Legislature(2003 - 2004)

02/25/2004 01:35 PM Senate CRA

Audio Topic
* first hearing in first committee of referral
+ 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.                                                                                    

Document Name Date/Time Subjects