Legislature(2005 - 2006)SENATE FINANCE 532
03/01/2005 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB51 | |
| SB98 | |
| SB97 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 97 | TELECONFERENCED | |
| += | SB 98 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 47 | TELECONFERENCED | |
| += | SB 51 | TELECONFERENCED | |
SENATE BILL NO. 98
"An Act making supplemental appropriations, capital
appropriations, other appropriations, and reappropriations;
amending appropriations; making appropriations to capitalize
funds; and providing for an effective date."
This was the fourth hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken clarified that while department overviews
pertaining to the fast track supplemental bill have concluded,
several amendments from the Governor Frank Murkowski Administration
have been received and would be explained to the Committee. After
the bill was heard, the Committee would recess until late afternoon
in order to allow Members to further review the legislation.
Co-Chair Wilken reviewed the committee substitute work draft
Version 24-GS1133\F and its accompanying spreadsheet dated March 1,
2005 [copies on file], and limited his remarks to those requests to
which changes had been made.
[NOTE: Confusion occurred as to whether the February 7, 2005
spreadsheet [copy on file] or the March 1, 2005 spreadsheet was
being referenced. The following Sections are as depicted in the
February 7, 2005 spreadsheet.]
9:16:53 AM
Department of Commerce, Community and Economic Development
Section: 2(a)
RDU: Community Advocacy
Supplemental Need: Small city energy assistance program
$6,450,000 General Funds
Co-Chair Wilken stated that a change to this Section would be that
the specified $25,000, $50,000, or $75,000 community allocation
would be used to pay toward the community's outstanding debt to the
State's Bulk Fuel Loan Program. Any balance remaining after that
payment could be applied toward the purchase of more fuel, with the
condition that the invoice be submitted to the State. This money
would lapse on June 30, 2005.
Senator Olson understood therefore that a community whose debt
exceeded its allocation would not have funds with which to buy more
fuel.
Co-Chair Wilken replied that that is correct. For example, a
community with an allocation of $50,000 and an outstanding debt of
$126,000, would have $50,000 paid towards its debt.
Senator Olson asked whether any provisions have been included
through which a community could acquire more fuel.
Co-Chair Wilken responded, no.
Department of Corrections
Section: 3(a)
RDU: Office of the Commissioner
Supplemental Need: Support for enhanced correctional officer
and probation officer recruiting efforts in urban and rural
Alaska. Workplace Alaska alone is not bringing enough
applicants. The department will purchase TV and radio spots,
and advertisements in smaller publications in locations such
as Seward, Bethel, Nome, Kenai, Eagle River and Mat-SU.
$50,000 General Funds
Co-Chair Wilken explained that the Department of Corrections would
address the Section 3(a) funding request via the use of available
FY 05 lapsed funds.
AT EASE 9:20:17 AM / 9:20:17 AM
Department of Corrections
Section: 3(b)
RDU: Administrative Services
Supplemental Need: The department is seeking an e-procurement
application to lower purchasing prices and improve
efficiencies within the buying process for commodities,
equipment, food, and services.
$225,000 General Funds
Co-Chair Wilken stated that Section 3(b) was zeroed out with the
understanding that the e-procurement application system being
furthered by the Department of Transportation and Public Facilities
would be successfully developed and implemented in other
departments.
Department of Education and Early Development
Section: 4(b)
RDU: Mt. Edgecumbe Boarding School
Supplemental Need: Residential operating costs related to
expanded student population
$800,000 General Funds
Co-Chair Wilken stated that Section 4(b) has been zeroed out. It
was "quite clear" last year when this issue was initially discussed
that the Committee did not favor such an appropriation. However,
the Administration made the decision to expend the money. Therefore
"it is incumbent upon the Administration to find out how to pay for
it." The Committee has continued to uphold its previous position.
Senator Stedman voiced the expectation that funding for the School
would be included in the FY 06 operating budget.
Co-Chair Wilken remarked that this discussion pertains to the FY 05
supplemental request for the School. Funding is included in the FY
06 regular budget proposal.
Senator Stedman, while recognizing "the merits of the table",
voiced support for retaining the funding request. He acknowledged
the School's funding inclusion in the FY 06 budget.
Department of Environmental Conservation
Section: 5(a)
RDU: Capital
Supplemental Need: Due to safety issues relating to emerging
bioterrorism threats and animal diseases, changes in design
were necessary to meet original intent and provide a safe and
secure laboratory facility. This amendment provides additional
funding to cover those design changes and complete
construction of the new Environmental Health Laboratory
$355,000 General Funds
$500,000 Federal Unrestricted Rcpts
$855,000 Total Funds
Co-Chair Wilken noted that while this request would be fully funded
at the $855,000 level, there would be a fund source change in that
it would be supported entirely with General Funds.
