HOUSE FINANCE COMMITTEE April 27, 1998 1:50 P.M. TAPE HFC 98 - 127, Side 1. TAPE HFC 98 - 127, Side 2. TAPE HFC 98 - 128, Side 1. TAPE HFC 98 - 128, Side 2. CALL TO ORDER Co-Chair Therriault called the House Finance Committee meeting to order at 1:50 P.M. PRESENT Co-Chair Therriault Representative Kohring Representative J. Davies Representative Martin Representative G. Davis Representative Grussendorf Representative Foster Representative Mulder Representative Moses and Hanley were not present for the meeting. ALSO PRESENT Senator Bert Sharp; Dick Bishop, Vice President, Alaska Outdoor Council, Juneau; Kevin Brooks, Director, Division of Administrative Services, Department of Fish and Game; Thomas Bringham, Director, Division of Statewide Planning, Department of Transportation and Public Facilities; Jack Kreinheder, Senior Policy Analyst, Office of Management and Budget, Office of the Governor; Wayne Regelin, Director, Division of Wildlife Conservation, Department of Fish and Game; Henry Springer, (Testified via Teleconference), Director, Association of General Contractors, Anchorage; John Scoen, (Testified via Teleconference), Director, Office of Audubon Society, Anchorage; Marco Pignalberi, Staff, Representative John Cowdery; Kevin Saxby, (Testified via Teleconference), Assistant Attorney General, Department of Law, Anchorage. SUMMARY HB 227 An Act relating to the Alaska Capital Improvement Project Authority; relating to the powers and duties of the Department of Transportation and Public Facilities; and providing for an effective date. HB 227 was HELD in Committee for further consideration. SB 250 An Act relating to management of game and to the duties of the commissioner of fish and game. HCS CSSB 250 (FIN) was reported out of Committee with a "do pass" recommendation and with a fiscal note by the Department of Fish and Game. SENATE BILL NO. 250 "An Act relating to management of game and to the duties of the commissioner of fish and game." Representative Kelly MOVED that work draft #0-LS1352\L, Utermohle, 4/23/98, be the version before the Committee. Co-Chair Therriault noted that the only change was on Page 3, adding the definition of "sustained yield". There being NO OBJECTION, the work draft was adopted. SENATOR BERT SHARP spoke to the proposed legislation. He noted that in 1994, the Legislature passed SB 77, implementing intensive game management. Since that time, the Department of Fish and Game and the Board of Game have had difficulty interpreting and implementing the legislation. He pointed out that SB 250 narrows down and defines legislative findings that provide for high levels of harvest for human consumption, consistent with the sustained yield principle. It further states that big game prey populations should be managed biologically. That would be accomplished by amending AS 16.05.255(g) and adding a new definition for sustained yield. The Board of Game is further instructed to establish harvest goal and seasons for managing big game prey populations in order to achieve a high level of human harvest. To further assist the Board and the Department, the bill contains definitions of harvestable surplus and high levels of human harvest. These terms exist in law and need clearer definition. Senator Sharp advised that the Board of Game had definitions proposed for the categories on their agenda at the January meeting in Bethel and then again at the March meeting in Fairbanks without coming to a conclusion. The Department as well as the Board agrees that there is a need for definitions in this area. Senator Sharp noted that the committee substitute is a product of working closely with the game users and the Department. He urged the Committee's support. KEVIN SAXBY, (TESTIFIED VIA TELECONFERENCE), ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF LAW, ANCHORAGE, acknowledged that most of the Department of Law's concerns had been addressed in version before the Committee. KEVIN BROOKS, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF FISH AND GAME, noted that Senator Sharp had worked with the Department in addressing the legislation. He spoke to Section #3, which addresses the way in which the Division budgets and accounts for federal aid dollars. That section stipulates that those funds are made only to the Division of Sport Fish and Wildlife Conservation. He discussed that in the Department's budget, there are approximately $4 million dollars, funds which other divisions use. From these funds and those from the Division of Administrative Services, compensation and administration is paid. Mr. Brooks pointed out that the legislation would require a series of amendments to the current budget, moving all the fish and game funds and federal receipts out of administration and habitat, and then increasing the inter- agency receipts. An action which would increase the overall budget. Mr. Brooks reiterated that the Department has specific concerns in regards to Section #3 and asked Committee members to reconsider if