SENATE CS FOR CS FOR HOUSE BILL NO. 96(STA) "An Act relating to acquisition and development of the Jesse Lee Home; and providing for an effective date." This was the first hearing for this bill in the Senate Finance Committee. REPRESENTATIVE KEN LANCASTER, sponsor of the bill, addressed the fiscal note, stating that during testimony in other committees, he had understood the amount should have been zero. However, the Department of Natural Resources had recently submitted a new fiscal note for $65,000. He stressed that if there must be a fiscal note, the amount should be no higher than $55,000. Co-Chair Kelly injected he had the same understanding that the fiscal note should be zero. Representative Lancaster gave a history of the Jesse Lee Home, which was established in Seward in 1926 to house Alaskan Native children who lost their parents during a tuberculosis epidemic. He pointed out that Benny Benson designed the Alaska State Flag while living at the Home and the flag was officially raised for the first time at the Home on July 9, 1927. Representative Lancaster informed that the Home was severely damaged during the 1964 Earthquake and has been vacant ever since. He stated that a private party purchased the facility with the intention of opening a hotel, but the Kenai Peninsula Borough foreclosed on the property to satisfy a tax obligation. He noted the City of Seward has since acquired the property from the Borough. Representative Lancaster stated the City of Seward has cleared the area of overgrowth and erected a fence securing the Home. He remarked that $5,000 from the Department of Natural Resources and $5,000 from the City of Seward had been appropriated and expended to undertake initial soil testing. Representative Lancaster informed if this bill passes, the intent is to hire an architect to inspect the building to determine whether it could be saved. If the building could not be saved, he said, a volunteer task force would be organized to consider other options for creating a historical site at the location. Amendment #1: This amendment replaces "2002" with "2003" on page 2, line 8 of the Senate State Affairs committee substitute. The amended language reads, "The department shall report to the governor and the legislature by November 1, 2003, concerning its recommendations…" This amendment also changes the effective date of the bill from July 1, 2001, to July 1, 2002. Senator Ward moved for adoption and explained this is a technical amendment to update the bill because it did not pass into law the previous year. There was no objection and the amendment was ADOPTED. Senator Green voiced concerns regarding an unrelated report presented by a task force established to write regulations. She relayed that in this instance, the legislature was not given notice of the actual regulations and it was asserted that because the legislature authorized the creation of the task force, it was assumed the legislature gave automatic approval of the forthcoming regulations as well. She wanted assurance this situation would not arise in regards to the task force proposed in this bill. Representative Lancaster remarked for the record that this legislation only establishes the task force to review the architectural and soil surveys to determine possible future uses of the site. He assured that because the property is owned by the City of Seward, future legislation would be necessary to authorize additional state expenditures. Senator Hoffman asked what is the next step if the report determines the facility is sound. Representative Lancaster replied further grant funds would be pursued. He noted there are no windows remaining in the Home and that numerous other repairs are necessary. JUDY BITTNER, State Historic Preservation Officer, and Chief, Office of History and Archaeology Alaska Historical Commission, Division of Parks and Outdoor Recreation, Department of Natural Resources, spoke to the fiscal note. She informed that the Office receives federal historic preservation grant funds, and it is intended a portion of these funds would be used to partially fund the task force. She noted the Office awarded a $5000 grant to the City of Seward to begin the soil and building studies. She said an additional $30,000 could be appropriated if $25,000 in matching funds were provided. She pointed out the Office is "project funded" and the federal grants utilized require matching funds. Co-Chair Kelly stated the Committee was under the impression that the necessary matching funds were already available within the Department's budget. Ms. Bittner responded match funds were not available for the task force itself. Co-Chair Kelly referenced the $35,000 GF Match and $30,000 general funds contained in the fiscal note. He surmised the $30,000 amount should not be included. Ms. Bittner affirmed. Co-Chair Kelly clarified the total amount of the fiscal note should actually be $35,000. Ms. Bittner affirmed. Co-Chair Donley asked why the federal funds were not listed in the fiscal note. Co-Chair Kelly stated this would be corrected. Representative Lancaster affirmed. Co-Chair Donley listed the travel, per diem, meeting space and meeting preparation expenses involved in the four meetings of the proposed commission at a cost of $4,500 each. He noted the legislation does not stipulate that a commission would be