HOUSE BILL NO. 370                                                             
                                                                               
"An Act making an appropriation for relief of the 1997                         
fishery disaster in Bristol Bay and on the Kuskokwim                           
River; and providing for an effective date."                                   
                                                                               
Co-Chair Hanley provided members with a proposed committee                     
substitute for HB 370, Work Draft 0-LS139\F, dated 3/4/98                      
(copy on file).  He clarified that the proposed committee                      
substitute identifies the same regions and funding amounts                     
as contained in the original version.  He added that the                       
breakout of loans and community block grants are the same.                     
                                                                               
FRED SMITH, ASSOCIATION OF VILLAGE COUNCIL PRESIDENTS,                         
BETHEL testified via teleconference in support of HB 370.                      
He noted that the legislation includes areas that were not                     
in the Governor's original declaration area and provides a                     
full state obligation for the federal funds.  He spoke                         
against changes to the legislation that would delay its                        
passage.                                                                       
                                                                               
CHRIS HLADICK, CITY MANAGER, DILLINGHAM testified via                          
teleconference in support of HB 370.  He noted that projects                   
would be fisheries related and would focus on getting as                       
many people to work as possible.  He stressed that the money                   
would not go into the general fund to pay for general                          
services.                                                                      
                                                                               
DEBRA TENNYSON, DEPARTMENT OF COMMUNITY AND REGIONAL                           
AFFAIRS, ANCHORAGE testified via teleconference.  She gave                     
examples of proposed projects.  Projects would include                         
repairs to existing buildings, dock and harbor projects,                       
road and trail work, landfill maintenance, and boat ramps.                     
She clarified that grants would not be limited to fishermen.                   
She emphasized that most of the communities are small and                      
the majority of the population in these communities is                         
involved in fishing activities.                                                
                                                                               
Co-Chair Hanley expressed frustration with federal                             
guidelines.  He observed that economic relief is indirect.                     
He noted that, although communities will benefit, it is                        
unlikely that future economic disasters will be reduced due                    
to the funding.                                                                
                                                                               
Representative Foster MOVED to ADOPT Work Draft 0-LS139\F,                     
dated 3/4/98.  There being NO OBJECTION, it was so ordered.                    
                                                                               
Co-Chair Hanley reviewed changes made by the committee                         
substitute.  He observed that the total funds are the same.                    
The loan funds were separated from the community grants.  He                   
noted that the Department of Community and Regional Affairs                    
did not have the legal authority to provide loans.  Loans                      
would be appropriated through the Disaster Relief Fund.  The                   
Commercial Fishing and Revolving Loan Fund (CFRL) would be                     
used to match federal funds instead of general funds.  The                     
(CFRL) has a surplus of $3 million dollars.  The money will                    
be repaid.  The only cost would be the loss of interest.                       
                                                                               
DAN SPENCER, CHIEF BUDGET ANALYST, OFFICE OF MANAGEMENT AND                    
BUDGET, OFFICE OF THE GOVERNOR stated that the                                 
Administration is still checking on the funding source                         
change.  Co-Chair Hanley observed that the match and the                       
money would be split at the same rate.                                         
                                                                               
HB 370 was HELD in Committee for further consideration.