Legislature(1997 - 1998)

03/05/1997 01:40 PM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
  HOUSE BILL 113                                                               
                                                                               
       "An Act extending  lapse dates  for certain prior  year                 
       appropriations;  making   supplemental,  capital,   and                 
       special appropriations; and providing for an  effective                 
       date."                                                                  
                                                                               
  DEPARTMENT OF NATURAL RESOURCES                                              
                                                                               
  Section 4(e)                                                                 
                                                                               
       $200.0 thousand dollars  -    Perseverance Trail                        
                                                                               
  NICO  BUS, CHIEF, FINANCIAL  SERVICES, DEPARTMENT OF NATURAL                 
  RESOURCES, stated  that the requested funding  would provide                 
  emergency repairs to the severely storm damaged Perseverance                 
  Trail.   Though  the  trail is  closed, use  continues under                 
  extreme hazardous  conditions.   The work needs  to be  done                 
  before the summer  season, to capture  the high use  period.                 
  Delaying the  work until  the Fall  would expose  workers to                 
  dangerous  avalanche   and  weather  conditions   and  would                 
  increase project costs by limiting the time and access.                      
                                                                               
  Co-Chair Therriault inquired  if any of the  trail rested on                 
  private  property.   Mr.  Bus  noted that  the  entire trail                 
  system was an  "easement into perpetuity", belonging  to the                 
  State of Alaska.                                                             
                                                                               
  Mr.  Bus  advised  that  no  permits  would  be  needed  for                 
  blasting.  Co-Chair Hanley voiced concern with the impact of                 
  the blasting on the streams.  He requested  that a letter of                 
  response  be provided  by the  Department of Fish  and Game,                 
  which would address the impacts  of blasting on the streams,                 
  in order that consistency could be  created in use for other                 
  requests.  Mr. Bus replied that  no permit is needed because                 
  a concrete flume exists  at the bottom of the area  and that                 
  no salmon can run up.                                                        
                                                                               
  Mr. Bus spoke to the breakdown of the request; $120 thousand                 
  dollars would be used for the blasting work and $80 thousand                 
  dollars would be used  for the bridge repair and  tread work                 
  from the beginning of the trail to the last bridge.  Mr. Bus                 
  provided  Committee  members  a   handout  illustrating  the                 
                                                                               
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  Perseverance  trail emergency repairs.   [Copy on file].  He                 
  provided an overview of that handout.                                        
                                                                               
  Representative Kohring  questioned the  "emergency" need  of                 
  the project.  He  urged that the request be addressed in the                 
  Capital  Budget   Request   (CBR).      Mr.   Bus   reminded                 
  Representative  Kohring  that  over  35,000 people  use  the                 
  trail.  It is necessary to begin the work in May  to be able                 
  to address  summer  tourism.   Representative Kohring  noted                 
  that the trail is used for recreation purposes only.                         
                                                                               
  Representative  J.  Davies  argued that  the  timing  of the                 
  project places it into the Supplemental Request category and                 
  that the impact  of not doing the work  now, would close the                 
  trail for the entire summer.                                                 
                                                                               
  Representative Martin  asked if tourism raised  enough money                 
  to address the concern and future repairs of  the area.  Mr.                 
  Bus replied that the user fee for tourism was $250 dollars a                 
  year.  He argued that the State of Alaska is the land owner,                 
  whose responsibility it is to keep the area safe.                            
                                                                               
  Representative  Martin  asked if  the  City of  Juneau would                 
  participate in covering the  costs.  Mr. Bus noted  that the                 
  City's  budget  was  limited  as  a  result  of  many  areas                 
  experiencing significant storm  damage this  year.  Mr.  Bus                 
  spoke to the  timing of  the repair work  noting that if  it                 
  commenced  on  May 1st,  it would  be  ready for  the summer                 
  tourists in early June.                                                      
                                                                               
