Legislature(2009 - 2010)
04/16/2009 05:11 PM House FIN
| Audio | Topic |
|---|---|
| SB1 | |
| HB88 | |
| HB151 | |
| SB57 | |
| SB96 | |
| SB170 | |
| SB114 | |
| SB75 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CS FOR SENATE BILL NO. 75(FIN)
"An Act making and amending appropriations, including
capital appropriations, supplemental appropriations,
and appropriations to capitalize funds; and providing
for an effective date."
Co-Chair Hawker MOVED to adopt HCS CSSB 75 (FIN) as a
working document before the committee. There being NO
OBJECTION, it was so ordered.
8:14:42 PM
JAMES ARMSTRONG, STAFF, CO-CHAIR STOLTZE, reported that
there were three additional legislative finance reports;
numbers and language differences only, numbers and language
differences statewide, and numbers and language detailed by
agency.
8:17:05 PM
Mr. Armstrong listed the changes to the bill. Page 2, Line
13, adds the appropriation mechanism of $2,500,000, for the
Enterprise Security Projects.
Representative Gara asked for clarification on the first
change. Mr. Armstrong replied that in the previous draft the
Senate added the funding for the Enterprise technology in
the language section, but due to a technical error, the
actual funding allocation mechanism allowing the agency to
spend the money, was omitted. The change adds that allowance
language back in.
Mr. Armstrong continued. Page 2, Line 27, adds $4.5 million
in general funds match to Alaska Energy Authority-Renewable
Energy Projects. It also adds $1 million in Statutory
Designated Program Receipts and Inter Agency Receipts. Page
3, Line 17, adds intent language to the $10 million
appropriation to the Port of Anchorage. The appropriation is
contingent upon the municipality assembly adopting a
resolution identifying the specific ferry landing location
for M/V Susitna. Line 22, requests that the Municipality of
Anchorage assist the Mat-Su borough in grant applications
for port projects to the United States Department of
Transportation.
8:18:23 PM
Representative Gara wondered where the corresponding change
could be found in the numbers and language section of the
bill. Mr. Armstrong replied that the language had been added
to the general fund portion of the ports appropriation. He
added that he would point out intent language in the bill as
it came up.
8:19:11 PM
Mr. Armstrong continued to Line 27, the Kenai River Bluff
Project. The project was not in the original bill. The Corps
of Engineers has $13 million slated for the project. The
Kenai borough has added $2 million to the project, which the
state has matched. Language has been added to specify that
the appropriation is contingent upon the fund from the Corps
of Engineers. Mr. Armstrong noted that the bonds had been
approved, but not issued, in anticipation of the $13
million.
Vice-Chair Thomas asked when an answer from the Corps of
Engineers could be expected. Mr. Armstrong said that the
corps was still in deliberation.
Co-Chair Stoltze pointed out that the project had been
introduced by the administration.
8:20:06 PM
Mr. Armstrong continued to Page 19, Line 19, which adds 40
percent of the deferred maintenance funds requested by
Alaska Housing Finance Corporation (AHFC) for the AHFC
Building System Replacement Program. Page 19, Line 33, adds
$1,380,000 to AHFC Fire Protection Systems, also 40 percent
of the deferred maintenance receipts requested by the
corporation.
8:21:03 PM
Mr. Armstrong explained that AHFC had bonded for deferred
maintenance receipts in the past. The bonding has run out
and regular program receipts are now being requested.
Representative Kelly asked if the administration had made
the request on behalf of the corporation. Mr. Armstrong
replied that it had.
8:21:59 PM
Mr. Armstrong continued to page 20, Line 15. He stated that
$3.5 million had been added to the third phase of the AHFC
Loussac Manor renovation and replacement in Anchorage. Line
18 notes a third of the deferred maintenance for AHFC
Security Systems Replacement/Upgrades for public housing.
Congress has given AHFC $600,000 for the Weatherization
Program, as noted on Page 20, Line 32.
