Legislature(1997 - 1998)

04/28/1997 02:10 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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                     HOUSE FINANCE COMMITTEE                                   
                         APRIL 28, 1997                                        
                            2:10 P.M.                                          
                                                                               
  TAPE HFC 97 - 114, Side 1, #000 - end.                                       
  TAPE HFC 97 - 114, Side 2, #000 - #082.                                      
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Co-Chair Gene Therriault called  the House Finance Committee                 
  meeting to order at 2:10 P.M.                                                
                                                                               
  PRESENT                                                                      
                                                                               
  Co-Chair Therriault           Representative Kelly                           
  Representative Davies         Representative Martin                          
  Representative Davis          Representative Moses                           
  Representative Foster         Representative Mulder                          
                                                                               
  Representatives  Grussendorf, Hanley  and  Kohring were  not                 
  present for the meeting.                                                     
                                                                               
  ALSO PRESENT                                                                 
                                                                               
  Senator  Bert  Sharp;  Brett  Huber,  Staff,  Senator   Rick                 
  Halford;  Jane  Angvik,   (Testified  via   teleconference),                 
  Director, Division of Land, Department of Natural Resources;                 
  Robert Nauheim, (Testified  via teleconference),  Department                 
  of Natural Resources.                                                        
                                                                               
  SUMMARY                                                                      
                                                                               
  HB 109    An Act relating to the  management and disposal of                 
            state  land  and  resources;  relating to  certain                 
            remote parcel  and homestead  entry land  purchase                 
            contracts  and  patents;   and  providing  for  an                 
            effective date.                                                    
                                                                               
            CS HB 109 (FIN) was reported out of Committee with                 
            a "do pass" recommendation and  with a fiscal note                 
            by  the  Department  of  Natural  Resources  dated                 
            4/23/97.                                                           
                                                                               
  SB 67     An Act  relating  to the  imposition  of  criminal                 
            sentences; and amending Rule 32.2, Alaska Rules of                 
            Criminal Procedure.                                                
                                                                               
            CS SB 67 (JUD) was reported out  of Committee with                 
  a "do          pass" recommendation and with fiscal notes by                 
                 the Department  of Law  dated 3/5/97, two  by                 
                 the Department of Public Safety dated 3/5/97,                 
                 the  Senate  Finance Committee  dated 3/13/97                 
                                                                               
                                1                                              
                                                                               
                                                                               
                 and a zero  fiscal note  by the Alaska  Court                 
                 System.                                                       
                                                                               
  SB 161    An Act relating to management of certain municipal                 
            assets by the Alaska Permanent Fund Corporation.                   
                                                                               
            CS SB 161 (FIN) was reported out of Committee with                 
            a "do pass" recommendation and  with a fiscal note                 
            by the Department of Revenue 4/15/97.                              
  HOUSE BILL 109                                                               
                                                                               
       "An  Act  relating to  the  management and  disposal of                 
       state land and  resources; relating  to certain  remote                 
       parcel and  homestead entry land purchase contracts and                 
       patents; and providing for an effective date."                          
                                                                               
  Co-Chair Therriault explained that HB  109 is a housekeeping                 
  measure  intended  primarily  to clarify  certain  Title  38                 
  statutes governing  the  Department  of  Natural  Resources'                 
  (DNR) management of State  land and resources.  The  bill is                 
  intended to bring  greater efficiency  to the management  of                 
  state lands by  simplifying programs  and reducing costs  to                 
  DNR.                                                                         
                                                                               
  Co-Chair Therriault noted the highlights of the legislation:                 
                                                                               
       *    Rewrite of the "remote  cabin permit program"                      
            to a program that would  allow for either the                      
            sale or lease for a  remote cabin site.   The                      
            permit program was never  implemented because                      
            of the associated  administrative costs  with                      
            only a minimal return to the State.                                
                                                                               
       *    Clarifies that the  sale of  state land  does                      
            not obligate the  State to provide additional                      
            services.                                                          
                                                                               
       *    Simplifies the methods to receive a homestead                      
            parcel title  by requiring  that within  five                      
            years,  a  parcel  must be  lived  on  for 25                      
            months or purchased at fair market value.                          
                                                                               