  Representative J. Davies  asked if  the commercial use  fees                 
  were placed into the General Fund.  Mr. Bus informed members                 
  that  those  fees are  placed  into  the Division  of  Parks                 
  budget, and then used for operation purposes.                                
                                                                               
  Section 9(a)                                                                 
                                                                               
       $3,788.3 thousand dollars     -    Fire Suppression                     
                                                                               
  Mr.  Bus noted  that  the  request  would address  the  fire                 
  suppression budget from  January through  June, 1997.   Last                 
  year, the Department spent $7.8  million dollars and carried                 
  forward  $2.1  million dollars,  leaving  a balance  of $1.5                 
  million  dollars.   Costs  between now  and June,  1997, are                 
  estimated to be $5.3 million dollars.                                        
                                                                               
  Co-Chair  Hanley asked  the  amount of  fixed  costs in  the                 
  request.  Mr. Bus replied that  the fixed costs from January                 
  through  July,  would  be $2.3  million  dollars.   Co-Chair                 
  Hanley understood that the fixed costs would be addressed in                 
  the Operating Budget and that the "non-fixed costs" would be                 
  addressed  in  the  Supplemental Budget  Request.    Mr. Bus                 
                                                                               
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  replied that  the fixed  costs to  the Department were  $4.6                 
  million dollars, and  were divided  into two time  segments.                 
  Mr. Bus added  that the  increase to the  fixed cost  budget                 
  resulted from  long term contracts coming up  for renewal at                 
  higher amounts than originally contracted for.                               
                                                                               
  Section 9(c)                                                                 
                                                                               
       $100.0 thousand dollars  -    Old Eagle School Site                     
                                                                               
  Mr. Bus  informed Committee members  that this  supplemental                 
  request would  fund the  removal of  existing buildings  and                 
  facilities at the Old Eagle School  site and would allow for                 
  eventual remediation of contaminated soils at the site so to                 
  reduce health and safety hazards.   The request had resulted                 
  from a lawsuit which was filed by the Village of Eagle.  The                 
  judge ordered that the money be appropriated by  July, 1996.                 
                                                                               
                                                                               
  Co-Chair Hanley asked who built the  school.  Mr. Bus stated                 
  that it  was  purchased from  the Bureau  of Indian  Affairs                 
  (BIA).  To make the site useable, the buildings will need to                 
  be  cleaned up  and the  soil contamination addressed.   The                 
  Village of Eagle sued  the U.S. Government and the  State of                 
  Alaska.                                                                      
                                                                               
  BARBARA  RITCHIE, DEPUTY  ATTORNEY GENERAL,  CIVIL DIVISION,                 
  DEPARTMENT OF LAW,  noted that the settlement was adopted as                 
  an  order  of  the  Court.    The  U.S.  government  is  not                 
  contributing to the removal costs.   There is no evidence to                 
  indicate that  the contamination  existed in  1967 when  the                 
  State took title  of the property.  She stated, the State of                 
  Alaska is responsible for the clean-up costs and all hazards                 
  on the property.                                                             
                                                                               
  Ms. Ritchie continued,  the Village  of Eagle brought  their                 
  law suit against  the State in  order to bring the  property                 
  back to it's  original state.   The U.S. government and  the                 
  State of Alaska moved to dismiss the case based on sovereign                 
  immunity.  There  exists a statute  stipulating that a  suit                 
  can be brought  forward, if  the complaint is  filed by  the                 
  same entity who owned the property before the contamination.                 
  The United States  dismissed it, noting  that they were  not                 
  the former owner  of the  property.  The  judge denied  that                 
  action and requested a briefing in order to check the Alaska                 
  Native Claims Settlement Act (ANCSA) status of government at                 
  that time.                                                                   
                                                                               
  Co-Chair  Therriault  pointed  out  that  the  building  was                 
  "laced" with asbestos  before the State took  ownership from                 
  the  federal  government.   Ms.  Ritchie  assessed  that the                 
  asbestos  tiles were  in the floor  and were  not in  and of                 
                                                                               