Department of Military and Veterans Affairs
Section: 6(b)
RDU: Disaster Relief Fund
Supplemental Need: Base capitalization of fund $1,000.0; 2004
Bering Strait Sea Storm $4,054.4; Interior Earthquake
shortfall $259.3; and Kaktovik Winter Storm $2,363.5
$7,677,200 General Funds
Co-Chair Wilken stated that the 2004 Bering Straits storm, the
Interior Earthquake shortfall, and the Kaktovik Winter Storm
expenses would be provided for; however, the $1,000,000 base
capitalization request was denied.
Co-Chair Wilken commented that further discussion in this regard
would transpire, as the Department has raised concern regarding the
absence of the capitalization.
[NOTE: Further clarification regarding the spreadsheets occurred.
From this point forward, the March 1, 2005 spreadsheet is
referenced.]
AT EASE 9:24:47 AM / 9:25:44 AM
Co-Chair Wilken stated that in order to avoid further confusion, he
would reference Section numbers in his remarks.
9:26:24 AM
Department of Administration
Section: 7(a)
RDU: Capital
Supplemental Need: AOGCC costs for gas pipeline reservoir
studies and depletion plan evaluations.
$900,000 General Funds
$300,000 Permanent Fund Corporation Receipts
Total Funds: $1,200,000
Department of Law
Section: 7(b)
RDU: Civil Division, Oil, Gas and Mining
Supplemental Need: Legal costs for work related to the state
gas pipeline and to bringing North Slope natural gas to
market, and other oil and gas projects for FY 05 and FY 06.
$6,750,000 General Funds
$2,250,000 Permanent Fund Corporation Receipts
Total Funds: $9,000,000
Department of Natural Resources
Section: 7(c)(1)
RDU: Capital
Supplemental Need: Gas pipeline risk analysis and royalty
issues.
$1,875,000 General Funds
$ 625,000 Permanent Fund Corporation Receipts
Total Funds: $2,500,000
Department of Natural Resources
Section: 7(c)(2)
RDU: Capital
Supplemental Need: Gas Pipeline corridor geologic hazards and
resource evaluation.
$1,500,000 General Funds
$ 500,000 Permanent Fund Corporation Receipts
Total Funds: $2,000,000
Department of Revenue
Section: 7(e)
RDU: Capital
Supplemental Need: Commissioner's Office - Work related to the
state gas pipeline and to bringing North Slope natural gas to
market.
$3,975,000 General Funds
$1,325,000 Permanent Fund Corporation Receipts
Department of Revenue
Section: 7(f)
RDU: Capital
Supplemental Need: Alaska Natural Gas Development Authority
increased workload for gas pipeline
$1,627,500 General Funds
$ 542,500 Permanent Fund Corporation Receipts
Total Funds: $2,170,000
Co-Chair Wilken stated that while these projects would be fully
funded, the recommendation is that the "expenditures be run
through" the Legislative Budget & Audit (LB&A) committee.
Department of Natural Resources
Section 7(d)(1)
RDU: Operating
Supplemental Need: Gas pipeline Bullen Point Road right-of-way
permitting.
$2,400,000 General Funds
$ 800,000 Permanent Fund Corporation Receipts
Total Funds: $3, 200,000
Department of Natural Resources
Section 7(d)(2)
RDU: Operating
Supplemental Need: Division of Oil and Gas increased workload
for gas pipeline.
$2,025,000 General Funds
$ 675,000 Permanent Fund Corporation Receipts
Total Funds: $2,700,000
Department of Natural Resources
Section: 7(d)(3)
RDU: Operating
Supplemental Need: Commissioner's Office increased workload
for gas pipeline.
$150,000 General Funds
$ 50,000 Permanent Fund Corporation Receipts
Total Funds: $200,000
Co-Chair Wilken stated that Sections 7(d)(1), 7(d)(2), and 7(d)(3)
would be funded and would include a provision of an FY 06 lapse
date. These requests would not be addressed through LB&A. He
recalled that, three years prior, expenditures associated with
another resource development project had been addressed through
LB&A and, as per Senator Gene Therriault, LB&A chair that "worked
out fine." LB&A has assured him that routing the gas pipeline
expenditures through LB&A would not slow the State's gas pipeline
efforts.
Co-Chair Green noted that utilizing Permanent Fund Corporation
receipts in this fashion is not a new process and has been utilized
many times in the past.
Co-Chair Wilken expressed that the use of Permanent Fund
Corporation receipts as the designated Other Funds for resource
development project such as the gas pipeline is a funding
investment that would be reimbursed back into the Permanent Fund
were the project successful. The gas pipeline funds would amount to
25-percent, or approximately $7,100,000, of the overall funding
request. Therefore, this request has a Fund Source change in that
General Funds would be partially replaced with Permanent Fund
Corporation receipts.
Senator Olson understood that Permanent Fund earnings would be
utilized as a funding mechanism for the gas pipeline requests.