portion of the bill was necessary. Co-Chair Therriault asked if Section 3 would prohibit or track the use of funds. Mr. Brooks replied that it was the Department's impression that all those funds would be placed into these two divisions, allowing for documentation for the Reimbursable Services Agreement (RSA) used by other divisions and requiring inclusion in both places in the budget. He advised that this is the current situation. He believed that the proposed action would increase the Department's budget request by $4 million dollars. DICK BISHOP, VICE PRESIDENT, ALASKA OUTDOOR COUNCIL (AOC), JUNEAU, noted that AOC strongly supports the bill before the Committee. He pointed out that 60% of Alaska is controlled by federal agencies and they generally are not willing to enhance habitats or populations on their lands. Thus, management to provide for abundant populations fall to the State on State and private lands. Mr. Bishop pointed out that SB 250 would bolster legislative policy regarding the importance of managing Alaska's big game populations to provide for their continuing well being and would benefit people under the sustained yield principle. Mr. Bishop added that it is necessary to ensure that the dollars contributed by hunters and trappers are spent to benefit the management and uses intended. Section #3 of the bill would provide a safeguard against that. He added that the definitions contained within the bill are consistent with sound game management practices and would provide benefit to all Alaskans. Mr. Bishop pointed out that it is mistakenly claimed that there is an inherent conflict between hunting management for hunting versus non-consumptive uses. Mr. Bishop stressed that this is false. It is clear that with sound management, prey populations can be enhanced, which in turn makes the ecosystem strong and enhances the survival of prey, predators and scavengers of all kinds. Co-Chair Therriault asked if Mr. Bishop could provide examples of past misuse of the federal funds. Mr. Bishop replied that there had been transfers in the past to other divisions within the Department which did not require a (RSA) at the discretion of the commissioner. Senator Sharp commented on the Department's trouble with Section #3 and noted that he had never heard of funds transferred within the Department as being double counted. He noted that RSA's leave an audit trail which is good business practice when transferring money that is highly restricted, indicating how funds are being used. He noted that Section #3 would mandate that the funds flow through the Division of Sport Fish or the Division of Wildlife Conservation. It places no restriction on legitimate uses. Representative J. Davies noted that he did not see the Division of Wildlife Conservation indicated in Section #3. WAYNE REGELIN, DIRECTOR, DIVISION OF WILDLIFE CONSERVATION, DEPARTMENT OF FISH AND GAME, advised that the Division of Game was changed in 1987 by Governor Cowper to the Division of Wildlife Conservation. He recommended that language be corrected in Section #3. In response to Representative Grussendorf, Senator Sharp noted that he had had problems when trying to move money around in the Department of Fish and Games budget. He reiterated that an audit trail would be helpful in tracking that budget. Co-Chair Therriault questioned how this system would work since RSA's were not reflected in the budget. Senator Sharp recommended that by adding an effective date of July 1, 1999, would dovetail with next year's budget. Representative Mulder asked if the Department supported the bill. Mr. Regelin replied that the Department did not support Section #3 of the bill, however, had reached agreement with the remaining portions. Representative J. Davies advised that he had a problem with the definition of "sustained yield" in the bill. He referenced Page 3, Line 5, language "high level of". He believed that referred to intensive management of game. Intensive management is defined on Page 2, Lines 18-19, "to enhance, extend, and develop the population to maintain high levels". He recommended omitting the words "a high level of" on Page 3, so that "sustained yield" would refer only to the ability to maintain. Representative J. Davies suggested that the definition "intensive management" consistent with "sustained yield". Mr. Regelin replied that the intensive management law was written in 1994, and that the legislation does not include all of that law, only the new changes. He believed that the Department could work with the definition of "sustained yield". Representative Mulder MOVED to adopt Amendment #1 to Page 2, Line 6 and Line 9, deleting "game" and inserting "wildlife conservation". There being NO OBJECTION, it was adopted. Representative Mulder MOVED to adopt Amendment #2, which would add an effective date to Section #3 of July 1, 1999. There being NO OBJECTION, it was adopted. Representative J. Davies MOVED to adopt Amendment #3, Page 2, Line 19, deleting "for" and inserting "consistent with" and Page 3, Line 3, to delete "a high level of". Representative Kelly OBJECTED for the purpose of discussion. Representative J. Davies explained that the two sections worked together more fluidly if the language were amended without changing the intent of the bill. Senator Sharp responded that Amendment #3, when analyzed in context of intensive management legislation would break the linkage with the board of game. The board still has the ability to determine which gaming populations will be identified and subject to intensive management. He believed that that the bill should keep the language "a high level of" because it would continue to be a selection, identified by the board, for high-level yield harvest. (Tape Change HFC 98- 127, Side 2). Representative J. Davies referenced the findings language which indicates that high use would be provided for, by implying to always be "mindful, of the need, not to diminish the resource". He believed that the deletion of language on Page 3 would not change the intent, but rather would inter-relate the terms in a more consistent way. Representative Mulder MOVED to divide Amendment #3. Representative J. Davies stated that the amendment on Page 2 would be mute without the amendment on Page 3. Representative Mulder MOVED to adopt Amendment #3a. There being NO OBJECTION, it was adopted. Representative Kelly maintained his OBJECTION to Amendment Representative J. Davies asked if the proposed change was made to Page 3, would the definition of "sustained yield" be more consistent with the traditional definition. Mr. Saxby replied that the framers of the Article 8 principle intended a much broader definition of "sustained yield" then any of the "then" current definitions applied by the U.S. Forest Service. They intended to have the Legislature enact laws that preserved a great deal of freedom for future application of sustained yield management. He noted that he was reluctant to say that there was any traditional definition of sustained yield mandated by the Constitution. The Legislature is permitted to "set the bar" where they want too. Mr. Regelin added that in the wildlife management textbooks, there is no definition of "sustained yield", although, there is written language addressing the principle. Definition #4 defines the "high level of human harvest" which is based on the biological capabilities of the population considering hunter demand. He believed that this is a matter which the Department and the board of game could work with. Representative J. Davies understood that "sustained yield" meant a non-diminishment with a periodic yield. A roll call vote was taken on the motion to adopt Amendment IN FAVOR: J. Davies, Grussendorf OPPOSED: Kelly, Kohring, Martin, Mulder, G. Davis, Foster, Therriault Representatives Moses and Hanley were not present for the vote. The MOTION FAILED (2-7). JOHN SCOEN, (TESTIFIED VIA TELECONFERENCE), DIRECTOR, OFFICE OF AUDORBON SOCIETY, ANCHORAGE, testified in opposition to the proposed legislation. He pointed out that the bill defines "high harvest levels" as the highest and best use of big game. He noted concern that the bill would require the Department to manage every big game population in the State to meet the high harvest level whether or not there is a demand for that harvest. He believed that the bill would not serve broad public interest in management of resources and that hunting is an important activity, and there must be management conservation when dealing with these resources. Representative Grussendorf asked which problems in the legislation had not yet been addressed. Mr. Saxby responded that a primary problem would exist by adopting any statutory definition of "sustained yield", which would invite the Alaska Supreme Court to refine it for us. In Title 38 and 41, there are statutory definitions of "sustained yield" which relate to forest management. In the one instance that the Alaska Supreme Court has had to examine that definition, it was narrowed from what the Legislature had adopted. As soon as a definition of a term used in the Constitution is created, then the Legislature comes before the Supreme Court's turf. He stressed that definition of these terms should be largely left to the day to day managers. He emphasized that the current version before the Committee has addressed a number of concerns which would have caused the Department of Law to recommend the Governor veto the sustained yield issue. Representative Kelly MOVED to report HCS CS SB 250 (FIN) out of Committee with individual recommendations and with the accompanying fiscal note. There being NO OBJECTION, it was adopted. HCS CS SB 250 (FIN) out of Committee with a "do pass" recommendation and with a fiscal note by the Department of Fish and Game. HOUSE BILL NO. 227 "An Act relating to the Alaska Capital Improvement Project Authority; relating to the powers and duties of the Department of Transportation and Public Facilities; and providing for an effective date." MARCO