Legislature(2001 - 2002)
04/01/2002 02:00 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
April 01, 2002
2:00 P.M.
TAPE HFC 02 - 71, Side A
CALL TO ORDER
Co-Chair Williams called the House Finance Committee meeting
to order at 2:00 P.M.
MEMBERS PRESENT
Representative Bill Williams, Co-Chair
Representative Eldon Mulder, Co-Chair
Representative Con Bunde, Vice-Chair
Representative Eric Croft
Representative John Davies
Representative Bill Hudson
Representative John Harris
Representative Ken Lancaster
Representative Jim Whitaker
MEMBERS ABSENT
Representative Richard Foster
Representative Carl Moses
ALSO PRESENT
Representative Lesil McGuire; Heath Hilyard, Staff,
Representative Jeanette James; Barbara Belknap, Executive
Director, Alaska Seafood Marketing Institute, Department of
Community and Economic Development; Jerry McCune, United
Fishermen of Alaska (UFA), Juneau; Eddy Jeans, Manger,
School Finance and Facilities Section, Department of
Education and Early Development
PRESENT VIA TELECONFERENCE
Herb Jensen, United Salmon Association, Prince Williams
Sound, Cordova; Dee Hubbard, Sterling
SUMMARY
HB 390 An Act extending the termination dates of certain
activities and salmon marketing programs of the
Alaska Seafood Marketing Institute and of the
salmon marketing tax; expanding the allowable use
of that tax for the salmon marketing programs of
the Alaska Seafood Marketing Institute; relating
to the Alaska Seafood Marketing Institute's salmon
marketing committee; and providing for an
effective date.
HB 390 was reported out of Committee with a "do
pass" recommendation and with fiscal note #1 by
the Department of Community & Economic
Development.
HB 451 An Act relating to municipal bond reimbursement
for school construction; and providing for an
effective date.
HB 451 was reported out of Committee with a "do
pass" recommendation and with a zero fiscal note
#1 by the Department of Education & Early
Development.
#HB380
HOUSE BILL NO. 380
An Act relating to reimbursement for certain Medicare
premium charges for persons receiving benefits from the
teachers' retirement system, the judicial retirement
system, the elected public officers retirement system,
and the public employees' retirement system.
Representative Lesil McGuire explained that HB 390 would
extend the termination date of certain activities and salmon
marketing programs of the Alaska Seafood Marketing Institute
(ASMI) and the salmon marketing tax.
Under current uncodified law, the salmon marketing
activities and programs of ASMI described in AS 16.51.100
(7)-(9), terminate on June 30, 2004. The salmon marketing
tax described in AS 43.76.110-43.76.130, which supports
certain ASMI activities and ASMI's domestic salmon marketing
program, terminates June 30, 2003. HB 390 would extend
those activities and programs and the tax for an additional
five years.
In addition, HB 390 would amend AS 43.76.120(d) to permit
salmon marketing tax revenue to be appropriated for use in
ASMI's international salmon marketing as well as for use in
its domestic salmon marketing program. The changes would
assure the continuation of the important work of ASMI and
would provide greater flexibility in the marketing of Alaska
salmon to the international marketplace.
Representative McGuire urged that the bill moved quickly
from the House Finance Committee.
Vice-Chair Bunde asked the original motivation for including
the domestic limitation.
Representative McGuire explained that when the board, which
address salmon marketing, was created, Alaska was primarily
exporting salmon to international markets. It was believed
at that point that there was a domestic market, waiting to
be explored, which was the reason for that limitation.
Changing it now, reflects the changing times within the
market and is an effort, which provides more tools.
Representative Harris clarified that the money would be paid
through the taxes paid by the fishermen.
Representative McGuire advised that the requested amount
would result from a 1% excise tax, which was paid by the
fishermen. She reiterated that it was being paid by the
industry, not the Legislature.
BARBARA BELKNAP, EXECUTIVE DIRECTOR, ALASKA SEAFOOD
MARKETING INSTITUTE, DEPARTMENT OF COMMUNITY AND ECONOMIC
DEVELOPMENT, advised that passage of the bill would extend
the 1% excise tax for a second time. She pointed out that
the action would provide for the second five-year period
renewal. By renewing it this year, will allow ASMI to keep
out of a "wind-down type scenario". She added that the
Board of Directors supports removing the "domestic"
restrictions.
Representative Hudson questioned the reason to spend more
than the oversea portion.
Ms. Belknap explained that the Board of Directors would
determine the actual make-up. She added that ASMI hoped to
use the 1% as a match for some of the overseas funding,
adding that her sense was that the vast majority of the
funds would stay within the U.S. market. There would be
additional funding that could be used to leverage federal
funds for the overseas markets. There continues to be
definite interest in the Japanese and European market for
the Alaskan salmon.
HERB JENSEN, [TESTIFIED VIA TELECONFERENCE], UNITED SALMON
ASSOCIATION, CORDOVA, proposed an amendment to HB 390 that
would note a one-year extension instead of the five year, as
there is a planned meeting in 2002. He believed that change
would make sense and would create a win-win situation for
all concerned.
Representative Harris commented that the bill would extend
ASMI marketing out to 2008, 2009. He noted that making no
changes to the bill would extend it for only one more year.
He pointed out that Ms. Belknap's explanation addresses
concerns to reach the sunset date. Representative Harris
questioned why a one-year extension period would be
beneficial for the State.
Mr. Jensen responded that many fishermen do not agree that
ASMI is working to the benefit of all fishermen. Some
fishermen believe that the current charter needs some
changes. He reiterated that ASMI has not benefited all
fishermen and thought that the Legislature should wait for
one year to reauthorize the program.
