Legislature(2003 - 2004)
02/20/2003 01:45 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
February 20, 2003
1:45 P.M.
TAPE HFC 03 - 22, Side A
TAPE HFC 03 - 22, Side B
TAPE HFC 03 - 23, Side A
CALL TO ORDER
Co-Chair Williams called the House Finance Committee meeting
to order at 1:45 P.M.
MEMBERS PRESENT
Representative Bill Williams, Co-Chair
Representative Kevin Meyer, Vice-Chair
Representative Eric Croft
Representative Richard Foster
Representative Mike Hawker
Representative Reggie Joule
Representative Carl Moses
Representative Bill Stoltze
Representative Jim Whitaker
MEMBERS ABSENT
Representative John Harris, Co-Chair
ALSO PRESENT
Representative Mark Chenault; Representative Norman
Rokeberg; Representative Bruce Weyhrauch; Representative
Carl Morgan; Cheryl Frasca, Director, Division of Management
& Budget, Office of the Governor; Tom Wright, Staff,
Representative John Harris; Rick Urion, Director, Division
of Occupational Licensing, Department of Community &
Economic Development; Pat Davidson, Director, Division of
Legislative Audit; Kaye Kanne, Executive Director, Juneau
Family Birth Center; Midge Clouse, Division of Community and
Business Development, Department of Community & Economic
Development; Loren Gerhard, Policy Director, Southeast
Conference, Juneau; Kimberly Duke, Executive Director,
Arctic Power, Anchorage; Barbara Huff-Tuckers, Director of
Legislative and Governmental Affairs for Local 959, Juneau;
Matt Davidson, Alaska Conservation Voters, Juneau.
PRESENT VIA TELECONFERENCE
Dana Brown, Executive Director, Fairbanks Birth Center,
Fairbanks; Ginny Wood, Fairbanks; Brad Snow, Self,
Fairbanks; Deb Moore, Arctic Coordinator, Northern Alaska
Environmental Center, Fairbanks; Jim Sykes, Founder, Oil
Watch-Alaska, Mat-Su; Wanetta Ayers, Executive Director,
Southwest Alaska Municipal Conference (SWAMC), Anchorage;
Sue Cogswell, Prince Williams Sound Economic Development
District (PWSEDD), Anchorage; Carl Berger, Executive
Director, Lower Kuskokwim Economic Development Council,
Bethel; Jim Carter, Director, Kenai Peninsula Economic
Development District, Kenai; Mike Navarre, Arctic Power
Board, Self, Kenai; Sally Ann Carey, Member of Arctic Power,
Health, Safety and Environmental Training Consultants,
Anchorage; Mary Shields, Manager, Northwest Technical
Services, Anchorage; Luci Beach, Gwitch Steering Committee,
Fairbanks.
SUMMARY
HB 9 An Act relating to the registration of individuals
who perform home inspections; relating to
regulation of contractors; relating to
registration fees for specialty contractors, home
inspectors, and associate home inspectors;
relating to home inspection requirements for
residential loans purchased or approved by the
Alaska Housing Finance Corporation; relating to
civil actions by and against home inspectors and
to civil actions arising from residential unit
inspections; and providing for an effective date.
CS HB 9 (FIN) was reported out of Committee with a
"do pass" recommendation and with zero fiscal note
#1 by the Department of Revenue, zero fiscal note
#2 by the Department of Law, zero fiscal note #3
by the Department of Labor & Workforce
Development, and fiscal note #4 by the Department
of Community & Economic Development.
HB 71 An Act extending the termination date of the Board
of Certified Direct-Entry Midwives.
HB 71 was reported out of Committee with a "do
pass" recommendation and with a fiscal note #1 by
the Department of Community & Economic
Development.
HB 79 An Act extending the termination date of the
Alaska regional economic assistance program; and
providing for an effective date.
HB 79 was reported out of Committee with a "do
pass" recommendation and with a new fiscal note by
the Department of Community & Economic
Development.
HB 100 An Act making supplemental and other
appropriations; amending appropriations; and
providing for an effective date.
HB 100 was HEARD & HELD in Committee for further
consideration.
