04/07/1995 01:40 PM Senate CRA

                SJR 21 ANWR SPECIAL REVENUE FUND                              
                                                                              
   CHAIRMAN TORGERSON  called the Senate Community & Regional Affairs          
 Committee meeting to order at 1:40 p.m. and introduced  SJR 21  as            
 the first order of business.                                                  
                                                                               
 SENATOR DRUE PEARCE, prime sponsor of SJR 21, said members of the             
 Senate and House were in Washington, D.C. the past weekend and  she           
 came away from Washington feeling like this is the year that                  
 Congress is going to act on allowing exploration and what is hoped            
 will then be eventual development on the coastal plain of the                 
 Arctic National Wildlife Refuge.  She added there is a sense of               
 urgency because this is the "window of opportunity year," and she             
 has been thinking for a period of time about how to deal with the             
 revenues that will come in from ANWR when the time comes.                     
                                                                               
 SJR 21 proposes placing before the voters of the state at the next            
 general election an amendment to the Constitution that would create           
 a special revenue fund of the revenues coming in from the Arctic              
 National Wildlife Refuge.  These are the royalties from any future            
 development except for the 50 percent share that's already required           
 by Alaska's Constitution to go in the Alaska Permanent Fund.  The             
 resolution does not get into the question of whether there should             
 be a 90/10 royalty split with the federal government, or whether              
 there should be a 50/50 royalty split with the federal government.            
 Senator Pearce said it is her personal belief that 50 percent of              
 something is a lot better than 90 percent of nothing, but that is             
 a decision that Congress will have to make.                                   
                                                                               
 Senator Pearce said the legislature could appropriate the money               
 that's in the fund only for assistance or aid to a municipality               
 under a program of aid to local governments that would be                     
 established by law in Title 29, or, secondly, for the support of              
 school construction and school major maintenance programs as is               
 currently embodied in Title 14.  She acknowledged that this is a              
 dedication of funds, but she believes that it is a dedication of a            
 special stream of funds.                                                      
                                                                               
 Senator Pearce said if ratified by the citizens of the state, there           
 would be a mechanism in place before ANWR is explored and before              
 development is a reality.  She believes that being able to go back            
 to Congress and letting them know how the state plans to use any              
 revenues that the state receives will help get some teetering back            
 at the Congressional level.                                                   
                                                                               
 Senator Pearce spoke to the funding problems municipalities have              
 been facing in the last 10 years and the increased financial                  
 responsibilities they are being required to take on because of                
 falling oil revenues.                                                         
                                                                               
 Number 095                                                                    
                                                                               
 SENATOR TORGERSON opened the meeting to public comment.                       
                                                                               
 CHARLES MCKEE, testifying from Anchorage, stated his opposition to            
 SJR 21 because he believes it takes revenues away from the                    
 permanent fund and the state treasury and places them in the                  
 control of a very large municipality in the Arctic that has run up            
 a very large debt burden.                                                     
                                                                               
 Number 125                                                                    
                                                                               
 BRAD PIERCE, Policy Analyst, Office of Management & Budget, stated            
 there is no official Governor's position on SJR 21 except that it             
 is "an interesting concept."                                                  
                                                                               
 Mr. Pierce said Governor Knowles is squarely behind the development           
 of ANWR and has repeatedly expressed his strong support for full              
 funding of education, as well as working out an equitable                     
 partnership with municipalities.  However, linking these three                
 concepts via a constitutional amendment is where the concerns                 
 arise.                                                                        
                                                                               
 The basic concern is with dedicated funds, and the basic problem is           
 that the particular interests of the education community and                  
 municipalities are elevated over other public service                         
 responsibilities.  As much as the public education, they question             
 whether it is in the state's interest to put it above everything              
 else.  Mr. Pierce believes this will run into the same kind of                
 opposition that Governor Cowper's education endowment did when                
 people begin to seriously examine the implications of giving school           
 construction and maintenance a higher priority than road                      
 maintenance, village sanitation facilities, etc.                              
                                                                               
 Number 215                                                                    
                                                                               
 KEVIN RITCHIE, Executive Director, Alaska Municipal League,                   
 expressed the appreciation of the 118 member communities in the               
 League for the introduction of SJR 21.  He stated their support for           
 the concept and the long-range planning process as one method of              
 bringing municipalities to the table and talking about the long-              
 term stability of the communities.                                            
                                                                               
 Number 235                                                                    
                                                                               
 There being no further testimony on SJR 21, SENATOR TORGERSON asked           
 for the will of the committee.                                                
                                                                               
 SENATOR R. PHILLIPS moved that SJR 21 be passed out of committee              
 with individual recommendations.  SENATOR KELLY objected and stated           
 he has never voted for a dedicated fund in 18 years and he is not             
 going to start this year.  A roll call was taken with the following           
 result:  Senators Phillips, Hoffman & Torgerson voted "Yea" and               
 Senator Kelly voted "Nay."  The Chairman stated the motion carried.