formed. He suggested Seward residents could undertake the efforts with no travel required. Co-Chair Kelly requested the witness comment. Ms. Bittner replied the intent is to form a task force comprised primarily of Seward residents, with meetings held in Seward. However, she continued, the intent is that professionals would need to travel from elsewhere in the state to provide expertise. Co-Chair Donley pointed out the fiscal note indicates an architect consultant would be hired at a cost of $70,000. Co-Chair Kelly announced the bill would be held to rectify the fiscal note concerns. Co-Chair Donley next referred to Section 2 of the Senate State Affairs committee substitute, and asked if an architectural assessment was currently available that determined the building is structurally sound and could be restored. Representative Lancaster answered such a report was completed in 1995 when the building was placed on the National Registry of Historic Places. He said this report must be updated. Co-Chair Donley commented the language is drafted with the assumption that the facility is restorable. He suggested it could be determined the structure should be rebuilt instead. Representative Lancaster said the intent is to repair the facility if possible, but an inspection is necessary before such a decision could be made. Senator Ward added that there is a possibility that the building would be removed and replaced with a monument. He shared he has visited the location and did not think the structure was sound, although it does have historical significance and has "affected a lot of people's lives." He opined $70,000 "is a lot of money for something that seems fairly obvious to me." He also questioned the placement of a statute of Benny Benson in a congested area of Anchorage, and asserted most people are unaware of its existence. He suggested relocating the statue to the Jessie Lee Home site. He talked of the historical and cultural importance of the Seward location. Co-Chair Kelly referenced explanatory language in the fiscal note "An Architectural consultant will be secured. Anticipated cost for the architectural consultant is $70,000, of which half is covered by an existing historic preservation grant program, so only half the match is requested here." He ascertained the match requirement should therefore be reduced to $25,000 based on this and the matching funds provided by the City of Seward. He also questioned how the meeting expenses are calculated into the total request. Senator Green was unsure if similar historical preservation projects had been undertaken in the past using state funds. She remarked there are other historical locations in the Palmer area that "we would love to have…added" to the National Registry of Historic Places. She surmised there are many more such locations in throughout the state. She was concerned that that this legislation could start a trend for state funding. Co-Chair Kelly commented that other historical sites have been addressed in the past although they generally do not receive much attention because the funding is appropriated through the capital budget process as opposed to individual legislation. SCOTT JANKE, Manager, City of Seward, testified via teleconference from Seward to inform that the Seward City Council and the Historic Preservation Commission have each adopted resolutions in support of the bill. He elaborated on the efforts taken by the City of Seward in this process to acquire the property and secure it to reduce liability. He detailed how $50,000 was expended for such projects as boarding windows and erecting a fence. He spoke of media attention given to the Jesse Lee Home, both in Alaska and Outside, as a result of these efforts. He stressed, "this is a significant historic resource for the state, not just for Seward." He expressed the rehabilitation cost is too large for the City of Seward to cover in its entirety. RACHEL JAMES, Planner, Planning and Zoning Commission, City of Seward, and Staff, Historical Preservation Commission, City of Seward, testified via teleconference from Seward about the timing th of passage of this legislation to coincide the 75 anniversary of the design and first official raising of the Alaska flag at the Jesse Lee Home site. She also noted the City of Seward would be celebrating the centennial of the community in the year 2003. She asserted it is important for the state to take a "leading role" in this project because the Home played an important role in the state's history. TIM ROGERS, Member, Board of Directors, Alaska Children's Services, testified via teleconference from Anchorage about the 112-year history of the Alaska Children's Services beginning with the establishment of the Jesse Lee Home in Unalaska. He spoke of services offered for troubled children, originally focusing on orphaned children. He stated that in 1925, the Home was relocated to Seward, where it operated as an orphanage until the Good Friday Earthquake of 1964, at which time the facility was moved to its current location on Abbott Road in Anchorage. He stressed the Seward site has significant historical value to the organization as well as the state. He stated that during its operation in Seward "literally hundreds of children" from all areas of Alaska, lived at the Home. Co-Chair Kelly ordered the bill HELD in Committee.