HB 101 An Act making a special appropriation for a grant
to Arctic Power to promote the opening of the
Arctic National Wildlife Refuge for oil and gas
exploration and development; and providing for an
effective date.
HB 101 was HEARD & HELD in Committee for further
consideration.
HB 110 An Act making supplemental and other
appropriations; amending appropriations; making
appropriations to capitalize funds; and providing
for an effective date.
HB 110 was HEARD & HELD in Committee for further
consideration.
HOUSE BILL NO. 71
An Act extending the termination date of the Board of
Certified Direct-Entry Midwives.
REPRESENTATIVE BRUCE WEYHRAUCH advised that the Board of
Certified Direct-Entry Midwives (CDM) consists of five
members appointed by the Governor. The duties of the Board
include examining and certificating applicants, permitting
apprentices, holding hearings and ordering disciplinary
sanctions. The Board also adopts regulations to establish
certification and certification renewal requirements.
Representative Weyhrauch added that the Board has served as
a means to make people practicing in midwifery aware of the
level of experience and education expected of them. Also,
by having a board, the individuals that practice midwifery
are held accountable to an established standard of care.
Women seeking an alternative to hospital care for normal
pregnancy and birth rely on the diligence of the board to
enhance both the quality and accessibility of their
healthcare. He added that an enhancement is that the Board
worked with the State of Alaska to establish Medicaid
procedures for CDM services, thereby, placing Alaska among
eight states which both license their traditional midwives
and provide Medicaid reimbursement for their services.
He noted that the Board is scheduled to terminate June 30,
2003 and if the Legislature does not act this session, the
Board will have one year to conclude its administrative
operations. Representative Weyhrauch stated that based upon
recommendations by the Division of Legislative Audit, HB 71
would extend the Board's termination date to June 30, 2007.
He requested that the bill pass from Committee without any
changes.
DANA BROWN, (TESTIFIED VIA TELECONFERENCE), EXECUTIVE
DIRECTOR, FAIRBANKS BIRTH CENTER, FAIRBANKS, spoke in
support of the legislation, requesting that the extension be
made. She added that the Board guarantees that high
standards and safety are maintained throughout the State for
midwifery services.
KAYE KANNE, EXECUTIVE DIRECTOR, JUNEAU FAMILY BIRTH CENTER,
PRESIDENT OF THE MIDWIVES ASSOCIATION OF ALASKA, pointed out
that the Board's inception was in 1992. The Board has done
an exemplary job of writing and implementing regulations for
the governing of CDM's and as a result, midwives in Alaska
are professional, well trained and provide safe care for
women and families.
Ms. Kanne stated that Alaska has one of the best midwifery
laws in the United States. Direct-Entry midwifery is
recognized across the nation, with licensing for midwives in
21 states, and legislation pending in 8 more. Many more
women are seeking the continuity of care and family centered
maternity care which midwifery does provide. In some
Alaskan communities, midwifes delivered 25% of the births.
In Juneau, midwives deliver approximately 15% of all births.
She urged that the Board be extended four years more in
order that they can continue with the good work that they
have accomplished.
RICK URION, DIRECTOR, DIVISION OF OCCUPATIONAL LICENSING,
DEPARTMENT OF COMMUNITY & ECONOMIC DEVELOPMENT, voiced his
support for the legislation. He agreed that the State
midwives do a very good job and that the Board operates in
an efficient manner. The fiscal note requires no additional
funding.
Representative Foster MOVED to report HB 71 out of Committee
with individual recommendations and the accompanying fiscal
note.
There being NO OBJECTION, it was so ordered.
HB 71 was reported out of Committee with a "do pass"
recommendation and with fiscal note #1 by the Department of
Community & Economic Development.
HOUSE BILL NO. 79
An Act extending the termination date of the Alaska
regional economic assistance program; and providing for
an effective date.
REPRESENTATIVE CARL MORGAN observed that the Alaska Regional
Development Organizations (ARDOR) Program is the State's
contribution to regional initiatives for developing Alaska's
economy. In 1988, the Legislature recognized that a locally
driven initiative, in partnership with the State, is the
most effective approach to creating and sustaining a strong
and healthy economy. The Legislature established the ARDOR
Program to create a network of organizations to plan and
support economic development at the regional level.