PIGNALBERI, STAFF, REPRESENTATIVE JOHN COWDERY, commented that the purpose of HB 227 was to increase public involvement, stability and discipline in capital project planning for the State of Alaska. Planning for Alaska's capital improvement projects is presently carried out by the Planning Division of the Department of Transportation and Public Facilities (DOTPF). Three regional planning teams carry out research and planning. These regional planning teams coordinate with the local governments, including Anchorage Metropolitan Transportation System (AMATS) and Fairbanks Metropolitan Transportation System (FMATS) within their region. These regional plans are feed into the statewide planning team in Juneau at which point they are consolidated into statewide plans. These stipulations are required for internal management and to meet requirements for federal funding. Mr. Pignalberi noted that HB 227 would come into play at the level of statewide prioritization and funding alternatives. It would not change the basic planning process now in use, although, it would change the method by which projects are rated, prioritized and submitted to the Governor and the Legislature. Mr. Pignalberi pointed out that despite efforts of DOTPF to make the planning process more inclusive and transparent to the public, capital project planning remains a science for most Alaskans. He suggested that planning was hindered by a lack of continuity at the executive level. He noted that past DOTPF commissioners have had an average tenure less than two years. Permanent professional planners become committed to the project which they work on. Mr. Pignalberi explained that the provisions of HB 227 are intended to make the capital project planning process more comprehensive, coherent to the public and stable in its role of building Alaska's infrastructure. The Authority would have a single purpose mission rather than be entangled with the multi-purposes of the Governor, Legislature and DOTPF. Mr. Pignalberi urged passage of the proposed legislation. He noted that both the federal highway administration and the federal aviation administration have testified in other committees expressing deep "fear" of "potential" problems in the legislation. He guaranteed that this would not happen. Mr. Pignalberi closed, noting that no one knows what the State's priority projects are now for any mode of transportation. HB 227 will provide policy and continuity. Representative Martin voiced concern with the separation of the proposed authority and the Executive Budget Act. Additionally, he believed that by such an Authority establishing fees would be in direct competition with the powers of taxation. He stressed that the legislation would be interfering with the Executive Branch of government. He pointed out that the role of the commissioner would loose all power to the proposed authority. Representative Grussendorf noted that under the current system, it is clear who gets held accountable for problems which occur and credit due. He questioned who would ultimately be responsible in a system proposed in the bill. (Tape Change HFC 98- 128, Side 1). Mr. Pignalberi addressed Representative Martin's concern, pointing out that it was the intent that the proposed legislation fall within the Executive Budget Act. Representative Martin recommended that there be an amendment which specifies that the authority stay under the Executive Budget Act. Co-Chair Therriault suggested checking with legal drafters to find that statute placement. Representative J. Davies thought it preposterous that more duties would be added in order to create an authority. Mr. Pignalberi noted that this was an issue that some attorneys have differed over and that it was not central to the sponsor's interest. He pointed out that Legal Services had recommended that it be added and he felt it could be removed. Representative J. Davies referenced Page 3, Line 21, and asked what authorization the authority would have power to revise. Mr. Pignalberi replied that all planning powers that currently reside within the Department would move to the Authority. Representative Martin asked if Mr. Pignalberi thought by statute, the legislation could change the power of the Executive Branch authority. Mr. Pignalberi stated that was the intent, which could be done by changing statute. Representative Martin disagreed, pointing out that there need to be a change to the Constitution. The Constitution states that all commissions are part of the Executive Branch. Mr. Pignalberi pointed out that all changes being made are changes in statute. He advised that 17 positions in the Department's Headquarters Planning Division would be moved to the Authority. The Department has many other functions which would not be moved such as operations, design and maintenance. Representative J. Davies asked if it would be funded by general funds. He stressed that the federal government will not fund a separate planning effort. Mr. Pignalberi stated that