03/26/2002 08:05 AM House CRA
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ALASKA STATE LEGISLATURE
HOUSE COMMUNITY AND REGIONAL AFFAIRS
STANDING COMMITTEE
March 26, 2002
8:05 a.m.
MEMBERS PRESENT
Representative Kevin Meyer, Co-Chair
Representative Carl Morgan, Co-Chair
Representative Andrew Halcro
Representative Drew Scalzi
Representative Lisa Murkowski
Representative Beth Kerttula
MEMBERS ABSENT
Representative Gretchen Guess
COMMITTEE CALENDAR
HOUSE BILL NO. 299
"An Act providing for the naming and renaming of Alaska
geographic features."
- MOVED CSHB 299(CRA) OUT OF COMMITTEE
HOUSE JOINT RESOLUTION NO. 32
Encouraging the United States Board on Geographic Names to adopt
place name changes proposed by the Alaska Historical Commission.
- MOVED HJR 32 OUT OF COMMITTEE
HOUSE BILL NO. 471
"An Act relating to the definitions of 'net income' and
'unrestricted net income' for purposes of determining the amount
of the Alaska Industrial Development and Export Authority's
dividend to the state; relating to communities within which
rural development loans may be made by the authority; and
providing for an effective date."
- MOVED CSHB 471(CRA) OUT OF COMMITTEE
PREVIOUS ACTION
BILL: HB 299
SHORT TITLE:ALASKA PLACE NAMES
SPONSOR(S): REPRESENTATIVE(S)DYSON
Jrn-Date Jrn-Page Action
01/14/02 1953 (H) PREFILE RELEASED 1/4/02
01/14/02 1953 (H) READ THE FIRST TIME -
REFERRALS
01/14/02 1953 (H) CRA, RES
03/19/02 (H) CRA AT 8:00 AM CAPITOL 124
03/19/02 (H) Scheduled But Not Heard
03/26/02 (H) CRA AT 8:00 AM CAPITOL 124
BILL: HJR 32
SHORT TITLE:FEDERAL PLACE NAMES
SPONSOR(S): REPRESENTATIVE(S)DYSON
Jrn-Date Jrn-Page Action
01/22/02 2028 (H) READ THE FIRST TIME -
REFERRALS
01/22/02 2028 (H) CRA, RES
03/26/02 (H) CRA AT 8:00 AM CAPITOL 124
BILL: HB 471
SHORT TITLE:AIDEA PROGRAMS
SPONSOR(S): REPRESENTATIVE(S)GREEN
Jrn-Date Jrn-Page Action
02/19/02 2314 (H) READ THE FIRST TIME -
REFERRALS
02/19/02 2314 (H) CRA, L&C
03/26/02 (H) CRA AT 8:00 AM CAPITOL 124
WITNESS REGISTER
REPRESENTATIVE FRED DYSON
Alaska State Legislature
Capitol Building, Room 104
Juneau, Alaska 99801
POSITION STATEMENT: Testified as the sponsor of HB 299 and HJR
32.
REPRESENTATIVE JOE GREEN
Alaska State Legislature
Capitol Building, Room 403
Juneau, Alaska 99801
POSITION STATEMENT: Testified as the sponsor of HB 471.
LAURA ACHEE, Staff
to Representative Green
Alaska State Legislature
Capitol Building, Room 403
Juneau, Alaska 99801
POSITION STATEMENT: Testified on behalf of the sponsor of HB
471.
BOB POE, Executive Director
Alaska Industrial Development and Export Authority (AIDEA)
and Alaska Energy Authority (AEA)
Department of Community & Economic Development
813 W Northern Lights Boulevard
Anchorage, Alaska 99503
POSITION STATEMENT: Testified on HB 471.
JIM McMILLAN, Deputy Director - Credit
Alaska Industrial Development & Export Authority (AIDEA)
and Alaska Energy Authority (AEA)
Department of Community & Economic Development
813 W Northern Lights Boulevard
Anchorage, Alaska 99503
POSITION STATEMENT: Testified on HB 471.