Representative Morgan noted that there are currently 14
ARDOR's in the State. The work of the ARDOR's consist of:
• Enable local officials and businesses to pool their
limited resources and work together on economic
development issues;
• Develop partnerships among public, private and other
organizations; and
• Provide needed technical assistance via direct links
with local citizens.
Representative Morgan pointed out that the ARDOR Program is
providing a return for the State's investment. The State
provides $620,000 in grants funds for the ARDOR Program and
with those funds, the accomplishments are impressive. The
ARDOR's have used $620,000 dollars in State grant funds to
leverage over $3.6 million dollars in other funds. Board
members participation reflects a local commitment to the
ARDOR Program. The 14 ARDOR boards, each with 10-20
members, constitute 150 plus local, civic-minded individuals
who volunteer their time to achieve a stronger economic base
in their region.
The original intent of the ARDOR Program was to create
regional entities that could improve the local economy and
eliminate region-wide economic development barriers. He
stressed that the ARDOR program is meeting legislative
intent. Representative Morgan concluded, the ARDOR's work
on a wide range of projects that assist individuals and
businesses statewide.
Representative Foster voiced his appreciation for the work
accomplished by the sponsor and the program.
WANETTA AYERS, (TESTIFIED VIA TELECONFERENCE), EXECUTIVE
DIRECTOR, SOUTHWEST ALASKA MUNICIPAL CONFERENCE (SWAMC),
ANCHORAGE, testified in support of the proposed legislation.
She noted that Alaska Regional Development Organization
(ARDOR) funds account for 25% of the total funding for
SWAMC. SWAMC provides educational opportunities for 54
communities through conferences, workshops and other
communications. In FY02, SWAMC was selected by Congress to
administer a $30 million dollar program to mitigate economic
losses to communities, businesses and individuals that were
adversely impacted by federal measures to protect the
stellar sea lions. She urged that the Committee support HB
79.
Representative Hawker pointed out that SWAMC was able to
leverage from $48,000 dollars of State money a total budget
of $211,000 dollars. He applauded the commendable work.
SUE COGSWELL, (TESTIFIED VIA TELECONFERENCE), PRINCE WILLIAM
SOUND ECONOMIC DEVELOPMENT DISTRICT (PWSEDD), ANCHORAGE,
urged passage of the legislation. She commented that her
organization has undertaken many projects such as museums,
fishery projects and scientific undertakings. Ms. Cogswell
urged the Committee's support for passage of the
legislation.
JIM CARTER, (TESTIFIED VIA TELECONFERENCE), DIRECTOR, KENAI
PENINSULA ECONOMIC DEVELOPMENT DISTRICT (KPEDD), KENAI,
spoke to the history of the ARDOR program in the State of
Alaska. Alaska is at a 'stage' where economic development
is essential. KPEED has attempted to support
entrepreneurial development that affects the quality of life
for local residents. Without these investments from the
State, it would be difficult to continue that level of
service. He urged passage of the legislation.
Representative Hawker pointed out the work done by KPEDD,
which successfully leveraged from a $47,000 dollar State
investment, $265,000 dollars of delivered services through
other funding. He commended that success.
CARL BERGER, (TESTIFIED VIA TELECONFERENCE), EXECUTIVE
DIRECTOR, LOWER KUSHKOKWIM ECOMONIC DEVELOPMENT COUNCIL
(LKEDC), BETHEL, voiced support of HB 79. He noted that his
agency exists to provide economic development activity in
Bethel and 26 surrounding villages surrounding that area.
LKEDC has worked in salmon quality management projects.
Additionally, LKEDC has provided 'familiarization' trips for
the travel industry to their region to enhance tourism
business. Mr. Berger urged continued funding of the ARDOR
Program.
Representative Foster voiced his support of the success of
the program run by Mr. Berger.
LOREN GERHARD, POLICY DIRECTOR, SOUTHEAST CONFERENCE,
JUNEAU, requested that the Legislature support continued
funding, especially as the State faces fiscal challenges.
He emphasized that ARDOR's use seed money provided by the
State to build on leveraging approximately five times as
much for business assistance, infrastructure development,
community assistance, and a host of other functions, with a
very low overhead.