  JANE  ANGVIK,  (TESTIFIED  VIA   TELECONFERENCE),  DIRECTOR,                 
  DIVISION   OF  LANDS,   DEPARTMENT  OF   NATURAL  RESOURCES,                 
  commented that the  Department supports HB  109 as it  would                 
  clean-up Title 38, resulting in  the Division of Lands being                 
  operated more efficiently.   She  added that the  Department                 
  also  supports  the  amendments   distributed  to  Committee                 
  members.  She  spoke to  the shore fisheries  issue and  the                 
  Supreme  Court  ruling  regarding  that  concern.   Co-Chair                 
  Therriault  noted  that section  had  been dropped  from the                 
                                                                               
                                2                                              
                                                                               
                                                                               
  proposed legislation.                                                        
                                                                               
  Representative  J.   Davies  questioned  why  it   would  be                 
  difficult for the Division  of Lands to follow the  rules of                 
  the Supreme Court.  Ms. Angvik replied that the Kachemak Bay                 
  Watch case challenged  DNR to authorize aquatic  water sites                 
  on  State  lands, a  decision  which called  for significant                 
  aquatic planning efforts.   The  Court recommended that  the                 
  Department participate in a land  use plan identifying areas                 
  where  mari-culture could  occur and  which was  to  be done                 
  after an accumulative  evaluation of  all events that  could                 
  occur over time.   If the  Division of  Lands had to  comply                 
  with the  Court ruling,  it  would take  seven employees  to                 
  perform an area wide plan for all of the coastal regions  of                 
  the State.                                                                   
                                                                               
  Representative J. Davies inquired if  the Court required the                 
  Division to address the entire  State for permit operations.                 
  Ms.  Angvik  replied  that  the  Court  indicated  that  the                 
  Division had  failed in  Southeast  Alaska and  Southcentral                 
  Alaska,  so  they  ruled  that  the  entire  State  must  be                 
  undertaken.                                                                  
                                                                               
  Representative J. Davies asked if the Department was planing                 
  to return to the Legislature with statutes which make sense.                 
  Ms.  Angvik explained that the Division  is doing a thorough                 
  job  with each  mari-culture location  evaluation, although,                 
  the Court requested a higher  standard.  Discussion followed                 
  between Representative  Davies and Ms. Angvik regarding land                 
  use planning.                                                                
                                                                               
  Representative  Martin  voiced  concern  for  the  shoreline                 
  tidelands and  the coastal communities in  Southeast Alaska.                 
  Ms. Angvik stated  that the proposed amendment  was designed                 
  to allow  up-line owners to  obtain a non  competitive lease                 
  for dock sites.  In a tideland area,  a user can get a long-                 
  term lease  to be  able to  operate a dock.   The  amendment                 
  would allow  the tideland applicant  to apply for  a similar                 
  application for fresh water lakes and rivers.                                
                                                                               
  Co-Chair  Therriault asked  the terms  of a lease  for fresh                 
  water shore land.   Ms. Angvik replied that the  terms would                 
  probably  be  a  20  year  lease  for facility  on  a  carbo                 
  operation, instead of  a year  by year competitive  auction.                 
  The  issue of value  would be negotiated  between the lessee                 
  and the State through  an appraisal.  The amendments  do not                 
  address the negotiation process.                                             
                                                                               
  ROBERT NAUHEIM, (TESTIFIED  VIA TELECONFERENCE),  DEPARTMENT                 
  OF NATURAL  RESOURCES, offered to answer questions regarding                 
  litigation which lead to the language of the bill.                           
                                                                               
                                                                               
                                3                                              
                                                                               
                                                                               
  Representative  J. Davies  noted  that  the  litigation  had                 
  indicated that the process used was  not adequate.  The bill                 
  has been  accompanied by  an amendment  appropriate to  that                 
  concern.   He asked how a  facility could be  created in the                 
  future.                                                                      
                                                                               
  Mr. Nauheim explained  that the  legislation was written  to                 
  rescue several classes of  aquatic farming operations  which                 
  are in a difficult legal position.  The Alaska Supreme Court                 
  stipulated that the  application process  was invalid.   The                 
  Court  upheld  that the  identification  method used  by the                 
  Department  was faulty.    The  Department understood  that,                 
  initially, the identification process was  to be informal so                 
  as  to  aid  the application  process.    The  Supreme Court                 
  interpreted the straight forward language  to require a very                 
  detailed formal planning  process that  would result in  the                 
  identification of  districts where  specific sites  would be                 
  identified  for  issuance  of permits.    That  decision was                 
  determined invalid.   The new  legislation coupled with  the                 
  newest  amendments  will call  for  the  repeal of  the  old                 
  system.                                                                      
                                                                               