8:22:45 PM
Mr. Armstrong informed the committee that $400,000 for the
Alaska Aviation Safety Program had been added on Page 21,
Line 10. Those funds have been matched by the Federal
Aviation Administration and The Medallion Foundation.
8:23:22 PM
Mr. Armstrong relayed that Page 21, Lines 20, 21 and 22
notes the administrative intent language for the Alaska
Marine Highway System. Page 21, Line 31 notes the 60 percent
of the funding for the Harbor Program Development was
restored at the request of the administration. This project
had been overlooked, but will be moved in 2010 to the
operating budget.
Representative Foster pointed out that in the past the
administration had vetoed capital projects. Mr. Armstrong
assumed that the administration would not veto its own
request.
8:24:50 PM
Representative Gara asked if all the changes mentioned were
governor's requests. Mr. Armstrong reported that after the
Senate version of the bill had passed, projects that could
capture a match had been identified. He said that some of
the matches would not flow through the appropriation
process. Co-Chair Stoltze added that a list of projects had
been presented that had match funds, but through errors,
some projects had not made the list.
Representative Gara restated his question. Mr. Armstrong
explained that the back-up had been reviewed twice. He
elaborated that some of the back-up did not illustrate
whether there had been an accompanying federal match.
Representative Gara asked if the items had been in the
governor's original budget.
8:26:57 PM
Mr. Armstrong pointed out that Page 34, Line 14 and Page 36,
Line 9, were both oversights in the amendment process
between the Department of Transportation stimulus
legislation and the original capital budget. The line
changes restore funding for FY 2009 projects that were
already on the STIP in the original capital budget.
8:28:22 PM
Mr. Armstrong turned to Section 4, Page 44, Line 10. The
title for the appropriation has been changed from Egan
Center Upgrades to Passenger Staging Upgrades.
Representative Gara returned to the Egan Center
appropriation. He wondered if the money would come from
cruise ship funds. Mr. Armstrong said yes. All of Section 4
pertains to cruise ship funds.
Mr. Armstrong continued reading from the bill. Page 45, Line
9 is related to the Baranof Park Project in Kodiak, which
was in the original CS from the senate, and was not a
qualifying project. Another project is slated for $1.3
million, making the addition a net zero addition.
8:30:54 PM
Mr. Armstrong continued to Page 45, Lines 19 and 20, which
are a title change. The words "and Construction" have been
added. Page 46, Line 22, title change inserts the work
"passenger" between "marine" and "service". Page 46, Line
29, is the Fort Abercrombie Tourist Bus Parking, which is
the $1.3 million project previously mentioned. If you add
the appropriation on Page 45, Line 9 to Page, 46, Line 29,
and take out the Baranof Park Project, the addition is net
zero.
8:32:46 PM
Mr. Armstrong informed the committee that the $6 million in
allocations from the original bill sent by the Senate have
been collapsed into one separate appropriation, and intent
language has been added to the top of page 47.
Vice-Chair Thomas wondered how the numbers of people who
utilize parks were accounted for. Mr. Armstrong deferred to
the administration.
8:33:39 PM
Representative Crawford asked about the funding source for
line 32, page 46, State Parks Deferred Maintenance and
Emergency. Mr. Armstrong related that when the bill was
first released by the governor, projects in the section were
to be funded, within the fast track supplemental, using
cruise ship gambling proceeds. However, the administration,
upon consultation with the legislature, decided to classify
the gambling funds as general funds. As a result, $6 million
of the cruise ship head tax dollars have been allocated for
statewide deferred maintenance projects.
8:34:44 PM
Co-Chair Hawker clarified that the head tax has very
specific legal requirements as to how it can be spent. The
Office of Management and Budget (OMB) and the state had
originally thought of the gambling tax as a new and separate
fund source. Upon reflection, it was understood that the
gambling tax was just like all other taxes and was meant to
feed the general fund. He made clear that where the tax was
indicated on earlier spreadsheets was to be treated as an
anachronism, and will always be treated as general funds
going forward.