Co-Chair Williams recommended that the bill be amended in
future committee's of referral. He advised that the
Committee should continue full discussion and consideration
of HB 390.
Mr. Jensen agreed.
In response to Mr. Jensen, Representative Hudson said that
to extend the proposed program for only one year would be a
"waste of money". He warned that this type of program
requires continuity for recognition.
Representative Hudson proposed that the United Salmon
Association and the ASMI Board have a meeting to address the
concerns voiced by Mr. Jensen.
Mr. Jensen responded that there is a lot of frustration
amongst the fishermen and that he would be willing to meet
with ASMI.
JERRY MCCUNE, UNITED FISERMEN OF ALASKA (UFA), JUNEAU,
voiced support for the bill as written. He pointed out that
the original concern was that the domestic market be
included. Now that the economics in Japan are down, many
people are switching over to the European and domestic
market to get more value for their product. Mr. McCune
stated that a long-range plan was needed with the 1% renewal
tax.
Representative Hudson MOVED to report HB 390 out of
Committee with individual recommendations and with the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
HB 390 was reported out of Committee with a "do pass"
recommendation and with fiscal note #1 by Department of
Community & Economic Development dated 2/27/02.
#HB451
HOUSE BILL NO. 451
An Act relating to municipal bond reimbursement for
school construction; and providing for an effective
date.
HEATH HILYARD, STAFF, REPRESENTATIVE JEANNETTE JAMES, stated
that HB 451 would correct the disparity in statute between
grant proposals and bond reimbursement for school
construction. Currently, the statute requires the
presentation of a preventative maintenance plan when
reviewing school construction grant proposals, but there is
no such requirement for bond reimbursement. Mr. Hilyard
stated that HB 451 would correct that disparity requiring a
preventative maintenance plan in bond reimbursement
proposals.
Representative Whitaker asked if there had been any negative
feedback.
Mr. Hilyard was not aware of any vocal opposition to the
legislation.
Representative Davies noted his concern on Page 3, sub
Section (b) with the clause that the district "is adequately
following the preventive maintenance plan". He asked about
circumstances in which the district does not have the
funding to do that.
EDDY JEANS, MANGER, SCHOOL FINANCE AND FACILITIES SECTION,
DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT, explained
that preventative maintenance programs are a general
operation of maintenance requirements. All school districts
should have some type of preventative maintenance plan in
place. Some school districts cannot meet the 70-30 percent
instructional program requirement. The Department lets
those districts know that is why there is a waiver program
in place to help meet that requirement. Not meeting that
requirement is beyond the districts control and provides
justification to submit a waiver.
In 1988, the Legislature adopted, the five criteria, which
the Department should measure as an eligibility requirement
for being placed on the State's major maintenance, school
construction.
Representative Davies asked the number of districts that
were up to date on the proposed statute. He asked if the
adoption would be harmful to any districts that might not be
able to apply for bonding.
Mr. Jeans replied that there are two people that are
reviewing school districts compliance for the maintenance
programs. Currently, there is not one district that meets
all five of the requirements. Through the Department's
regulatory process, the definition of the five points has
been expanded and the Department has allowed a grace period.
At the next board meeting, an additional one-year grace
period will be put forth to help comply with all five of the
requirements. Some of the districts meet only two of the
requirements. The intent of the grace period is to provide
the Legislature the assurance that districts do have and are
following a preventative maintenance program.
Representative Davies asked what would the Department's
position would be on applying for new bonding in the future.
Mr. Jeans replied that would happen on the grant side before
the bonding side. Regarding the five criteria and the
preventative maintenance program, the Department is putting
forth every effort to assure that the districts do have a
program that meets the statutory requirements. The
Department has developed the renewal and replacement
schedule for the school districts. That action would help
the school districts and the Department in their work with
the Legislature in addressing statewide needs.
Representative Whitaker attempted to clarify information on
school districts without bonding capabilities. He asked if
those would mostly be the rural schools. Representative
Whitaker questioned whether #5 would affect that group.
Mr. Jeans explained that it would apply to the debt
reimbursement program. The provisions already exist in
statute for the grant program, which applies to Regional
Education Attendance Areas (REAA's). The REAA's do not have
bonding capacity or authority. The grant program is their
only option to receive State aid for school construction and
major maintenance. REAA's would have a problem before the
municipal districts. The point is if that contributes to
their inability to meet the minimum expenditure requirement
on instruction, that would be a justifiable reason to
request a waiver and the Department would take that into
consideration.
DEE HUBBARD, [TESTIFIED VIA TELECONFERENCE], STERLING,
explained that when the Legislature adopted SB 7, it charged
the communities and districts to take all the school
construction process and make them apply an equitable method
across the State. Principles of fiscal responsibility are
also a charge that the Legislature gave to the school
districts. In regards to the preventative maintenance
statute, the bonding does not apply to bonding
reimbursement. She added that in February, her group
endorsed the bill. For the system to remain fair and
consistent, the requirements in the preventative maintenance
statute and regulations must apply to all funding
mechanisms.
The Department has worked really hard to make sure that the
school districts would be eligible to apply, based on the
preventative maintenance statute. At their latest meeting,
they addressed the unintended consequences of having to
spend additional funds to guarantee that a school district
would be eligible. She thought that would be a problem with
a 70/30 requirement under SB 36. She urged, there be quick
passage of the bill from the House Finance Committee.
Representative Davies MOVED to report HB 451 out of
Committee with individual recommendations and with the
accompanying fiscal note by the Department. There being NO
OBJECTION, it was so ordered.
HB 451 was reported out of Committee with a "do pass"
recommendation and with a zero fiscal note #1 by Department
of Education & Early Development.
ADJOURNMENT
The meeting was adjourned at 2:36 P.M.
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