Legislature(1999 - 2000)

04/07/2000 09:09 AM Senate FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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SENATE BILL NO. 192                                                                                                             
"An Act making and amending capital appropriations and                                                                          
reappropriations and capitalizing funds; and providing                                                                          
for an effective date."                                                                                                         
                                                                                                                                
                                                                                                                                
Co-Chair Torgerson announced the Committee would be hearing                                                                     
a report from the Capital Budget Subcommittee and if the                                                                        
report were adopted, a committee substitute would be                                                                            
drafted and distributed. He continued saying the deadline                                                                       
for amendments to the capital budget legislation would be                                                                       
the following Monday at 3:00 PM.                                                                                                
                                                                                                                                
Senator Donley, chair of the Capital Budget Subcommittee,                                                                       
talked about the relatively new process of addressing                                                                           
capital budget requests in a subcommittee setting. He                                                                           
listed the membership of the subcommittee as Senator                                                                            
Torgerson, Senator Wilken, Senator Adams and himself. He                                                                        
stated that Senator Leman also participated in some of the                                                                      
subcommittee meetings in the place of Senator Adams.                                                                            
                                                                                                                                
Senator Donley shared that the proposal from the                                                                                
subcommittee was to utilize $138,474,201. Those funds are a                                                                     
combination of approximately $80 million general funds,                                                                         
$18.5 million Alaska Industrial Development and Export                                                                          
Authority (AIDEA) dividend funds and $39 million Alaska                                                                         
Housing Finance Corporation (AHFC) funds, he said. He noted                                                                     
that the total amount is $15,679,932 less than the previous                                                                     
year's enacted capital spending and over $33 million less                                                                       
than the governor's requested funding level.                                                                                    
                                                                                                                                
Senator Donley told that the subcommittee was assigned the                                                                      
task of assisting in making reductions to the operating                                                                         
budget to reach the targeted goal of $30 million. He                                                                            
stressed that the subcommittee was faced with reducing the                                                                      
governor's requested budget increase as well as reducing                                                                        
the amount of funds spent in the previous fiscal year.                                                                          
                                                                                                                                
Senator Donley conveyed the priorities and criteria                                                                             
established by the subcommittee for project evaluation of                                                                       
the proposed capital items. These, he said, included                                                                            
whether the project was life, safety or health related,                                                                         
school education related, was eligible for unique and                                                                           
special federal funding sources and met deferred                                                                                
maintenance needs. He continued listing criteria as whether                                                                     
the funding request was for essential completion of a                                                                           
phased project, met critical administrative needs, and                                                                          
whether the project would have a high level of use to                                                                           
maximize benefit to the greatest number of users. He stated                                                                     
that none of the criteria was considered by itself and that                                                                     
the criteria had changed some from the previous year.                                                                           
                                                                                                                                
Senator Donley added that the subcommittee attempted to not                                                                     
include projects that were not requested by the State Of                                                                        
Alaska and also to avoid projects where the state was asked                                                                     
to provide funding for projects requested by other                                                                              
governmental entities.                                                                                                          
                                                                                                                                
Senator Donley qualified that the subcommittee did try to                                                                       
approve funding for projects that could reduce future                                                                           
operating budget expenses. He gave examples of capital                                                                          
projects that provided more efficient record keeping and                                                                        
case-management tracking.                                                                                                       
                                                                                                                                
Senator Donley continued that to stay within the funding                                                                        
allocation goals, the subcommittee could not approve all                                                                        
the requested projects that met those criteria. He stressed                                                                     
that the subcommittee did attempt to rate the projects to                                                                       
include those that would have the most benefit.                                                                                 
                                                                                                                                
Senator Donley relayed that the subcommittee did not                                                                            
attempt to remedy the on-going problems with the Department                                                                     
of Transportation and Public Facilities Statewide                                                                               
Transportation Improvement Program (STIP) process. He said                                                                      
this was because it was felt that decisions related to                                                                          
these projects should be made by the full Senate Finance                                                                        
Committee.                                                                                                                      
                                                                                                                                