  Representative J. Davies questioned if the regulations would                 
  create a new process for permitting  of the facilities.  Mr.                 
  Nauheim advised that the new language would command that the                 
  commission adopt new regulations  and establish criteria for                 
  approving or denying the applications.   Regulations will be                 
  similar to the current ones.                                                 
                                                                               
  Representative J. Davies asked if  Amendment #3 was adopted,                 
  would a permit applicant be applying  for a finite period of                 
  time.  Ms. Angvik responded they  would need to apply within                 
  90 days.                                                                     
                                                                               
  Co-Chair  Therriault MOVED to adopt Amendment  #1.  [Copy on                 
  file].      Representative    Martin   questioned   if   the                 
  shoreline/tideline  concerns  in Southeast  Alaska  had been                 
  adequately  addressed.    Ms. Angvik  offered  to  work with                 
  Representative Martin  regarding his concerns.   There being                 
  NO OBJECTION to Amendment #1, it was adopted.                                
                                                                               
  Co-Chair Therriault MOVED  to adopt Amendment #2.   [Copy on                 
  file].  There being NO OBJECTION, it was adopted.                            
                                                                               
  Co-Chair Therriault MOVED  to adopt Amendment #3.   [Copy on                 
  file].  There being NO OBJECTION, it was adopted.                            
                                                                               
  Representative J. Davies MOVED to report CS HB 109 (FIN) out                 
  of Committee with  individual recommendations  and with  the                 
  accompanying fiscal  note.  There being NO OBJECTION, it was                 
  so ordered.                                                                  
                                                                               
                                                                               
                                4                                              
                                                                               
                                                                               
  CS HB 109  (FIN) was reported  out of  Committee with a  "do                 
  pass"  recommendation  and   with  a  fiscal  note   by  the                 
  Department of Natural Resources dated 4/23/97.                               
  SENATE BILL 67                                                               
                                                                               
       "An  Act  relating   to  the  imposition  of   criminal                 
       sentences;  and  amending  Rule 32.2,  Alaska  Rules of                 
       Criminal Procedure."                                                    
                                                                               
  BRETT HUBER, STAFF, SENATOR RICK  HALFORD, noted that when a                 
  felon  is sentenced to  a term  of imprisonment,  the public                 
  often receives a  false sense of  security by believing  the                 
  criminal  will  actually  be  incarcerated  for  the  stated                 
  sentence.   As a result of "good time", as well as mandatory                 
  and  discretional  parole  provisions,  the actual  sentence                 
  served is virtually guaranteed to be less than that which is                 
  imposed by the judge.                                                        
                                                                               
  If  enacted, SB 67 would  require that a  victim of a crime,                 
  their family, as  well as  the public, be  provided with  an                 
  accurate statement of the minimum period of time which  must                 
  be served  before the  criminal is  released.   At the  very                 
  least, the  victim and their  families, as well  the public,                 
  deserve an honest and  accurate assessment of the  amount of                 
  time a  criminal  will  actually  be incarcerated.    SB  67                 
  requires that the judge provide this information.                            
                                                                               
  Mr. Huber continued, the enactment of SB 67 would also allow                 
  the Department of Corrections to receive up to $650 thousand                 
  dollars in federal funds which are available to states which                 
  meet federal "truth in sentencing" guidelines.                               
                                                                               
  Representative Mulder asked  how the legislation  would help                 
  the State qualify for receiving  truth in sentencing grants.                 
  Mr. Huber noted that  Section #2 of the bill  added language                 
  by the Department of  Law.  The federal truth  in sentencing                 
  grant had initially required states to have a minimum of 85%                 
  of the sentence actually served  by those convicted.   Since                 
  that  time, the  federal  government  revamped the  program.                 
  Section  #2  does  not  change  any  of  the  sentencing  or                 
  mandatory parole procedures that the  State is in, although,                 
  it  does  provide language  which the  Department of  Law is                 
  comfortable will allow Alaska to qualify for the federal aid                 
  dollars.                                                                     
                                                                               
  Mr. Huber noted  that the fiscal note  accompanying the bill                 
  was prepared by  the Senate Finance Committee  and indicates                 
  estimated  federal  receipts  including  the  estimated  10%                 
  general fund match.                                                          
                                                                               