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  themselves illegal.   If  they were  well maintained,  there                 
  would not be a release of fiber.  The problem developed when                 
  the State  purchased  the property,  and  it was  no  longer                 
  maintained.                                                                  
                                                                               
  Co-Chair Hanley  voiced his  frustration that  the State  is                 
  held  liable  for  an  REAA  responsibility.    Ms.  Ritchie                 
  reiterated that this  is State property  and that it is  not                 
  being operated by an REAA at this time.                                      
                                                                               
  Mr.  Nico  advised  that the  requested  funding  would only                 
  address  Phase I of  the project.   Following  completion of                 
  that,  the  oil  contamination  problem  would  need  to  be                 
  addressed.  This request  has been expedited because of  the                 
  Court settlement order completion by July 1, 1997.                           
                                                                               
  Ms. Ritchie reiterated  that there  are no facts  indicating                 
  that  a problem existed before the State took over ownership                 
  of the  property.   Committee members  noted their  surprise                 
  that the federal government would not be responsible for any                 
  of the costs.                                                                
                                                                               
  (Tape Change HFC 97-47, Side 2).                                             
                                                                               
  DEPARTMENT OF LAW                                                            
                                                                               
  Section 6(a)                                                                 
                                                                               
       0.0       -         Oil   and   gas   audits  &   legal                 
       proceedings                                                             
                                                                               
  FRED FISHER, DIRECTOR, DIVISION OF ADMINISTRATIVE  SERVICES,                 
  DEPARTMENT  OF LAW,  pointed out  that in  most years  since                 
  FY79,  the   Department   has   received   more   than   one                 
  appropriation per year for oil  and gas litigation purposes.                 
  Beginning in FY92,  the Legislature  changed that policy  by                 
  making only one appropriation per  year.  Consequently, from                 
  the  years  FY92  through  FY95,  the  Department  requested                 
  supplemental  appropriations,   although,  had   difficultly                 
  spending those appropriations by the end of the fiscal year.                 
  As  a result,  management policy  was to encumber  the funds                 
  received  late in  the  fiscal year  and  spend those  funds                 
  during  the  following  fiscal  year.    This  practice  was                 
  questioned last year by the Division of Budget and Audit, at                 
  which time, the Department requested  a lapse date extension                 
  which was granted by the Legislature.                                        
                                                                               
  Mr. Fisher spoke  to the available  options.  He noted  that                 
  concerns had been expressed with  tapping the Constitutional                 
  Budget Reserve (CBR) fund  3/4 vote.  Ms. Ritchie  noted her                 
  surprise by  handout  provided from  the  Governor's  Office                 
  recommending deletion of the request.  [Copy on file].                       
                                                                               
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  Mr. Fisher referenced  another option which would  request a                 
  General Fund supplemental in leu of the last date extension.                 
  An additional option  would be deleting the  entire section.                 
  He believed, to discontinue the current practice would place                 
  the  Department in a situation requiring future supplemental                 
  appropriations.                                                              
                                                                               
  Co-Chair  Hanley agreed that  there have been carry-forwards                 
  for many years.  He suggested  that the Department provide a                 
  budget which clarifies what they anticipate the need will be                 
  for  litigation.    Should  the  Department  have  unforseen                 
  circumstances, they will then come to the Legislature for  a                 
  supplemental.    Co-Chair Hanley  requested  no  more carry-                 
  forwards.                                                                    
                                                                               
  Mr. Fisher advised, of the $7 million dollars allocated, the                 
  Department has  spent $6.1 million  dollars and  anticipates                 
  using the  remainder before the end of  the fiscal year.  He                 
  pointed out that the request had been made in order to clear                 
  potential audit questions.                                                   
                                                                               
  Co-Chair Hanley noted  that a  split supplemental would  not                 
  create problems; carry-forwards create problems.  Mr. Fisher                 
  pointed out that  prior year costs  to the budget  generally                 
  are representative  of actual expenditures  and encumbrances                 
  as of  the end of the fiscal year.   That action has created                 
  confusion to oil and gas litigation costs.                                   
                                                                               