Co-Chair Wilken affirmed. "We've done that in the past for resource
development issues that come back in resource development
receipts."
Senator Stedman asked for confirmation that this would be the
Permanent Fund Earnings Reserve Account.
Co-Chair Wilken replied that, "technically, its Corporation
receipts," but it is the Earnings Reserve Account.
Co-Chair Green noted that this would be "in the same relationship
as the deposit would be made from Revenue."
Co-Chair Wilken communicated that it would be 25-percent, with the
knowledge that the 25 percent would be returned. "That investment
will pay itself off in multiples."
Office of the Governor
Section: 8
RDU: Arctic National Wildlife Refuge
Supplemental Need: Funds for support of national efforts to
open ANWR for oil and gas exploration and development.
$375,000 General Funds
$125,000 Permanent Fund Corporation Receipts
Total Funds: $500,000
Co-Chair Wilken stated that, similarly to the gas pipeline funding,
Permanent Fund Corporation Receipts would be utilized to partially
fund efforts to open the Arctic National Wildlife Refuge (ANWR).
[NOTE: The following Section is as depicted in the February 7, 2005
spreadsheet.]
Department of Health and Social Services
Section: 9(c)
RDU: Health Care Services: Women's and Adolescents Services
Supplemental Need: Feds reduced FFY 05 funding in the Breast
and Cervical Cancer screening program. The fund source change
will allow services to 1600 enrolled women that otherwise
would not be served due to federal funding reductions. Funds
will be required by late March or early April to continue the
program.
$500,000 General Funds
($500,000) Federal Funds
Total Funds: 0.0
Co-Chair Wilken stated that Section 9(c) was not funded for the
three reasons: in an effort to reduce costs, the Department is
being asked "to raise the threshold of acceptance for those women
that are at risk" to 40 years of age rather than accepting any
female, regardless of age; further clarification as to whether the
federal funds being eliminated were specifically directed to breast
and cervical cancer support or were a general erosion of federal
funds of which the Department chose to remove from this program;
and finally, as reflected in the Committee's recent adoption of
Amendment #1 for SB 51, the desire is to further clarify that,
rather than the expectation being that the State would
automatically offset further diminished federal funding of programs
with general funds, re-evaluation of such an affected program
should occur.
[NOTE: The following request is as depicted in the March 1, 2005
spreadsheet.]
Department of Military and Veterans Affairs
Section: 11
RDU: National Guard Military Headquarters
Supplemental Need: National Guard Audit Disallowance - Federal
auditors have disallowed state expenditures in FFY 05 for a
total of $937,234. This request will cover October 2004 to
June 2005. An amendment will be offered in the FY 06 budget to
cover these expenditures for the remainder of FFY05 and FFY
06. The department estimates they will run out of general
funds by the end of March.
$297,300 General Funds
Co-Chair Wilken noted that the original $446,000 request has been
pared down to $297,300, as it was determined that this level would
be sufficient to address FY 05 actual needs. The FY 06 budget would
address FY 06 funding requirements.
Co-Chair Wilken expressed that this would conclude the changes made
to SB 98. The original SB 98 General Fund request amounted to
$97,082,200; this amount has been reduced to $87,656,000. Federal
funds would amount to $99,380,800 and Other Funds would amount to
$24,492,000 for a total amount of $211,529,700. These amounts are
depicted on the March 1, 2005 spreadsheet.
Co-Chair Wilken requested the Committee to review the Version "F"
committee substitute, and submit any proposed amendments by three
o'clock. The intent is that the Committee would recess and
reconvene later in the day to further address the bill.
Co-Chair Wilken ordered the bill HELD in Committee.
AT EASE: 9:33:50 AM / 9:33:53 AM
SENATE BILL NO. 98
"An Act making supplemental appropriations, capital
appropriations, other appropriations, and reappropriations;
amending appropriations; making appropriations to capitalize
funds; and providing for an effective date."
Co-Chair Wilken stated that the bill is again before the Committee
in order to hear information regarding the Administration's
proposed amendments to SB 98. The amendments are detailed in a
handout dated February 28, 2005 from Cheryl Frasca, Director, the
Office of Management and Budget addressed to the House and Senate
Finance Committee Co-Chairs [copy on file]. Upon the conclusion of
the overview, the amendments would be incorporated into a
forthcoming committee substitute.
CHERYL FRASCA, Director, Office of Management and Budget, Office of
the Governor, stated that the proposed amendments would amount to
approximately $9.5 million in general funds, five million dollars
in Other Funds, and $8.7 million in Federal Funds. She reviewed the
requests depicted in the handout as follow.
FAST TRACK SUPPLEMENTAL AMENDMENTS
Amend. Sec. 1, Department of Administration, by adding new
subsections to read:
(b) The sum of $5,003,000 is appropriated from the
information services fund to the Department of Administration
for State of Alaska network security infrastructure upgrades.