8:35:42 PM
Mr. Armstrong continued to read from the bill. On Page 53,
Lines 15 and 17, corrections have been made to rectify the
incorrect House District numbers. Page 63, Lines 1 through
28, are intent language that covers an appropriation in the
language section. Co-Chair Stoltze recommended deferring
those line budget items to Co-Chair Hawker at a later time.
Mr. Armstrong continued to Page 67, Line 23.
8:37:13 PM
Co-Chair Hawker reported that there are three sections in
the bill that could arguably be called operating
appropriation for the year. The sections are; Section 21,
Page 67, Section 20, Page 67, and associated intent language
on Page 63. There has been ongoing discussion in the
legislature concerning state investment in in-state gas
development, while attempting to reconcile development of a
gas line with high fuel costs. Section 20 appropriated an
additional general fund appropriation into the Department of
Health and Social Services (DHSS) to continue to build the
Low Income Home Energy Assistance Program fund (LIHEAP). The
funds augment the federal Alaska Heating Assistance Program.
8:39:17 PM
Co-Chair Hawker stressed that money for in-state gas
development was the top budgetary priority for the governor.
He gave that $9 million in general funds have been added to
Office of the Governor for gasline development. He read
from the legislative intent language in Section 13, Page 63,
Lines 3-6. He emphasized that the project is not related to
Alaska Gasline Inducement Act (AGIA), but to continue to
work to develop in-state gas for in-state use. It is meant
expedite the efforts needed for private enterprise to
complete the project. The money was appropriated to the
Office of the Governor to ensure the governor the latitude
to distribute the funds where she deemed most appropriate.
8:42:11 PM
Representative Crawford inquired the funds could be used for
the Alaska Natural Gas Development Authority (ANGDA). Co-
Chair Hawker reported that it could be used for ANGDA.
Representative Kelly understood that the funds could be used
at the governor's discretion. Co-Chair Hawker clarified it
the intent to make the money available to the governor to
utilize, within parameters, as she deemed fit.
8:43:44 PM
Representative Gara asked how the decision to appropriate
the $9 million was made. Co-Chair Hawker reported that the
governor had requested $9.3 million. The LIHEAP
appropriation was already benchmarked at $9 million, which
aided in the decision. Representative Gara wondered when the
discussion on the amount of the appropriation had taken
place. Co-Chair Hawker believed the discussion had taken
place within the sphere of the administrations specialized
knowledge. Representative Gara requested discussion from the
administration as to what the state would receive for $9
million, and why that specific amount was requested.
8:45:05 PM
Representative Gara voiced concern about the language on
page 63, Line 15. He felt it would allow the administration
to spend state money as a subsidy to a private entity. Co-
Chair Hawker explained that intent is to provide funds to
facilitate progress on in-state gas development.
8:46:40 PM
Representative Gara hoped that there would be more
discussion on the matter. Co-Chair Hawker pointed out that
every year funds are added to departments in the pursuit of
in-state gas development, regardless of progress. He termed
it a policy call. Co-Chair Stoltze added that it was a
pronounced request from the administration.
Co-Chair Hawker pointed out that there are laws to prevent
the administration from giving away assets.
8:47:57 PM
Vice-Chair Thomas requested an audit of ANGDA. Co-Chair
Hawker replied that that was possible. He recommended that
the request be directed to Legislative Budget and Auditing
(LB&A). Vice-Chair Thomas suggested that the audit be done
before the money is given to ANGDA. Co-Chair Hawker noted
the funding is provided directly to the governor's office.
In recognition of the concerns about ANGDA, he reported that
the funds under discussion are entrusted specifically to the
governor. He thought the governor's office would use the
money wisely.
8:50:06 PM
Representative Gara felt that the appropriation was a huge
policy call, with no limitations, and unenforceable intent
language. He thought it should be reconsidered in an open
committee process. He strongly questioned its transparency.
Co-Chair Hawker understood that the governor had stated that
the intent for the $9 million was that it be invested in in-
state gas development.