Mr. Gerhard pointed out that the reauthorization was
contained in the Governor's Budget, as he supports efforts
to develop local and regional economies. ARDOR's address
the vast diversity of economic challenges and opportunities
in Alaska.
In Southeast, the Southeast Conference focuses on
infrastructure issues, primarily the Alaska Marine Highway
System (AMHS), and a regional electrical intertie. There
are numerous organizations that concentrate on business
development and business assistance, and the Southeast
Conference does not duplicate those efforts. In other
areas, ARDOR's are very involved in business assistance
because the need there is unfilled.
ARDOR's supply a useful resource to the State. ARDOR's are
now tasked by the Governor to apply recommendations to
members regarding the newly formed Alaska Highway Board. It
is useful to have State chartered regional organizations to
help bridge the gap between State bureaucracies and local
communities.
Mr. Gerhard pointed out that many ARDOR's are designated
economic development districts, which lowers match
requirements for communities utilizing Economic Development
Administration funding. Many ARDOR's are also designated
Resource Conservation and Development Councils, a program
that provides them with federal employees of the U.S.D.A.
and resources to pursue targeting of regional projects.
The Southeast Conference ARDOR was instrumental in obtaining
federal authorization for a regional electric intertie with
the help of Senator Frank Murkowski. There is a committee
working on those steps to actually build the next stage of
that project. The seed money made it possible for
soliciting contributions from various communities, State and
federal programs to move the project along.
Mr. Gerhard stated that the ARDOR's help bring people in
remote regions together, where they collectively decide to
pursue a whole range of regional projects. There are over
80 volunteers on 9 committees and subcommittees addressing a
broad range of issues in the region. Without the grant, the
program would be unable to afford the staff, which provides
the value that the membership relies upon.
Mr. Gerhard pointed out that this grant is an important
piece of their budget. The members supply about twice the
amount in dues and other support. Together that money
allows pursuing goals with staff, rent, and teleconferences.
If the ARDOR's were to disappear, millions of dollars of
federal and private grants would no longer flow into the
State.
Representative Hawker voiced his appreciation for the work
done on the shellfish mara-culture activities.
Co-Chair Williams advised that to date, the Governor had not
proposed any budget funding for the ARDOR program or any
program.
Representative Joule pointed out that there is a web site,
which highlights the Alaska Native Arts resulting from ARDOR
funding.
Representative Foster MOVED to report HB 79 out of Committee
with individual recommendations and with the accompanying
fiscal note.
There being NO OBJECTION, it was so ordered.
HB 79 was reported out of Committee with a "do pass"
recommendation and with a new fiscal note by Department of
Community & Economic Development.
HOUSE BILL NO. 100
An Act making supplemental and other appropriations;
amending appropriations; and providing for an effective
date.
HOUSE BILL NO. 110
An Act making supplemental and other appropriations;
amending appropriations; making appropriations to
capitalize funds; and providing for an effective date.
CHERYL FRASCA, DIRECTOR, DIVISION OF MANAGEMENT & BUDGET,
OFFICE OF THE GOVERNOR, provided 'general comments'
regarding proposed supplemental package.
Co-Chair Williams advised that those bills would not be
moved from Committee today.
Ms. Frasca emphasized that all requests had been
scrutinized. She listed criteria used to determine each
request. The total supplemental request is in the amount of
$63.3 million dollars of which, $9 million needs to be "fast
tracked".
Ms. Frasca highlighted the reasons for supplemental growth:
· Caseload growth with a net cost of $15 million dollars.
She noted that savings in the K-12 foundation formula
had covered some of the caseload growth. There was also
increased tobacco tax proceeds providing for a $13
million dollar savings;
· Disasters and fire suppression requests amounts to $31
million dollars;
· Short-funded programs in the amount of $7 million
dollars; and
· The balance of $11 million dollars will be used for
"other" kinds of requests.
Representative Whitaker inquired why "fair share" had not
been included in the supplemental request.
Ms. Frasca understood that was a 'permitted' program under
federal regulations. Their denial of the plan is currently
on appeal through the administrative agency, with a hearing
scheduled next month. If that process is not successful,
th
then the State will appeal it in the 9 Court circuit. The
process could take a couple years. She advised that it
would be 'premature' to replace those general funds.