BRIAN BJORKQUIST, Assistant Attorney General
Governmental Affairs Section
Civil Division(Anchorage)
Department of Law
1031 W 4th Avenue, Suite 200
Anchorage, Alaska 99501-1994
POSITION STATEMENT: Mentioned the single subject rule in
realtion to Version C of HB 471.
ACTION NARRATIVE
TAPE 02-18, SIDE A
Number 0001
CO-CHAIR CARL MORGAN called the House Community and Regional
Affairs Standing Committee meeting to order at 8:05 a.m.
Representatives Morgan, Meyer, Halcro, and Scalzi were present
at the call to order. Representatives Murkowski and Kerttula
arrived as the meeting was in progress.
HB 299-ALASKA PLACE NAMES
HJR 32-FEDERAL PLACE NAMES
CO-CHAIR MORGAN announced that the committee would
simultaneously hear HOUSE BILL NO. 299, "An Act providing for
the naming and renaming of Alaska geographic features." and
HOUSE JOINT RESOLUTION NO. 32, Encouraging the United States
Board on Geographic Names to adopt place name changes proposed
by the Alaska Historical Commission.
Number 0105
REPRESENTATIVE FRED DYSON, Alaska State Legislature, testified
as the sponsor of HB 299 and HJR 32. Representative Dyson
explained that the U.S. Geological Survey (USGS) and the
[Alaska] Place Names Commission have the responsibility of
establishing geographical place names in Alaska. Although the
USGS takes recommendations from the state, there has been a
long-standing practice not to change established names.
Representative Dyson said that he appreciated that and the
desire to not create confusion. However, many of the place
names of Alaska's geographical features are named in
inappropriate ways. Representative Dyson mentioned the efforts
to change the name of Mt. McKinley to Denali, which has led to
both names appearing on many maps.
REPRESENTATIVE DYSON explained that HB 299 authorizes the state
agency to begin the process for the renaming of Alaska
geographical features for appropriate Alaska originating names
when the agency deems appropriate to do so. The resolution, HJR
32, requests that the federal government begin the process of
giving deference to the place names that come from Alaska.
Representative Dyson reviewed many place names that could be
named more appropriately. He informed the committee that the
[Alaska Place Names Commission] sees some very practical
problems in that the commission doesn't have much staff.
Without research staff, progress will be difficult. The
administration has produced a fiscal note that reflects the need
for staff. "At this point, I'm not overly optimistic that we
will get this project through the legislature this year," he
remarked. Therefore, he requested that the committee zero out
the fiscal note and adopt an amendment that he would suggest to
page 3.
Number 0621
CO-CHAIR MEYER inquired as to how the committee would zero out
the fiscal note.
REPRESENTATIVE DYSON answered that it merely requires a motion
that prevails.
CO-CHAIR MEYER pointed out that there will definitely be a cost
for this. He related his understanding that the fiscal note
would fund one-and-a-quarter person.
REPRESENTATIVE DYSON replied yes. He pointed out that the
legislation doesn't establish any deadlines or timelines and
thus he anticipated that the commission would begin the process
of developing its own criteria for the changing of place names.
This legislation merely authorizes [the commission] to begin
this process. Representative Dyson explained that currently the
commission's business has been reactive; never before has the
commission been in the business of changing names. If there is
more than one name proposed for a geographical feature, the
commission acts as a referee. Again, this merely authorizes the
commission to have this additional authority to change names
when the agency deems necessary.
Number 0790
CO-CHAIR MEYER asked if it would be possible to zero out the
fiscal note and request that the federal government pay for this
through the resolution.
REPRESENTATIVE DYSON replied no. He clarified that the
resolution merely requests that the federal government give
deference to the state recommendations. He reiterated that
generally, the federal government hasn't been receptive to
changing names on maps.
CO-CHAIR MEYER turned to a letter Representative Dyson wrote to
the Alaska Historical Commission that explained the intent. He
asked if Representative Dyson had received a response from the
Alaska Historical Commission.
REPRESENTATIVE DYSON noted that he met with the Alaska
Historical Commission during its recent annual meeting. He
remarked that the committee could view the fiscal note as the
Alaska Historical Commission's formal response. He agreed with
Co-Chair Meyer that their response is that they are willing to
do this, but money is necessary. The Native members of the
group, in particular, were excited with having this authority.
