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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