Representative Whitaker inquired if the $55 million dollars
had been paid out.
Ms. Frasca clarified that in the 'accounting world', it is
booked as "income receivable". The Administration is acting
as if those funds will be received. She understood that the
funds would be spent throughout the fiscal year.
Representative Joule mentioned the 'erosion issue'. He
offered to provide information regarding that concern by
Monday, February 24th.
Representative Foster voiced his appreciation for the
supplemental recommendations of restoration of highway
maintenance cuts, which had previously been made.
Ms. Frasca responded that originally, that amount had been
estimated at $3.1 million dollars. The Department 'shaved'
that number off by $500,000 dollars; additionally, there has
not been a lot of snow this year throughout the State. She
noted there continues to be further savings potential.
Co-Chair Williams commented that Co-Chair Harris' office
would provide a committee substitute for this legislation
early next week.
Co-Chair Williams stated that HB 100 and HB 110 would be
HELD in Committee for further consideration.
HOUSE BILL NO. 9
An Act relating to the registration of individuals who
perform home inspections; relating to regulation of
contractors; relating to registration fees for
specialty contractors, home inspectors, and associate
home inspectors; relating to home inspection
requirements for residential loans purchased or
approved by the Alaska Housing Finance Corporation;
relating to civil actions by and against home
inspectors and to civil actions arising from
residential unit inspections; and providing for an
effective date.
Vice-Chair Meyer MOVED to ADOPT the committee substitute,
#23-LS0029, Lauterbach, 2/19/03, as the version of the bill
before the Committee. There being NO OBJECTION, the
committee substitute was adopted.
REPRESENTATIVE NORM ROKEBERG outlined the changes made to
the committee substitute.
· Page 1, Line 6: Added language to the title reflecting
the repeal in Section 41 of the bill.
· Page 5, Line 27 & Page 6, Line 8: Added a requirement
that the home inspector put his registration number on
the pre-inspection contract, as well as the final
report.
· Page 10, Lines 12 & 13: Included exception to the
statute of limitations for intentional acts or gross
negligence by the home inspector.
TAPE HFC 03 - 22, Side B
Representative Rokeberg continued highlighting the changes
made to the committee substitute.
· Page 10, Line 15: Rewrote subsection © to be in the
affirmative. Only a party to the real estate
transaction, or someone who received written permission
to use the home inspection report could sue the home
inspector.
Representative Whitaker referenced Page 10(C), #2, and asked
if he should assume that would be the attorney for the
person who is a party to the transaction.
Representative Rokeberg explained that the provisions of the
bill assume that anyone that has the report must have a
written consent of the person that paid for it. There has
been a problem with the reports being 'passed' around to
various people. It is conceivable that the manner in which
the legislation is drafted, the report could be in
possession of that person and it would be 'legal'.
Subsequently, that is under appeal.
Representative Stoltze distributed a document, which had
been submitted by one of his constituents. (Copy on File).
Representative Joule referenced the letter in member's
packets from Husky Enterprises. (Copy on File). He noted
the statements on Page 2, indicating that the legislation
would drive the cost of home inspections up in rural Alaska.
Mr. Huss noted that construction in Anchorage, Fairbanks and
Juneau and other large cities would not be affected by the
legislation, as the municipal inspectors are 'exempt' from
licensing. He indicated that the legislation would only
target new construction in rural Alaska.
Representative Rokeberg advised that it was not his intent
to create higher costs for inspections; that process was
accomplished by not providing a board. He noted that the
costs of a bond would be $5,000 dollars. Representative
Rokeberg indicated that it is not inappropriate to add
inspectors to the contractor's licensure. The actual
licensure would cost $125 dollars per year. He added that
regarding the issue of continuing education, the bill does
provide the Division of Occupational Licensing draft
regulations as a form of communication. The bill is not
intended to avoid those costs and that the level of costs
for the licensure is small.
Representative Rokeberg addressed concerns with focusing.
It is true that local building code is enforced by the
building officials, however, are not enforced in all areas
of the State. The point is that the bill does exempt local
inspectors under municipal licensure. He pointed out that
Alaska Housing Finance Corporation (AHFC) has supported the
bill since inception.
