Legislature(1995 - 1996)

04/03/1996 02:35 PM CRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= 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               
 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           
 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             
 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               
 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               
 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.                                                             

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