8:51:32 PM
KAREN REHFELD, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, informed the committee that this
item has been a priority for the governor and has been
discussed in various committees.
LARRY PERSILY, STAFF, CO-CHAIR HAWKER, explained that Harry
Noah, an executive branch employee, has been designated the
governor's in-state gas line coordinator and has been
discussing the issue with as many legislators as possible.
He has presented suggestions as to the best way an in-state
gasline could be developed; discussing timelines, necessary
funds and the right of way permits that would be required.
Representative Gara wondered which legislators Mr. Noah had
spoken to. He understood that the governor presented bills
to the legislature, and that those bills had parameters as
to how the money would be spent. He maintained that the
bills had not passed. He voiced concern that the $9 million
was just an award to the governor's office. He alleged that
full disclosure for use of the funds had not been discussed
with the entire committee before the intent language was
written into the bill.
Ms. Rehfeld reported that Mr. Noah has spent time in the
building talking to lawmakers, and those lawmakers have
confidence in the design and detail that was presented to
them. Co-Chair Hawker added that there had been many
discussions on the issue.
8:55:54 PM
Representative Austerman reported that the administration
had not sent a representative to his office to discuss the
issue. He expressed regret that he had not been better
informed.
Co-Chair Stoltze recalled that Mr. Noah had contacted his
office to discuss the issue.
Co-Chair Hawker communicated his frustration with the
governor's current lack of connection with the legislature.
He felt that she gave the appearance that she was more
concerned with her national ambitions than with what was
transpiring in her home state. He expounded that it was
insulting, personally, and to the people of the state, that
the administration had not followed up with leadership
throughout the building on the issue.
Vice-Chair Thomas stated for the record that no one had
contacted him.
JOE BALASH, INTER-GOVERNMENTAL COORDINATOR, DEPARTMENT OF
NATURAL RESOURCES, reported that the work plan had been
presented in a public manner in the governor's conference
room, as well as broadcast on Gavel to Gavel in early March.
Since that time, Mr. Noah has held several meetings with a
legislative working group, coordinated through the presiding
officers in both bodies. Various documents were distributed
at the meetings, which detailed the work plan by date,
schedule, activity, and approximate budget for each step. He
offered to provide copies of the documents at a later date.
8:59:13 PM
Representative Gara emphasized that while working together
to make the gasline a reality, it was important that the
administration keep the committee informed. He revealed that
he had not heard of the legislative working group mentioned
by Mr. Balash. He wondered if the group had a title. Mr.
Balash replied it had been labeled the "working group" at
administrative meetings. He recalled that, at the meetings
he participated in, there had been legislative
representatives present. He said that he could provide a
list of those present.
Representative Gara requested written documentation of the
administration's plan for the funds, and for a commitment
that the funds would be spent according to the plan. Mr.
Balash related that meetings on the issue had occurred in
early March. At that point, Mr. Noah was introduced by the
governor as her project director. A three part approach was
then laid out; funding had been identified, legislation on
right of way and pipeline acts had been introduced, and
legislation broadening the purpose of the Alaska Natural Gas
Authority. He believed that the administration had been
responsive to points of inquiry.
9:02:05 PM
Representative Gara stated that he had seen Mr. Noah in the
building, but had not spoken to him. He maintained that
there has not been deliberative discussion with all
legislators regarding the plan.
Representative Austerman stated it would have been
appropriate for a representative of the administration to
have briefed committee members on Section 13 of the bill.
9:03:41 PM
Co-Chair Hawker related that the bill is a legislative
budget. The administration did not know this section would
be included. The issue has been in discussion among the Co-
Chairs of both House and Senate Finance and the
administration. Ultimately, the governor's desire prevailed
and the request was included in the budget. He clarified
that the addition of Section 13 was made by the legislature
and not Mr. Balash. Representative Austerman expressed
frustration that the issue had not come up in minority
caucus meetings. Co-Chair Hawker argued that he would not
discuss caucus matters on the table. He voiced his amazement
with the administration's lack of communication with the
other members of the committee.