Representative Joule reiterated concerns voiced by Mr. Huss
of Husky Enterprises, noting how the legislation could
'drive' rural inspectors out of business. Should that
scenario happen, village areas would be faced with bringing
inspectors in from Anchorage to perform the inspections,
which would incur additional costs.
Vice-Chair Meyer asked if the costs to the State would be
recouped through the fees paid by the homebuilders.
Representative Rokeberg agreed and reiterated that there
would be no impact on the general fund.
Representative Foster MOVED to ADOPT Amendment #1. (Copy on
File). The amendment would delete "homebuilders" on Page 7,
Line 7, and insert "home building". Representative
Rokeberg acknowledged that the change was minimal.
There being NO OBJECTION, it was adopted.
Representative Foster MOVED to report CS HB 9 (FIN) out of
Committee with individual recommendations and with the
accompanying fiscal notes.
There being NO OBJECTION, it was so ordered.
CS HB 9 (FIN) was reported out of Committee with a "do pass"
recommendation and with zero fiscal note #1 by the
Department of Revenue, zero fiscal note #2 by the Department
of Law, zero fiscal note #3 by the Department of Labor &
Workforce Development, and fiscal note #4 by the Department
of Community & Economic Development.
HOUSE BILL NO. 101
An Act making a special appropriation for a grant to
Arctic Power to promote the opening of the Arctic
National Wildlife Refuge for oil and gas exploration
and development; and providing for an effective date.
TOM WRIGHT, HOUSE FINANCE STAFF, REPRESENTATIVE JOHN HARRIS,
stated that HB 101 would appropriate $3 million dollars in
general funds to Arctic Power to use in its campaign to
secure necessary support in the U.S. Senate to pass
legislation opening Arctic National Wildlife Refuge (ANWR)
for oil exploration. The Budget Reconciliation bill will be
considered early in the Congressional session. He commented
that it is important that Arctic Power be active in its
promotion of opening ANWR throughout the early part of 2003.
Mr. Wright noted that HB 101 would also appropriate $100,000
in general fund dollars to the native village of Kaktovik
for their community outreach effort to gain support for the
opening of ANWR from Congressional members in Washington,
D.C.
He added that Alaska's Congressional delegation believes
that they may have the support to pass ANWR language this
year. The educational efforts provided by Arctic Power
could very well tip the scales in Alaska's favor whenever
that vote reaches the Senate floor. With the long-term
decrease in State revenue from existing fields, it is
imperative that Alaska develops additional new fields in the
future. ANWR is an important part of our fiscal future.
Representative Foster inquired how many years had the
Legislature been attempting to achieve the opening of ANWR.
Mr. Wright responded that it has been nine to ten years in
the making.
MIKE NAVARRE, (TESTIFIED VIA TELECONFERENCE), ARCTIC POWER
BOARD, REPRESENTING SELF, KENAI, encouraged the Committee to
support the proposed legislation and ongoing funding for
Arctic Power. He noted that he had lobbied for opening the
fields of ANWR for many years and that area has the highest
discovery potential in North America. He claimed that
opening ANWR would provide the State of Alaska the
opportunity, which will pay investments and great returns.
SALLY ANN CAREY, (TESTIFIED VIA TELECONFERENCE), MEMBER OF
ARCTIC POWER, HEALTH, SAFETY AND ENVIRONMENTAL TRAINING
CONSULTANTS, ANCHORAGE, discussed that $3 million dollars
was a small investment for the return that it would bring
into Alaska. Opening ANWR would extend Alaskan careers,
production, and sales of local product, services and funding
for our State. She encouraged that funding Arctic Power
would be a prudent decision.
MARY SHIELDS, (TESTIFIED VIA TELECONFERENCE), GENERAL
MANAGER, NORTHWEST TECHNICAL SERVICES, ANCHORAGE, spoke in
support of the proposed legislation. She emphasized that
the future is now and that it is time to open the Arctic.
She encouraged the Legislature's support of passage of the
st
bill with an effective date of January 1.
BRAD SNOW, (TESTIFIED VIA TELECONFERENCE), SELF-TOUR GUIDE,
FAIRBANKS, testified in opposition to HB 101. He noted that
he opposed providing funds to an organization that directly
threatens his livelihood. He claimed that through support
of the proposed legislation, the State would undermine the
infrastructure of the tourism industry.