  Representative Foster MOVED to report CS  SB 67 (JUD) out of                 
                                                                               
                                5                                              
                                                                               
                                                                               
  Committee  with  individual  recommendations  and  with  the                 
  accompanying fiscal notes.  Representative Mulder  OBJECTED.                 
  He  noted that he  was considering an  amendment which would                 
  address  the  surcharges  on criminal  offense  fines.   The                 
  convicts who are able to pay for criminal offenses should be                 
  assessed those  fees.  He  believed the State  lagged behind                 
  the federal assessment allowance.   An amendment would allow                 
  the State  to recoup  funds  and money  to go  back for  the                 
  victims.                                                                     
                                                                               
  Representative Mulder  WITHDREW his OBJECTION.   There being                 
  NO further OBJECTION, it was so ordered.                                     
                                                                               
  CS SB  67 (FIN)  was reported out  of Committee  with a  "do                 
  pass" recommendation  and with  fiscal notes  by the  Alaska                 
  Court System, two by  the Department of Public  Safety dated                 
  3/5/97, the  Department of Law  dated 3/5/97 and  the Senate                 
  Finance Committee dated 3/13/97.  #SB161                                     
  SENATE BILL 161                                                              
                                                                               
       "An  Act  relating to  management of  certain municipal                 
       assets by the Alaska Permanent Fund Corporation."                       
                                                                               
  SENATOR  BERT  SHARP  stated   that  the  legislation  would                 
  authorize  the  Permanent  Fund  Corporation  to  manage the                 
  assets of a municipal savings or investment account.                         
                                                                               
  The parameter of  a management agreement  starts on Page  1,                 
  Line  9,  through the  remainder of  the  bill.   These were                 
  established by the corporation as conditions  to accommodate                 
  without compromising  their mission.  The  legislation would                 
  offer municipalities  the  option  of  investing  management                 
  services  within  Alaska.   The  management  costs  would be                 
  totally  reimbursable to  the Permanent Fund  Corporation by                 
  the municipalities.                                                          
                                                                               
  Representative  Martin  asked  the  advantage  to the  local                 
  municipalities.    Senator  Sharp  pointed  out  that  local                 
  governments  had sold  the  utilities.   Co-Chair Therriault                 
  commented  that  the  University's  trust  and  assets  were                 
  managed by the Department of Revenue.                                        
                                                                               
  Representative J.  Davies asked if the appropriation account                 
  would  be  a  general  fund   expenditure.    Senator  Sharp                 
  explained  that the  Permanent Fund  Corporation had  voiced                 
  concern that  the money  not be  deposited into the  general                 
  fund,  instead,  it  be  returned   to  the  Permanent  Fund                 
  Corporation through the  Earnings Reserve Account, confirmed                 
  by the Legislature.  Representative Davies agreed, although,                 
  noted that the Earnings Reserve  Account is an appropriation                 
  account and appropriations  from that account do  not appear                 
  as general funds.                                                            
                                                                               
                                6                                              
                                                                               
                                                                               
  Senator Sharp stated that the fiscal note indicates that the                 
  funds appear as  corporate receipts  to the Permanent  Fund.                 
  The fiscal note indicates that there was a reimbursement  of                 
  the Permanent Fund earnings account for those expenses.  Co-                 
  Chair Therriault stated  that budgeting for  the corporation                 
  come from corporate receipts from the earnings reserve.  The                 
  money which comes  for the management  of the fund would  be                 
  tracked in a similar fashion.                                                
                                                                               
  Representative J. Davies asked if the reserve earnings would                 
  remain in the  municipal account.   Senator Sharp  responded                 
  that any earnings not drawn by the municipality on an annual                 
  basis   would   stay  and   increase   the  assets   on  the                 
  municipalities account.                                                      
                                                                               
  (Tape Change HFC 97-114, Side 2).                                            
                                                                               
  Representative  G.   Davis  pointed  out  that   the  Alaska                 
  Municipal League has initiated and  is operating a Municipal                 
  Investment Pool.  He suggested that if  members were curious                 
  as to how much  money each municipality has to  invest, they                 
  could track those area pools.                                                
                                                                               
  Representative Foster MOVED to report CS SB 161 (FIN) out of                 
  Committee  with  individual  recommendations  and  with  the                 
  accompanying  fiscal note.  There being NO OBJECTION, it was                 
  so ordered.                                                                  
                                                                               
  CS SB 161  (FIN) was reported  out of Committee  with a  "do                 
  pass"  recommendation  and with  the  a fiscal  note  by the                 
  Department of Revenue dated 4/15/97.                                         
  ADJOURNMENT                                                                  
                                                                               
  The meeting adjourned at 3:05 P.M.                                           
                                                                               
                                                                               
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