Number 0935
REPRESENTATIVE SCALZI related his understanding that if the
committee zeroed out the fiscal note and moved the bill, then
the committee would be supporting something without funding it
at this time.
REPRESENTATIVE DYSON agreed. In further response to
Representative Scalzi, Representative Dyson agreed that the
commission would consider [all proposed] names.
Number 1073
REPRESENTATIVE DYSON turned to his amendment, which read as
follows:
Page 3, line 26,
Delete "widely"
Following "feature"
Insert "or by local Alaskan Native people"
Number 1211
REPRESENTATIVE KERTTULA moved the above amendment, Amendment 1.
There being no objection, Amendment 1 was adopted.
Number 1239
REPRESENTATIVE KERTTULA moved that the committee zero out the
fiscal note, Amendment 2.
REPRESENTATIVE HALCRO objected.
REPRESENTATIVE KERTTULA explained that normally she would go
with the agency on a fiscal note. However, the bill doesn't
require any overt action. "In terms of making a statement, I
think it's a good idea. I think you're eventually going to
have, for them to do any of this including their duties they
already have, have to do this. But this time I could buy it
because I like the idea," she explained. She expressed her
desire for this to make it to the floor this session.
REPRESENTATIVE HALCRO withdrew his objection.
CO-CHAIR MEYER noted his support of zeroing out the fiscal note,
but pointed out that the risk is that [the commission] won't do
it. He said that he was willing to support the amendment if
Representative Dyson was willing to take that risk.
REPRESENTATIVE DYSON suspected and hoped that some local folks,
Native Alaskans in particular, will propose some changes.
Hopefully, there will only be a few proposals that the
commission can handle as a course of their normal business.
Representative Dyson announced his intention to support more
staff for the Alaska Historical Commission and the naming board
in the future. However, he didn't believe this is a good year
to look for more money for something that, although important,
isn't vital to the state's business.
Number 1393
CO-CHAIR MEYER moved to report HB 299 as amended out of
committee with individual recommendations and the accompanying
zero fiscal note. There being no objection, CSHB 299 was
reported from the House Community and Regional Affairs Standing
Committee.
CO-CHAIR MEYER moved to report HJR 32 out of committee with
individual recommendations. There being no objection, HJR 32
was reported from the House Community and Regional Affairs
Standing Committee.
The committee took a brief at-ease from 8:27 a.m. to 8:31 a.m.
HB 471-AIDEA PROGRAMS
CO-CHAIR MORGAN announced that the next order of business would
be HOUSE BILL NO. 471, "An Act relating to the definitions of
'net income' and 'unrestricted net income' for purposes of
determining the amount of the Alaska Industrial Development and
Export Authority's dividend to the state; relating to
communities within which rural development loans may be made by
the authority; and providing for an effective date."
Number 1516
REPRESENTATIVE CO-CHAIR MEYER moved to adopt Version 22-
LS1560\C, Cook, 3/20/02, as the working document. There being
no objection, Version C was before the committee.
REPRESENTATIVE JOE GREEN, Alaska State Legislature, Sponsor of
HB 471, deferred to his staff.
LAURA ACHEE, Staff to Representative Green, Alaska State
Legislature, testified on behalf of the sponsor. She explained
that by statute the Alaska Industrial Development and Export
Authority (AIDEA) pays yearly dividends into the general fund
(GF) of the state. The Governmental Accounting Standards Board
(GASB), which establishes the standards for the auditing
procedures and financial statements that AIDEA puts out, has
made recent changes. The statute that determines the dividend
refers to net income and unrestricted net income as the amounts
which are used to calculate the dividend. The [net income and
unrestricted net income] are obtained from the annual audited
financial statement from AIDEA. However, under the new GASB
standards those figures can't be used on the annual audited
statement. Therefore, the statute points to numbers that no
longer exist. In Ms. Achee's opinion, the most important
accomplishment of HB 471 is that it places definitions for net
income and unrestricted net income in statute, which provides
values that will correspond with the GASB standards.
