Legislature(1995 - 1996)
04/03/1996 02:35 PM CRA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 466 ADAK REUSE AUTHORITY CHAIRMAN TORGERSON called the Senate Community & Regional Affairs Committee meeting to order at 2:35 p.m. He stated because the committee lacked a quorum and could take no action on the calendared legislation, the meeting would be considered a work session on the bills. He then brought CSHB 466(FIN) am before the committee as the first order of business. Number 015 REPRESENTATIVE MOSES , prime sponsor of HB 466, explained the legislation establishes an Adak Reuse Authority to facilitate the conversion of the Adak Naval Air Facility to predominantly civilian use. Because there is no local government on Adak, the authority is needed to receive federal assets, manage a reuse plan and perform administrative functions as the Navy withdraws from the island. The bill establishes a seven-member board, and provides that two of those members must be residents of the Aleutian region. It also empowers the authority to enter into contracts, operate enterprises, receive grants and other funds, disperse funds and issue revenue bonds. It also requires approval by the legislature of any specific issue. Representative Moses noted the legislation also contains a provision for the director of the Office of Management & Budget to approve transfers of property from the federal government once the director has established that funds will be available to manage that property appropriately. Representative Moses said the bill has been written to ensure a smooth transfer to any eventual municipality created locally or on the island. The reuse authority is not expected to be a long-lived entity. In conclusion, Representative Moses said with the considerable assets available once the Navy leaves Adak, a diverse commercially viable community is a realistic vision of enhancement for the Aleutian region. He urged the committee's favorable consideration of the legislation. Number 055 SENATOR TORGERSON questioned having the Department of Community & Regional Affairs as the lead agency instead of the Department of Commerce & Economic Development, because the biggest issue is probably economic development. REPRESENTATIVE MOSES responded he thought DCRA was selected because of the eventual need for forming a local government in the region. TIM BENINTENDI , legislative aide to Representative Moses, pointed out the legislation provides that two members of the authority to be selected by the governor will be heads of principal departments of the executive branch, and he suggested the Department of Commerce could be represented in that way. Number 090 SENATOR KELLY inquired what the cost of the reuse authority will be in general fund dollars. REPRESENTATIVE MOSES replied the fiscal note from DCRA shows a cost of $281,000. Number 104 SENATOR TORGERSON referred to language on page 2, lines 20 - 22, which gives the governor the authority to break a tie vote on a motion or resolution pending before the authority, and he questioned why that provision was included. SENATOR KELLY also pointed out that the section does not specify the number of votes of the full membership needed to take an action. On most boards and commissions there has to be a majority of the membership of the board to take action, and, if it is a seven-member board, it takes four votes in order to take an action. TIM BENINTENDI said the language was pretty standard language that was included in the original draft of the legislation and those issues hadn't been previously raised. SENATOR KELLY noted the fiscal note is for two employees, and he suggested that be put into statute like was done several years ago with the Tourism Marketing Council in order to limit the ability to hire more than two employees. He assumed the authority would have the ability to contract for employees to provide other types of necessary services. TIM BENINTENDI agreed that was correct, and he added that those contract employees would not be employees of the state, but the executive director and the executive secretary will be employees of the state. Number 182 CHRIS GATES, representing the Aleut Corporation and testifying from Boston, Mass., asked that the committee focus on three areas, the first being representation. He said the intent of federal law is real clear that it should be a local reuse authority, and, so far, consideration of a local reuse concept has not been allowed to move forward. He urged the committee to look at the possibility of a local reuse committee. Mr. Gates said the legislation provides that the governor appoint five board members, which can come from any where in the state, two of which might come from the Aleutians. He suggested the bill be amended to allow villages, communities and Native groups of the region, those who will win or lose when Adak is reused, to serve on the board of directors. Mr. Gates suggested on page 1, beginning on line 10, to change the language to read as follows: "(a) The membership of the authority consists of (1) a representative from the City of Unalaska; (2) a representative from the City of Atka; (3) a representative from the Aleutians East Borough; (4) a representative from The Aleut Corporation; (5) a representative from the 15 village corporations located within the Aleutians-Pribilof Island region; (6) a representative from the 12 tribal organizations in the region; (7) a representative from the Aleutians Pribilof Island Association; and (8) two representatives from the state of Alaska." Mr. Gates believes a local board will be more informed of the economics, the political, the social, the administrative framework of the region, and would be more capable of making quicker decisions than the board that's proposed in the bill. Mr. Gates noted the Aleut people having been working very hard for several months to consolidate and make an arrangement with the Department of Interior to trade all of their land entitlements under ANCSA in the whole region on to Adak Island so that Adak will be the "basket carrying all the eggs in the future of the Aleut people and the Aleut community in the Aleutians." Mr. Gates spoke to the necessity of keeping the assets and infrastructure on Adak Island in tact. As an example, he noted that when a school with an enrollment of over 400 students was closed on the island, every thing in that was school stripped out and dispersed to other locations, and when Adak is reused, all of that will have to bought and resupplied to the island at great cost. He suggested that if the legislation moves forward, it should provide a moratorium on stripping equipment and infrastructure off of the island for three to five years without a super majority vote of the board. Mr. Gates directed attention to page 13 and the section relating