receipts to be distributed
to counties, boroughs, cities and rural school districts.
The "Secure Rural Schools and Community Self-Determination Act
of 2000," substantively changed the timber receipt program he
said,
The payments to the state under the "Secure Rural
Schools Act" are stabilized for that period of 2002 to
2007 rather than fluctuate the way it had been and
dropping rather significantly due mainly to the
reduction of timber sales on the national forest.
The distribution to the boroughs, the cities and the
rural education attendance areas changed only in the
fact that the new federal act required a 15 to 20
percent special projects out of that money and the
balance of it be spent on the traditional schools and
roads type things.
Special projects are defined in the Act and SB 328
allows the Department of Community and Economic
Development to prepare the regulations that reflect
this distribution and the accounting of the special
projects and makes the technical corrections to the
regulations.
SENATOR KIM ELTON asked him to elaborate on the special projects
mentioned in the federal act.
MR. COOSE explained there are Title II and Title III special
projects. Title II projects are accomplished by the Forest
Service using a resource advisory committee while Title III
special projects are controlled by the local borough through the
local elected body. He added it is the local government that
makes the choice with regard to which entity controls and does
the project.
SENATOR ELTON asked if this is a new distribution of the timber
receipts.
MR. COOSE said it is new because under the original legislation,
100 percent went to the local entities for schools and roads.
That changed with the new act and now up to 15 percent of the
total can be directed to special projects. The limitation is
that any body receiving less than $100,000 doesn't have to
specially allocate 15 percent.
SENATOR ELTON asked if that means that now the only guarantee
for schools and roads is 85 percent and the Forest Service or
the local government determines the remaining 15 percent.
MR. COOSE said, "That's true."
SENATOR LINCOLN advised her wasn't sure what she was asking
because the question came from a community. She read, "What is
the federal community development quota program and how does it
relate to the forest receipts program?"
MR. COOSE replied they aren't related. Community development
referred to in SB 328 relates to technical conforming changes
and has nothing to do with national forest receipts.
SENATOR LINCOLN said she had a second question that asks, "Does
this bill give the state authority to charge administrative
costs to the forest receipts program over which they charge
now?"
MR. COOSE said he too had that question and he isn't aware that
it does give that authority, but he would defer to Mr. Rolfzen.
SENATOR LINCOLN noted that the new act changed the allocation
for schools and roads from 100 percent to 85 percent. She
continued, "I always get a little concerned when my colleague
from the other side of the aisle is constantly asking, well what
do we contribute in the rural areas towards schools." She didn't
want to further erode funding for schools and then have to
defend doing so at a later time. She asked Mr. Coon if he could
help her respond.
MR. COOSE replied, "The positive thing about the Secure Rural
Schools Act is it stabilized it at a higher level than what we
were getting the last say 6 or 8 years because it was going
down."
For example, as a result of the new act the Ketchikan Gateway
Borough went from roughly $100,000 to $400,000 in forest
receipts. Even though the federal law requires that they put 15
percent into special projects, they have had an overall gain.
SENATOR LINCOLN asked if Ketchikan could have used the full
$400,000 for schools and roads or did they lose 15 percent.
MR. COOSE said they were not able to use 15 percent, which
amounted to $60,000 in Ketchikan.
SENATOR LINCOLN said she wanted to hear Mr. Rolfzen's response.
BILL ROLFZEN, national forest receipt program administrator,
Department of Community & Economic Development, explained that
the federal legislation back in 2000 severed the tie between
sharing income from timber harvest with local communities for
schools and roads in favor of a guarantee for higher payments.
The compromise at the federal level came in the form of the 15
percent that is set aside for stewardship type projects on
federal lands.
One eligible special project is search and rescue on federal
land and Juneau has opted to set aside their 15 percent to help
fund the helipad at the hospital for rescues that occur on
federal lands surrounding Juneau.
SENATOR LINCOLN asked whether communities could use the 15
percent for education.
MR. ROLFZEN said there is one special projects category that
calls for after school forest related education opportunities
and the REAAs in particular have used their 15 percent for that
sort of activity.
CHAIR STEDMAN asked him to elaborate on the fact that there is
flexibility in the annual 15 percent allowing communities to
respond to different projects.
MR. ROLFZEN explained that boroughs and communities have the
option of setting aside a minimum of 15 percent and a maximum of
20 percent each year for special projects. So far, all entities
have selected the minimum amount, he added.
The projects themselves provide considerable flexibility, he
said, and then reiterated that this is a federal requirement
that is implemented at the state level.
SENATOR GARY STEVENS confessed he wasn't sure that he followed
the explanation entirely and asked if the forest income money
that goes to communities for education becomes tied in with the
contribution cap that boroughs have to fund education. If it's
tied to the cap then it reduces the amount of money that local
communities can contribute to education, but if it's independent
then it is in addition to the cap.
MR. ROLFZEN replied, "It adds to their total. It has no impact
on the state financial aid or the federal aid."
SENATOR GARY STEVENS said, "So a local community can put in its
cap and then this adds additional monies to education."
MR. ROLFZEN nodded his head.
SENATOR ELTON followed up saying he thought timber receipts
money figured into the foundation formula.
MR. ROLFZEN said it doesn't.
SENATOR ELTON questioned, "So it goes straight to the districts
and then are our foundation formula dollars subtracted from the
districts then, to reflect the receipt of those dollars?"
MR. ROLFZEN replied, "To my knowledge, it is not offset in any
way a local aid for school districts."
SENATOR ELTON understood differently and asked for follow up
because, "My understanding is that this reduces kind of the bite
on our foundation formula - the receipt of those timber receipts
and that has always been.... seen as a local contribution from
those rural schools..."
Referring back to the discussion on how special receipts are
used, he asked who decides how and where the local share of that
15 percent is used.
MR. ROLFZEN explained the Title III funds go straight to the
borough and the borough assembly decides how to use the money.
SENATOR LINCOLN returned to the question of whether SB 328 gives
the state authority to charge administrative costs to the forest
receipts program over and above what is currently charged.
MR. ROLFZEN stated the state doesn't charge any administrative
expense against the program and noted they submitted a zero
fiscal note indicating no administrative cost. "We pass through
every penny through to the communities," he asserted.
CHAIR STEDMAN asked Senator Elton whether he would like the bill
held until he got an answer to the foundation formula question.
SENATOR ELTON noted the bill was moving to Finance and said he
would ask his staff member who used to be special assistant on
education and staff to the State Board of Education for
clarification. He said he would pass that information he
receives along to the committee and he didn't have any problem
moving the bill forward.
SENATOR GARY STEVENS made a motion to move SSSB 328 from
committee with individual recommendations and zero fiscal note.
There being no objection, it was so ordered.
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