Senator Donley also reported that the subcommittee did not                                                                      
consider Grant Anticipation Revenue Vehicles (GARVEE) bonds                                                                     
as a funding source for capital projects.                                                                                       
                                                                                                                                
SENATOR LYMAN HOFFMAN was invited to join the Committee to                                                                      
speak for the Senate Minority on behalf of Senator Adams                                                                        
who was not present.                                                                                                            
                                                                                                                                
Senator Hoffman spoke to an issue raised at the                                                                                 
subcommittee level concerning the stated intent to try to                                                                       
obtain the maximum amount of federal matching funds as                                                                          
possible. He regarded most of the projects meeting this                                                                         
criteria were economic development projects. He believed                                                                        
this year was the first in five or six years that this                                                                          
criterion was not applied to consideration of funding                                                                           
projects.                                                                                                                       
                                                                                                                                
Senator Hoffman then expressed concerns about the confusion                                                                     
over which document the subcommittee was working from. He                                                                       
came to the conclusion that the original version of SB 192                                                                      
was what the subcommittee was using. He reached this                                                                            
conclusion after asking the subcommittee chair the direct                                                                       
question and was told on the record that the original SB
192 was before the subcommittee. He stated that he would                                                                        
have objected to the adoption of the governor's amended                                                                         
version of SB 192 due to the omission of several rural                                                                          
projects.                                                                                                                       
                                                                                                                                
Senator Hoffman talked about the impacts on rural projects                                                                      
contained in each version. He wanted to make sure all of                                                                        
the important projects receive funding.                                                                                         
                                                                                                                                
Senator Hoffman spoke to the governor's amended request                                                                         
saying he did not think that the added STIP projects                                                                            
followed a fair public process in being included in the                                                                         
updated version.                                                                                                                
                                                                                                                                
Co-Chair Torgerson stated that he had a side-by-side                                                                            
spreadsheet prepared by the Division of Legislative Finance                                                                     
that compared GARVEE bonds related to the STIP. He said he                                                                      
was trying to obtain information from the Administration as                                                                     
to what projects properly belong in the STIP.                                                                                   
                                                                                                                                
Co-Chair Torgerson spoke to frustrations the Committee has                                                                      
had with the Department of Transportation and Public                                                                            
Facilities in having the directions given by the                                                                                
legislature followed. He shared that he intended to remedy                                                                      
the situation. He went into detail about the federal                                                                            
funding allocated by the legislature to certain projects                                                                        
that the department refuses to undertake saying they do not                                                                     
rank high enough.                                                                                                               
                                                                                                                                
Senator Leman clarified that Senator Hoffman suggested that                                                                     
if certain projects were not funded this year they would                                                                        
"drop off the list" of eligibility for federal funding. He                                                                      
understood that they would not be dropped, but only be                                                                          
delayed a year or so.                                                                                                           
                                                                                                                                
Senator Hoffman conceded these projects could get funding                                                                       
in the future but that it was not fair that they be dropped                                                                     
after six years and supplanted by other projects that have                                                                      
not been on the STIP.                                                                                                           
                                                                                                                                
Co-Chair Torgerson told Senator Hoffman that he hoped the                                                                       
Minority member would share those concerns with the                                                                             
Department of Transportation and Public Facilities, who                                                                         
made those decisions.                                                                                                           
                                                                                                                                
Senator Donley emphasized the serious concerns with the                                                                         
entire STIP process as implemented by the Department of                                                                         
Transportation and Public Facilities. He questioned the                                                                         
constitutionality of the process. He stressed that the                                                                          
matter was more complicated than it seemed and expressed                                                                        
his desire that the Committee work to change the process.                                                                       
                                                                                                                                
Co-Chair Torgerson announced that a committee substitute                                                                        
would be drafted to incorporate the recommendations of the                                                                      
subcommittee. He stated his intent to use AIDEA funds to                                                                        
pay for a portion of the capital projects.                                                                                      
                                                                                                                                
Co-Chair Torgerson ordered the bill HELD in Committee.                                                                          
                                                                                                                                

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