10:48:26 AM SENATE BILL NO. 147 "An Act providing for a sport fishing facility surcharge on sport fishing licenses; providing for the construction and renovation of state sport fishing facilities and for other projects beneficial to the sport fish resources of the state as a public enterprise; and authorizing the issuance of revenue bonds to finance those projects." This was the second hearing for this bill in the Senate Finance Committee. 10:48:42 AM SENATOR RALPH SEEKINS reminded the Committee of questions raised at the previous hearing regarding the proposed method of bonding is legal. In discussion with the Department of Law, he learned it would be legal as it is similar to the Alaska international airport fund. This legislation would not establish a dedicated fund and the Department of Fish and Game would continue to have an obligation to repay the debt regardless of revenue generated to the fund. 10:49:48 AM Senator Seekins reported that four tenths of one percent of people who purchase Alaska sport fishing licenses resides in Western Alaska. Therefore, while residents of this area may receive the benefits of this legislation, most would not pay for it. 10:50:21 AM Senator Seekins furthered that Senator Stedman had asked the percentage of licenses purchased in Southeastern Alaska. The amount is approximately 25 percent, but primarily is comprised of nonresident licenses. Residents of Southcentral Alaska purchase the majority of resident sport fishing licenses, and Interior Alaska residents purchase about ten percent of the licenses issued. 10:51:19 AM Senator Seekins told of discussions he had with Senator Stedman and he agreed that funding a source other than increased license fees would be preferred for the construction of hatchery facilities. However, "we are behind the curve" in development of such hatchery fisheries and the biomass reduction must be addressed soon as demand continues to increase. 10:52:05 AM Co-Chair Green relayed her discussions with Senator Stedman about other potential needs identified during the term of this license surcharge and the potential difficulty in increasing the fee amount to fund those non-bonded, yet essential activities. She asked the sponsor's opinion. 10:53:00 AM Senator Seekins was unable to ascertain what needs would be more important that the hatchery project. 10:53:08 AM Co-Chair Green spoke to the "natural evolution" of fee increases. Although this surcharge is nominal, she expressed concern about the ability to impose future increases to meet certain needs. 10:53:29 AM Senator Seekins reiterated that he was unable to predict what future needs could arise. The proposed license fees would be less than those levied for resident sport fishing licenses in the states of Idaho, Utah and others. Currently Alaska fees are average compared nationally, and with the passage of this legislation, would be in the higher one-third. The Department of Fish and Game anticipates increased income from other sources, which would offset the operational charges of the hatchery operations. He predicted that if an emergency arose and was justified, anglers would be willing to pay increased license fees. His objective is that those who purchase licenses would be able to "take fish home". 10:55:31 AM Senator Hoffman asked the operating costs of the hatchery program. 10:55:42 AM Senator Seekins deferred to the Department of Fish and Game. 10:56:03 AM GORDEN GARCIA, Department of Fish and Game, estimated that the current annual operating costs of $2 million would increase by $700,000 to $1 million. Production would increase 60 percent. 10:56:50 AM Senator Seekins indicated he had a proposed amendment to require that the commissioner of the Department of Fish and Game to transfer any unexpended and unobligated bond proceed to the redemption fund to pay the outstanding principal owing on the bonds. In addition, the commissioner shall terminate the surcharge "at the first day of the year" following payment of the debt. The intent is to ensure that the surcharge is not levied for any purpose other than for this project. 10:57:53 AM Co-Chair Green asked the number of years in which the bond debt would be paid. 10:58:00 AM Senator Seekins answered 20 years. 10:58:24 AM Co-Chair Green pointed out this provision would assure that the surcharge would terminate and not become an ongoing funding source for future projects. 10:58:35 AM Senator Seekins agreed assured this was his intent. 10:58:56 AM Senator Stedman commented that he had not been aware of the demand on sport fish stocks in the Interior. 11:00:45 AM Senator Olson suggested that additional vendors should be established in rural areas of the state to sell licenses. He spoke to the difficulty in purchasing licenses in rural communities. 11:01:00 AM Amendment #1: This amendment inserts language to AS 16.05.130(f) added by Section 2 of the bill on page 2, line 22, to read as follows Upon completion of the purposes for which the bonds are issued, the commission shall transfer any unexpended and unobligated bond proceeds to the redemption fund to pay outstanding principal, interest, or redemption premium, if any, owing on the bonds. This amendment also deletes language and inserts language to AS 16.05.340(j) added by Section 4 of the bill on page 3, lines 11 - 14. The inserted language reads as follows. The authority of the department to collect the surcharge under this subsection terminates on December 31 of the calendar year in which the principal amount of the bonds issued under AS 37.15.765 through 34.15.799, together with the interest on them and any interest owing on unpaid installments of interest, and all other obligations with respect to the bonds, are fully met and discharged. This amendment also adds a new bill section on page 9, following line 21 to read as follows. Sec. 6. The uncodified law of the State of Alaska is amended by adding a new section to read: DUTY OF COMMISSIONER TO NOTIFY AND REVISOR'S INSTRUCTIONS. (a) The commissioner of revenue shall notify the lieutenant governor and the reviser of statutes of the date that the principal amount of the bonds issued under AS 37.15.765 through 34.15.799, enacted by sec. 5 of this Act, together with the interest on them and any interest owing on unpaid installments of interest, and all other obligations with respect to the bonds, are fully met and discharged. (b) The reviser of statutes shall replace the pertinent text of AS 16.05.340(j), enacted by sec. 4 of this Act, with the calendar year of the date provided by (a) off this section. Co-Chair Wilken moved for adoption. Co-Chair Green noted Senator Seekins gave an explanation of this amendment. There was no objection and the amendment was ADOPTED. Co-Chair Green pointed out this legislation does not indicate any increased expenses for the Department of Fish and Game. 11:02:10 AM Senator Seekins replied that any increased operating expenses would be in future years. 11:02:15 AM Co-Chair Green asked the number of years before the increased expenses would be incurred. 11:02:18 AM Senator Seekins stated the project would be scheduled for completion in 2007 or 2008. AT EASE 11:02:38 AM / 11:03:02 AM 11:03:05 AM Co-Chair Green concluded that if the project were not completed until the year 2008, a fiscal note is not necessary at this time to reflect the increased operating costs. 11:03:21 AM Co-Chair Wilken offered a motion to report the bill, as amended from Committee with individual recommendations and accompanying fiscal notes. Without objection CS SB 147 (FIN) MOVED from Committee with fiscal note #1 for $1,398,600 from the Department of Revenue and fiscal note #2 for $1,553,400 from the Department of Fish and Game.