DEB MOORE, (TESTIFIED VIA TELECONFERENCE), ARCTIC
COORDINATOR, NORTHERN ALASKA ENVIRONMENTAL CENTER,
FAIRBANKS, spoke in opposition to HB 101. She expressed
concern for the non-representation of environmental groups
during the process. She stressed that Arctic Power is a
special interest group whose sole purpose is to lobby the
opening of ANWR. She claimed that it is inappropriate to be
using State money for a special interest group considering
that 1/3 of the State's population opposes the drilling.
Ms. Moore criticized supporting private industry with State
resources, especially in times of financial constraints.
State money should be spent for things that are in the
interest of all Alaskans and serve the public at large and
not just the oil industry and their allies. She proposed
that industry fund the opening of ANWR. Ms. Moore urged the
Committee to oppose HB 101.
LUCI BEACH, (TESTIFIED VIA TELECONFERENCE), GWITCH STEERING
COMMITTEE, FAIRBANKS, testified in opposition to the bill.
She discussed the sacred significance of these lands to her
culture and her people. Ms. Beach voiced concern that while
the State budget was being heavily cut, the Legislature was
considering funding a private endeavor. She stressed the
closure of schools in rural areas, as well as agency cuts.
Ms. Beach stressed that the oil companies should bear the
financial burden of such an endeavor.
GINNY WOOD, (TESTIFIED VIA TELECONFERENCE), FAIRBANKS,
testified in opposition the bill. She noted historical
examples of economic gains, which claimed to develop Artic
resources. She maintained that the present plan is not
accountable and that the economic feasibility is dubious.
She expressed concern over what she termed a great deal of
misinformation regarding the amount of oil available in
Arctic area. She urged that the Committee not pass the bill
from Committee.
JIM SYKES, (TESTIFIED VIA TELECONFERENCE), FOUNDER, OIL
WATCH-ALASKA, MAT-SU, urged that the Committee veto HB 101.
The millions of dollars already given to Arctic Power have
produced nothing to date. He urged that there be an audit
on the use of State funds.
Mr. Sykes noted that British Petroleum (BP) has pulled out
of Arctic Power. He claimed that Arctic Refuge oil would
mean a cut of 40% in royalties to the State. The State
'must' focus on the development of State lands as a
priority. The State cannot afford to throw "good money
after bad", when the State needs public education and public
safety. He mentioned the "windfall profit tax" and how much
that tax would have generated for the State had it been in
place. He reiterated that Arctic Power should be audited.
KIMBERLY DUKE, EXECUTIVE DIRECTOR, ARCTIC POWER, ANCHORAGE,
clarified that Arctic Power has been working with the
Congressional delegation, the Governor and the Legislature
for opening ANWR. She stressed that there have been
considerable successes along the way and that with the
support of the President, circumstances have never been
better. Ms. Duke claimed that investing in Arctic Power has
always been an investment of Alaska's future. Oil and gas
development is the 'bread and butter' of Alaska's State
budget and funds 80% of the overall budget. She stressed
that it would be a wise investment for Alaska.
The U.S. Geological Survey has placed a conservative
estimate of 10 billion barrels of oil in the ANWR area. She
stated that would be equal to the amount recovered from the
Prudoe Bay field. That level of production would double the
level of production in the pipeline right now bringing it
back to capacity of 2 million barrels per day.
Ms. Duke reminded members that the land is federal land and
that the State will receive 50% in royalties. In current
legislation, that would amount to $1.5 billion dollars in
royalties for the State of Alaska.
She noted that U.S. Senator Stevens has indicated that when
the refuge was expanded in 1980, his 'compromise deal' was
to keep the coastal plain area open for oil and gas
exploration. The Department of Interior approved that and
recommended exploration in 1987. Opening ANWR will provide
jobs and increase domestic production.
Ms. Duke stressed that Arctic Power has been working on the
issue for 10 years. She noted that by the end of 2002,
there were 20 votes through Congress through various
committees and on the floor. President Clinton vetoed the
legislation in 1995. In 2001, the House passed legislation
and it was vetoed and did not move past that body until
2002. She noted that political considerations have changed
dramatically since that time.