9:05:50 PM
Ms. Rehfeld communicated that the administration has had the
appropriation in its budget since December 2008. A request
for $5 million was put in specifically for ANGDA in
December. It was then increased to $8 million in the amended
budget. She felt that as the approach to the plan evolved,
the administration had maintained clear communication with
the committee. She added that the governor has been
consistent in her dialogue on in-state gas.
Representative Kelly pointed out that Mr. Noah had spoken to
him about the project. He confirmed that he has also had
discussions with Ms. Rehfeld about the request for ANGDA and
was familiar with the section.
9:07:58 PM
Representative Gara remarked that the earlier request for $5
million for ANGDA, to follow a statutory purpose, had not
caused him alarm. He emphasized that the change grants $9
million to the governor to spend without a statutorily
authorized purpose.
9:09:17 PM
Mr. Balash explained the work plan entails, as a first step,
an alternatives analysis to identify the cost of
transportation and the various routes. In June, information
would be gathered for applying for major permits, including
rights of way. In parallel, the deliverability and reserve
life in Cook Inlet would be evaluated. Ways to make
reserves last longer and the possibility of stop-gap
importation, in order to bridge any gap until natural gas
can be delivered, will also be examined. More funds will
likely be requested in 2010 as the customers and potential
suppliers of gas are identified. The goal is to be in a
position by 2011; to take the collection of major permits
and regulatory approvals, and the identified suppliers and
customers, and present the information to a private party,
who will than construct the gasline. In return, the private
party would reimburse the state for the costs incurred by
the state for the package of permits and regulatory
authorizations.
9:12:56 PM
Representative Austerman pointed out that the change in the
budget would need to be reviewed by the Senate Finance
Committee. He wondered if the section had been discussed in
that body.
Co-Chair Stoltze thought that the Senate leadership would
embrace the idea in order to move forward on in-state gas.
Representative Crawford expressed concern with the switch in
priority from ANGDA based spur line to ENSTAR bullet line.
9:14:05 PM
Mr. Persily pointed out that ANGDA's operating budget is
still funded from previous appropriations and can continue
to operate fully. He shared his understanding that the
additional funding was to ensure, should gas availability
become scarce, that the state will have access to in-state
gas.
Co-Chair Stoltze suggested Mr. Balash talk to any committee
members he may have missed in his first round of meeting on
the issue.
Representative Gara requested binding representation that
legislative approval would be required for any project from
the governor's office concerning the issue.
Mr. Balash asked for clarification as to what kind of
representation would be satisfactory. Representative Gara
suggested a letter from governor ensuring that the state
would get full value for work done on the project, upon
approval of legislature. Mr. Balash agreed to do that. He
perceived that a pipeline would not be built for $9 million.
Co-Chair Hawker related that the legislature has sole
appropriation power.
9:17:37 PM
Representative Foster stated that he had not been invited to
the meetings on the subject. He remarked that many House
members are tied up in committee during the day. He felt and
that the best way to be sure each member has the appropriate
information on a bill was for department heads to go office
to office. He felt that the committee had been caught off
guard by the section.
9:18:40 PM
Representative Kelly felt that the intent language could be
more specific.
9:19:49 PM
Mr. Armstrong returned to explaining changes in the bill.
On Page 79, Line 6 to Page 80, Line 17 there are structural
changes to the legislature's lapsing funds. The
reappropriations are for legislative audit, legislative
council and the legislative operating budget. Limitations
were placed in Section C, Line 24, appropriations for 50th
statehood; display of historical art and artifacts. An
appropriation for statewide energy plans were removed and
put into Section D, which begins on Line 29 of Page 79. He
said that the bill matches the Senate version except the
Senate had some funds going to LBA that are now going to
Legislative Council.
9:21:48 PM
Representative Foster commented on Lines 26 and 27 regarding
Legislative Council. He wondered if it would be possible to
make the work of Legislative Council more accessible to
communities outside of Juneau. Mr. Armstrong suggested
bringing it to the attention of the Legislative Council
chair when they next meet.