MS. ACHEE informed the committee that GASB also said that any
payouts would have to be charged to AIDEA as an expense,
including the dividend that is paid to the GF each year.
Therefore, when AIDEA does its accounting for next year, AIDEA
would have to count the dividend that it paid out in the prior
year as an expense, which would lower the base numbers in the
calculations for next year's dividend payout. Over time,
dividends would decrease. Therefore, Sections 2 and 3 specify
that [net income and unrestricted net income] exclude the
amounts attributable to intergovernmental transfers, capital
contributions, or grants.
MS. ACHEE pointed out that Section 4 makes changes to the Rural
Development Initiative Fund (RDIF) run by AIDEA. This fund
provides commercial loans to rural businesses that wouldn't
necessarily qualify for a commercial loan under guidelines
established in the Lower 48. There were some gray areas; that
is, there were some areas that qualified as rural, but were
located very near an urban center. Therefore, [Section 4]
tightens the restrictions on the program in order to ensure that
[the loans] go to those businesses that truly qualify.
Number 1774
CO-CHAIR MORGAN announced that he had discussed an amendment
with the sponsor of HB 471, which is incorporated in Version C.
The amendment incorporated in Version C changes the rural bulk
fuel revolving loan fund from "$100,000" to "$200,000". He
explained that many communities in Bush Alaska purchase fuel in
bulk and the more fuel that is purchased the better the rate,
and therefore there is the need to increase the fund to
[$200,000].
REPRESENTATIVE HALCRO returned to the issue of the changes of
GASB. He related his understanding that because of the changes
associated with Section 2, the dividend taken this year would
have to be taken as an expense next year and thus lower the
dividend. He asked if the accounting standards specify how that
should be handled.
MS. ACHEE deferred to expert witnesses.
REPRESENTATIVE GREEN said that [the federal government] doesn't
address that and thus there is the need to define net profits.
He explained that if one makes $100 and has costs of $90, under
the current system there would be $10 net profit and if $5 was
placed in the GF that was fine. However, now that $5 is viewed
as an intergovernmental transfer and thus has to be shown as an
expense, and therefore the net profit is really only $5. The
problem is that AIDEA can't actually provide up to half of its
net profits to the GF. Therefore, [HB 471] specifies that net
profits means that difference between income and expense as it
does in any other accounting.
REPRESENTATIVE HALCRO related his understanding that these
changes are being made because of [GASB] changes. Therefore,
[HB 471] adopts the changes with an exception to those changes
in Section 3.
REPRESENTATIVE GREEN replied yes. He clarified, "Not in true
accounting words, but we're adding a definition that is not
included in the new general accounting."
Number 2004
BOB POE, Executive Director, Alaska Industrial Development and
Export Authority (AIDEA) and Alaska Energy Authority (AEA),
Department of Community & Economic Development, testified via
teleconference. Mr. Poe commented that the dividend program
with AIDEA has been working well for AIDEA as well as the state.
Since 1996 AIDEA has paid in or committed to pay in over $128
million in dividends. The problem is that GASB 33 and 34
impacted how AIDEA's dividend program works. The desire is to
keep the dividend working as it has. Therefore, Representative
Halcro's statements were fairly accurate in that this is an
attempt to state in law how the AIDEA dividend will be
calculated regardless of what GASB 33 and 34 require in AIDEA's
audited financial report, which will comply with GASB 33 and 34.
Mr. Poe turned to the RDIF program and explained that the
language in [HB 471] is an attempt to [direct] the loan program
to those businesses that it was intended to serve.
MR. POE noted that he hasn't seen the CS, but he understood that
Version C increases the amount of funds that can be loaned under
the rural bulk fuel revolving loan fund from $100,000 to
$200,000. The [department] supports that provision. Mr. Poe
mentioned that AIDEA has been informed by the USDA that AIDEA
has been awarded a $5 million contribution to the bulk fuel
revolving loan fund, which has a significant impact in the
amount of the revolving fund. He agreed with Co-Chair Morgan
that the capacity for bulk fuel storage in rural Alaska has
increased significantly. Additionally, quantity discounts do
prevail even in rural Alaska. Mr. Poe explained that this
program works well because it allows communities to buy their
fuel in advance and the money is collected and the loan is paid
back as the fuel is sold to residents. He pointed out that it
would be difficult for urban Alaskans to pay for all their fuel
consumption for the next seven or eight months in October.