  Co-Chair Hanley  requested  a spread-sheet  of the  "actual"                 
  costs as well as  anticipated "actual" costs to be  spent by                 
  the Department over the year.  The chart should indicate the                 
  $7  million  dollars  that was  encumbered  in  the previous                 
  fiscal year and spent in this fiscal year.                                   
                                                                               
  Section 6(b)                                                                 
                                                                               
       $97.1 thousand dollars   -    Civil                                     
                                                                               
  Ms. Ritchie  provided Committee  with a  handout identifying                 
  additional FY97 judgments from  the General Fund.  [Copy  on                 
  file].  The list contains a total itemized request of $235.1                 
  thousand General Fund dollars.                                               
                                                                               
  Co-Chair Hanley asked if the Venetie versus State case was a                 
  judgement or settlement.   Ms.  Ritchie stated that  request                 
  was for $11.7 thousand dollar costs awarded to the plaintive                 
  by the federal District Court arising from the trial of that                 
  case.    The  request  does  not  cover  attorney  fees   or                 
  settlement  costs.     No  payment   was  involved  in   the                 
  settlement.                                                                  
                                                                               
                                                                               
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  She commented that  this was not  the Venetie case that  the                 
  State is currently  taking to the  Supreme Court.  The  case                 
  referenced  in Section  6(b) originated  in November,  1986,                 
  when the  IRA Councils  of Venetie  sued the  State and  the                 
  Commissioner of the Department of Health and Social Services                 
  for   an  injunctive   and  declaratory   relief  addressing                 
  substitute birth certificates.  The  State declined to issue                 
  the  birth certificates on the basis  that the Tribal Courts                 
  did not have the authority to undertake the adoption.                        
                                                                               
  Mr.  Ritchie continued,  the case  went to  the 9th  Circuit                 
  Court and then  remanded back  to the District  Court for  a                 
  trial  on  the  Tribal status  issue.    When  the case  was                 
  remanded, it was consolidated  for the purposes of a  trial.                 
  Eventually, the judge issued a decision on tribal status and                 
  Indian country.                                                              
                                                                               
  Ms. Ritchie noted that the request would cover costs accrued                 
  by the plaintiffs in  that case.  They also  sought attorney                 
  fees  which  Judge  Holland  denied.    The  issue  of  case                 
  addressed Tribal status and costs were awarded.                              
                                                                               
  Co-Chair  Hanley  noted  that  Alaska  Legal   Services  was                 
  representing the Venetie case.  Ms. Ritchie interjected that                 
  case  was  being  represented  by  Alaska  Legal   Services,                 
  although,  the  tax  case  was  represented  by  the  Native                 
  American Rights Fund.   Alaska Legal Services is  a private,                 
  non-profit,  established  by federal  law, and  recipient of                 
  funding  under  the  Legal  Service's  Act  appropriated  by                 
  Congress.  Legal Services is  allowed under federal law,  to                 
  represent any sort of group or  association if that group is                 
  composed of people  eligible for  that assistance under  the                 
  Legal Services Corporation Act.  That criteria is based upon                 
  income.                                                                      
                                                                               
  Representative J. Davies asked if  the interest column would                 
  increase.  Ms.  Ritchie replied that the interest column had                 
  been calculated through June 30, 1997.                                       
                                                                               
  Ms. Ritchie  noted that in 1996, Congress  amended the Legal                 
  Services  Act  to  prohibit  recipients  of  Legal  Services                 
  funding from collecting  attorney's fees.  That  prohibition                 
  applies to  all cases  after the  enactment date,  although,                 
  would not apply to  cases with pending issues prior  to that                 
  time.                                                                        
                                                                               
  HB 113 was HELD in Committee for further discussion.                         

Document Name Date/Time Subjects