Vice-Chair Thomas asked about a statewide energy plan. Mr.
Armstrong said that in the version of the bill sent out by
the other body, there had been $300,000 lined out for a
statewide comprehensive energy plan, to be conducted by
LB&A. The plan was removed, and the funds were rolled back
into section D of the appropriation. Co-Chair Stoltze added
that the item is in the legislative branch and open for
discussion. Vice-Chair Thomas stated that he would rather
hire a state employee for the job, rather than an out-of-
state consultant.
9:23:54 PM
Representative Crawford questioned the language on page 80,
Lines 2 and 3, "for necessary legislative capital projects".
Mr. Armstrong explained that Legislative Council has control
of the building operations during the interim. He added
that it must be an agenda item to expend funds.
Representative Crawford asked for an estimated amount. Mr.
Armstrong said $2 million.
Representative Gara thought that the reapproprations from
LB&A to Legislative Council were excessive. Mr. Armstrong
replied that most of the funds had been expended for the
projects listed in Section 40.
9:27:17 PM
Mr. Armstrong continued to Page 81, Line 25, which lists the
appropriation set out for federal stimulus funds for DHSS
health care services, for a statewide electronic health
information exchange system. The contingent language on Page
84, Line 20, states that SB 133 needs to pass for the
mechanism in Section 43 to be funded.
Mr. Armstrong continued with the final changes to the bill
in Sections 22-39, which correct a series of technical
typos.
Mr. Armstrong explained that additional appropriations had
come in after the March 25, 2009 deadline, and were added to
the bill. He listed reappropriations by district.
9:30:05 PM
Mr. Armstrong noted that the change from Senate to House
Finance funds is outlined on the bottom right hand corner of
Page 2 of the Legislative Finance report.
9:31:05 PM
Representative Salmon asked for clarification on the
appropriation amount listed on Page 67, Lines 5 to 11.
JOHN BITNEY, STAFF, SPEAKER JOHN HARRIS, explained that the
reappropriation request for that district. The original
appropriation to the city of Delta Junction of $1.2 million
was to pay a litigation settlement in a lawsuit with a
private prison developer. Per the appropriation in 2000, the
city was required to pay 50,000 each year out of the city's
revenue sharing. Currently there is an unpaid balance of $1
million on the loan. The original language contained the
contingency that the loan would be forgiven if the community
incorporated as a borough. The new language removes the
contingency.
9:34:33 PM
Representative Kelly asked if the language on Line 28 on
Page 67, extends the LIHEAP general fund increase for two
more years. Co-Chair Hawker replied that it is a single $9
million appropriation to DHSSto be spent between June 30,
2009 and June 30, 2010. Representative Kelly asked it was
in addition to funds given during the 2008 session. Co-Chair
Hawker replied yes.
9:35:59 PM
Mr. Armstrong reported that the Constitutional Budget
Reserve management fees had been removed from the bill and
could be found in the operating budget.
Representative Gara asked if all projects in the bill were
reinstatements of the governor's requests. Mr. Armstrong
said that was correct, except for the cruise ship items.
Representative Gara wondered about Page 63 of the bill,
which details legislative intent on gas line money. He
understood that the funds could be used only for a private
sector project and that the project would go from The North
Slope to Fairbanks and down to the Kenai Peninsula. He
remarked that the project sounded like the ENSTAR project.
Co-Chair Hawker disagreed. He contended that this was the
generic investigation of a bullet line and that many
companies have discussed the possibility of involvement in
the project. He said the funds were to facilitate private
sector construction, ownership and management, and that all
interested in the project are welcome into the discussion.
Representative Gara relayed that he was not interested in a
project headed by ENSTAR.
9:39:12 PM
Representative Fairclough shared that ENSTAR had not talked
to her office.
Mr. Armstrong said that the legislative finance reports will
not show $9 million as those are considered operating
expenditures.
CSSB 75 (FIN) was heard and HELD in Committee for further
consideration.
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