However, that is what rural communities do on a regular basis.
Therefore, raising the amount to $200,000 is a positive step.
Number 2259
REPRESENTATIVE HALCRO returned to Sections 2 and 3. He
expressed the need to be sure that this exception to general
accounting standards isn't going to come back to haunt the
state. He inquired as to how Sections 2 and 3 will apply to the
AIDEA dividend in practical terms.
MR. POE explained that the changes will allow AIDEA to continue
to pay the dividend as it has since 1996. The AIDEA board has
to find that the dividend is Okay to pay, which requires review
of the following issues: the future cash demands of AIDEA, the
financial wherewithal, and the bond covenants. All of those
must be found to be satisfactory before AIDEA can state a
dividend.
MR. POE continued by explaining that currently AIDEA's income
statement takes the net income from which it is allowed to make
a dividend from 25-50 percent of the earnings in that year.
That dividend would represent two years out. The board
determines what percentage the dividend can be. That dividend
was 47 percent this year, which is fairly typical. Therefore,
[Sections 2 and 3] intend to address an unintended consequence
of GASB 34.
Number 2457
JIM McMILLAN, Deputy Director - Credit, Alaska Industrial
Development & Export Authority (AIDEA) and Alaska Energy
Authority (AEA), Department of Community & Economic Development,
testified via teleconference in regard to RDIF. He explained
that RDIF began in 1992 in order to provide commercial financing
for those businesses located in areas where there is no access
to conventional financing. The enabling legislation of 1992
included a definition of community, which is used in qualifying
borrowers. In 1999 DCED was reorganized and RDIF was
transferred to AIDEA. However, the definition of community
wasn't included in the legislation. Therefore, this amendment
[HB 471] reinserts the definition of community and attempts to
further clarify an eligible community under RDIF.
REPRESENTATIVE GREEN returned to the bulk fuel storage issue.
He recalled that recently there was a severe winter in which
some villages had to import additional fuel. Therefore, those
villages didn't receive the volume discount nor the summer
discount. Therefore, [Version C] could help bypass such
catastrophe.
Number 2603
BRIAN BJORKQUIST, Assistant Attorney General, Governmental
Affairs Section, Civil Division(Anchorage), Department of Law,
testifying via teleconference noted that he primarily works with
AIDEA and AEA. Mr. Bjorkquist turned to the bulk fuel loan
program amendment that is incorporated in Version C, and
remarked that its insertion raises the single subject rule. Mr.
Bjorkquist related his understanding that Legislative [Legal and
Research Services] has reviewed this question and determined
that public corporation is the single subject. Therefore, the
amendment seems to be defensible from a legal standpoint. Mr.
Bjorkquist acknowledged that both AIDEA and AEA support the
amendment incorporated in Version C.
REPRESENTATIVE SCALZI inquired as to the history of the single
subject rule.
Number 2740
MR. BJORKQUIST explained that the [Alaska] Constitution provides
that any bill must be limited to a single subject. However, the
courts have interpreted that section very broadly. The single
subject can be anything in a broad topic as long as there is
only one subject. Mr. Bjorkquist noted that there are
exceptions to the single subject rule such as appropriations
legislation or restating of legislation; both of those aren't
applicable here.
REPRESENTATIVE SCALZI remarked that he didn't realize the
increase to $200,000 would create such debate.
CO-CHAIR MORGAN, upon there being no one else to testify,
announced that public testimony was closed.
Number 2868
REPRESENTATIVE MURKOWSKI moved to report CSHB 471, Version 22-
LS1560\C, Cook, 3/20/02, out of committee with individual
recommendations and the accompanying zero fiscal note. There
being no objection, CSHB 471(CRA) was reported from the House
Community and Regional Affairs Standing Committee.
ADJOURNMENT
There being no further business before the committee, the House
Community and Regional Affairs Standing Committee meeting was
adjourned at 9:00 a.m.
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