the federal government would fund whatever process the State comes up with. They will not fund a duplicative activity. HENRY SPRINGER, (TESTIFIED VIA TELECONFERENCE), DIRECTOR, ASSOCIATION OF GENERAL CONTRACTORS, ANCHORAGE, spoke in favor of the proposed legislation. (Testimony inaudible). THOMAS BRINGHAM, DIRECTOR, DIVISION OF STATEWIDE PLANNING, DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES, commented that HB 227 was a well intentioned effort to add stability to the transportation project development process. However, close examination of the bill has left the Department to conclude that if enacted, it would cause many problems in an attempt to solve problems that no longer exist. As a result, DOTPF does not support the legislation. DOTPF believes the process available for prioritizing and selecting projects is fair, stable and provides well for statewide transportation needs. He enumerated the problems created by the bill: ? The proposed Authority is not a true authority or commission which would be responsible for all capital and operating activities of the department. Capital programs approved by the authority would still be subject to legislative approval on a project by project basis. Under the Authority as proposed in HB 227, the Department and staff would be serving two masters, the Governor and the Authority. There are 13 states which have commissions with direct line authority, i.e., the commissions are responsible for all aspects of the operations of the department. There are 15 states that have commissions that are advisory to DOTPF or the Governor and DOTPF. Unlike these two types of commissions with clearly defined roles, the Authority proposed in HB 227 would establish an Authority with responsibilities that are more than advisory but less than a commission with line authority. The in-between status lead to confusion both inside and outside DOTPF. ? The intention of HB 227 in regard to the day-to- day operation of the Authority is unclear. ? This Authority will increase the cost of project selection and add costs and delays to programming efforts. It would add another layer to the existing project approval process, and would reduce responsiveness and add general fund administrative costs. ? The legislation would give the Authority the ability to delete and add projects to the Statewide Transportation Improvement Plan (STIP). Changes to the federally funded program must be made in accordance with the STIP process. Deviation from the process would render the project ineligible for funding. Mr. Bringham added that the Department has submitted a note outlining what the fiscal impacts of the legislation would be. These impacts total over $500 thousand dollars per year. All staff and related costs are to be paid for with State general funds. Representative G. Davis voiced frustration with the current process and the lack of public input. He noted that there is a lot of flexibility in the planning process regarding how federal dollars are spent. Representative J. Davies asked how the prioritization of projects would occur when the bill was in place. He asked if the Authority made a change, would the proposal need to go through the public process again. Mr. Bringham replied that was not clear to the Department. At present time, the regional staff works with the communities to pool the projects together and the highest scored ones go to statewide competition. Representative J. Davies asked the relationship between the AMATS and the FMATS. Mr. Bringham responded that federal law protects the AMATS program. That program must be totally incorporated into the Department's STIP. The State agency does not have any authority to change it. (Tape Change HFC 98- 128, Side 2). JACK KREINHEDER, SENIOR POLICY ANALYST, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR, stated that the Office of Management and Budget (OMB) believes that the proposed Authority would be an unnecessary level of bureaucracy. Mr. Kreinheder agreed with Mr. Bringham in problems which would occur during a turnover, when the Authority becomes "out-of-sink" with the Administration. At that point, they would become a dual entity to do business with. He projected that the Governor would end up ignoring the commission, as the Governor's constitutional power can not be changed by statute. He pointed out that OMB would suggest to the Governor that the proposed legislation would create constitutional problems. Mr. Kreinheder advised that the Administration is open to suggestions for improving the planning process with public and legislative input. In conclusion, Mr. Kreinheder stated that in regard to the legislative amendments, the entire concept is flawed. He recommended against going with a full commission, suggesting that an advisory commission could address some of the problems. Mr. Kreinheder would recommend the bill be vetoed. HB 227 was HELD in Committee for further discussion. ADJOURNMENT The meeting adjourned at 4:00 P.M. H.F.C. 13 4/27/98 p.m.