Ms. Duke commented on the 'open book' policy of grant
funding done by Arctic Power, noting that their money is
audited.
Representative Stoltze asked if during the process if there
had been any efforts to preclude certain areas from
drilling.
Ms. Duke responded that there had been a number of attempts
to preclude certain areas and there have been a number of
bills regularly filed to open areas. The coastal plain area
is outside the designated wilderness of the Arctic Refuge.
Out of 19 million acres, there are 8 million acres of
designated refuge, which would include the Brooks Range
where a lot of the tourist activities take place.
Representative Stoltze asked for a composition of groups
involved with Arctic Power.
Ms. Duke advised that Arctic Power is a non-profit
organization, '501 C6', and is operated by a Board of
Directors. Arctic Power has been in existence for ten years
and it is a "grass roots organization" representing the
State of Alaska in Congress in this 'battle'. She claimed
that Arctic Power has approximately 75% support in the
State.
BARBARA HUF TUCKNESS, DIRECTOR OF LEGISLATIVE & GOVERNMENTAL
AFFAIRS, LOCAL 959, JUNEAU, spoke on record in support of HB
101. She noted that Arctic Power is an excellent resource
for educating the Alaskan people. Ms. Huff Tuckness noted
that many members in the Union are or have been employed on
the North Slope.
TAPE HFC 03 - 23, Side A
Ms. Huff Tuckness identified job opportunities that the
State can look forward to with development. She urged that
the State look at what can proactively be done, as those
resources are needed for the long term. Ms. Huff Tuckness
strongly recommended that the members support and move from
Committee, HB 101.
Representative Stoltze commented that past Legislature's had
gone on record supporting the legislation encouraging local
hire and fair share. He asked if oil companies would have
the same commitment for lobbying for concerns for the State
of Alaska.
Ms. Huff Tuckness believed that they would.
Representative Stoltze reiterated, asking if the oil
companies would be attentive to local hire and those other
provisions. He pointed out that the Legislature does not
have the same interests as the oil companies and voiced
concern that they take care of the local hire issues.
Ms. Huff Tuckness explained that from a Legislative
perspective, there are many issues of concern. The
Legislature must move forward to guarantee that all the
issues are identified.
MATT DAVIDSON, ALASKA CONSERVATION ALLIANCE (ACA) ADVOCATE
FOR THE ALASKA CONSERVATION VOTERS, JUNEAU, requested that
the bill be reconsidered. He noted that the Alaska
Conservation Alliance (ACA) and Alaska Conservation Voters
are sister nonprofit organizations dedicated to protecting
Alaska's environment through public education and advocacy.
The 44 member organizations and businesses represent over
35,000 registered Alaskan voters. As many Alaskans, the
members want to be assured that the State's limited general
funds are being put to the best uses. The State has given
Arctic Power $7.5 million dollars over the past 10 years.
Witnessing State agencies and other entities being cut back.
Mr. Davidson interjected that before appropriating $3.1
million dollars to Arctic Power, legislators should seek
answers to these questions:
• Ask is this a responsible way to handle the
budget gap with the limited funding for basic
protection of fish habitat and clean water. He
asked why should the State dump millions of
dollars into the Arctic Power black hole.
• Ask where has the money gone. In the last two
years, Arctic Power has received almost $5
million dollars from the State of Alaska with
nothing to show. The reports regarding Arctic
Power indicate that they 'bankroll high-priced'
lobby firms in Washington D.C.
• Ask why should Alaskans pay for an effort that
benefits multinational oil companies.
• Ask how does the Legislature plan to hold Arctic
Power accountable for those general funds
appropriated.
Mr. Davidson concluded that the money under consideration
for Arctic Power's use is funding that would not be
available to address statewide needs. Essentially, all
Alaskans are being asked to help finance the oil industry's
lobbying efforts and in return, it is reasonable for full,
public disclosure of how they spend that money. He
encouraged members of the House Finance Committee to ask for
that information before authorizing any additional funds.
Co-Chair Williams stated that HB 101 would be HELD in
Committee for further consideration.
ADJOURNMENT
The meeting was adjourned at 3:32 P.M.
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