to "Succession." He said the House Finance Committee pointed out the section needs clarification as to the duties to be taken over by a successive municipality, but no work has been done to clarify the section. In closing, Mr. Gates said the state authority concept may not be the best tool. He said there are four bases around the country that use simple nonprofit organizations that do exactly the same things that this authority does, only does them better. Number 326 SENATOR TORGERSON asked what Senator Stevens' position is on the issue. REPRESENTATIVE MOSES answered that he doesn't think Senator Stevens has taken a definitive position, although he would like to see the interested parties come back with a united front. Addressing Mr. Gates comments that the makeup of the board does not constitute a local authority, Representative Moses said he gets the impression that according to the Aleut Corporation, nothing will work unless they have absolute control of whatever authority it will be. He also believes that whatever authority comes into play, it should not be limited and have its hands tied so that nothing can be removed from the island. There undoubtedly will be a lot of extra equipment that won't be immediately needed for the community and it will just sit there and become obsolete and deteriorate. Number 362 SENATOR TORGERSON asked for a response to Mr. Gates' comments on the succession provision. TIM BENINTENDI said the bill was amended on the floor to accommodate the House Finance Committee's concern. He added that there has been no indication since the last House Finance meeting or on the floor of the House that there is still a problem with succession. The authority is designed to be a fairly austere short-lived authority. He said the authority should have the liberty to sell off surplus material, or trade it, lease it, etc., in terms of generating cash flow to sustain itself and to help the community remain on its feet until a municipality can be formed. He also said the makeup of the board is compatible with the way other boards have been done. The bill has been determined to be a reasonable vehicle from many quarters of the state, and even outside of the state, and that Aleut interests can participate in it. Number 422 SENATOR TORGERSON commented that it could end up with only two people representing the Adak area on the board and five that are not residents, so even with a super majority vote, equipment or whatever else could be removed over the objections of the two people who reside in the area. He asked Representative Moses if this was a concern. REPRESENTATIVE MOSES replied that if an authority is created for the benefit of Adak becoming a viable community in a fairly rapid time, their charge is to look out for the interests of Adak. However, if there were a number of different communities controlling that board, they would probably start fighting among themselves as to who was going to get what. Number 445 CHRIS GATES informed the committee that Senator Stevens recently wrote that a nonprofit corporation offers a mechanism to jump start the process of attracting commercial enterprises to Adak this year. He has looked at another entity besides this authority and thinks that it might, if well constructed and well put together, do better than the authority proposed in the legislation. Number 475 SENATOR TORGERSON asked if with DCRA's involvement their primary objective would be to form a municipality. TIM BENINTENDI answered it is not addressed positively or negatively in the legislation. SENATOR TORGERSON said he feels DCRA should probably have a secondary role and DCED should be the lead agency because this is a two billion dollar economic development issue. The secondary proposal would be to form a local government if possible. Also, it speaks to the bonding authority and the commissioner of DCRA is not on the bond council, but the commissioner of DCED is. REPRESENTATIVE MOSES said he didn't think he would have a problem with DCED being the lead agency. He also related the City of Unalaska has done a study on forming a borough and expanding their boundaries to include Adak and Aleutians East. Number 520 KRIS LETHIN , CEO of The Aleut Corporation, stated an issue that has not been brought to the surface is the issue of lands. This particular military base sits on national wildlife refuge land; it's totally encompassed in that land. He said he has not heard Representative Moses or Deputy Commissioner Cotten address how the state is going to deal with the issue of taking over and having authority in a national wildlife refuge and having all the facilities to maintain and upkeep, as well as being able to have the funding available to them. Mr. Lethin said the Aleut people have felt very strongly about their involvement because they would like to be able to be involved from a land standpoint. They have 55,000 acres of unconveyed surface estate and 144,000 acres of subsurface estate, which is unconveyed to them under the ANCSA legislation. They have also over-selected in the Aleutian Maritime Refuse over 1,000,000 acres that basically cloud the title on the entire refuge in the Aleutians. The U.S. Fish & Wildlife would very much like to negotiate with the Aleut people to resolve those title clouds and the title issues and to use Adak as the primary tool for that. Mr. Lethin said there was a meeting the previous Friday with the state of Alaska, the U.S. Navy and The Aleut Corporation participating, to discuss how this issue could potentially be taken care of. He said they were told that the state, in essence, did not want to proceed any further until they knew exactly what was going to happen with HB 466, so that brought that whole process on the lands issue to a halt until the issue of the legislation is resolved. Mr. Lethin said this could end up being a very contentious thing, and they have tried all along to figure how to bring some middle ground to all of this, and he suggested there may be some middle ground by using the nonprofit approach. He pointed out the Fort Greely reuse program is under a nonprofit corporation. He personally sees the state taking on an authority such as provided for in HB 466, as a black hole with the state becoming the deep pocket. Number 580 There being no further testimony on HB 466, SENATOR TORGERSON said a committee substitute would be prepared to address the issues of: the number of employees of the authority being placed in statute; the quorum requirement; and changing DCED to the lead agency. He added that the issues brought up by Mr. Gates and Mr. Lethin, relating to authority and limits, were questions that would need to be addressed in Senate Finance. He stated it was his intention to have the legislation back before the committee at its next meeting for final action.