KEVIN BROOKS, Deputy Commissioner, Department of Administration,
reminded the Committee that the State experienced "a cyber attack
on its network system in mid-January" 2005. This event has
underscored the fact that efforts must be advanced "to solidify"
the State's telecommunications and Information Technology
infrastructure, and therefore, while $17 million was included in
the Department's original FY 06 request to address this and other
things, $5 million is being requested via this legislation to
immediately address network deficiencies. He noted that federal
agencies are involved in the investigation regarding the January
attack.
Co-Chair Wilken asked how the inclusion of this request in SB 98
would affect the Department's FY 06 network security budget
request.
Mr. Brooks stated that were this request included in the
supplemental bill, a $12 million request rather than a $17 million
request would be included in the FY 06 Capital budget.
(c) The sum of $6,175,000 is appropriated from the
general fund to the Department of Administration for Alaska
land mobile radio (ALMR) infrastructure upgrades.
9:38:36 AM
Mr. Brooks explained that this new $6.1 million general fund
request would provide infrastructure upgrades to the Alaska Land
Mobile Radio project (ALMR), which is a joint project being
conducted with the federal Department of Defense (DOD). There are
approximately 87 radio sites located between Kodiak and Fairbanks,
which provide communications for voice data video. The request
would provide enhanced service to the Department of Public Safety,
the Department of Military and Veterans Affairs, and the Department
of Administration to fulfill the State's obligation regarding its
agreement with DOD "to shore up this network."
Mr. Brooks stated that this money would allow the State to meet
some May 2005 contractual deadlines. A similar amount of money
would be requested in the FY 06 budget to continue these upgrades.
The federal government has provided approximately $43 million to
purchase equipment for these sites, and in addition, has pledged an
additional $100 million investment in this regard.
Senator Dyson asked how this request would impact the FY 06 budget.
Mr. Brooks stated that the total ALMR funding would amount to
approximately $12,400,000. Were this request granted, the
$6,400,000 balance would be included in the FY 06 capital budget.
Senator Dyson surmised therefore that this six million dollar
increment would be in addition to the Department of Military and
Veterans Affairs' proposed FY 06 budget.
Mr. Brooks clarified that this request would be included in the
Department of Administration's FY 06 capital budget.
Ms. Frasca noted that a budget amendment to this effect was
recently submitted.
Mr. Brooks expressed that while work on the ALMR project has been
conducted for several months, the request was not been submitted
earlier as details were too vague.
Senator Olson asked what benefits would be provided by the
upgrades.
Mr. Brooks explained that each of the sites, ranging from road to
mountaintop sites, has a communications tower and an approximate
ten by twenty foot housing structure for the radio equipment,
generators, and batteries. The current equipment is old and must be
updated for compatibility and security reasons. An upcoming
military exercise would require communication component
enhancements that would be supplied by the military.
Senator Olson asked the reason State funding is being requested if
the federal government is supplying the equipment.
Mr. Brooks expressed that the military would be supplying equipment
specific to their needs. The State funds being requested would
provide for the upgrades for the multitude of State agencies that
utilize the network. This would include first responders, the
Department of Transportation and Public Facilities, the Department
of Health and Social Services, and the Alaska Railroad. Once the
upgrades were in place, DOD would further commit to paying for on-
going operating and maintenance expenses associated with these
sites.
Co-Chair Wilken understood that the reason this amendment is being
proposed "is because the federal government did something to
jumpstart us."
Mr. Brooks replied "not exactly". The agreement between the State
and DOD has existed for several years. The driving force behind
this amendment is to coordinate the needs of the various State
departments and DOD and to upgrade "42 of the most critical sites"
in order to have them tested and functioning before the beginning
of the August 2005 military exercise. The request was delayed in
order to provide updated and accurate information.
Co-Chair Wilken stated that, considering the amount of money
involved, an ALMR briefing would be appreciated.
Mr. Brooks stated that a briefing could be conducted.
Amend sec. 6, Fund Transfers, by amending subsection (a) and
adding a new subsection to read:
(a) The sum of $10,004,200 [$6,813,300] is appropriated
from the general fund to the Alaska marine highway system fund
(AS 19.65.060(a)).
Ms. Frasca stated that this amendment would increase the general
fund appropriation to the Alaska Marine Highway System Fund to
provide for the monetary terms of the Inlandboatmen's Union of the
Pacific contract, which is further specified in Amendment sec. 13
on page two of the handout. Approximately $3.2 million would be
required to address the costs of the FY 05 contract. Two sections
in the Administration's amendments pertain to this contract.
Co-Chair Wilken noted that the packet contains a January 26, 2005
memorandum [copy on file] from Ray Matiashowski, Commissioner of
the Department of Administration to Senate President Senator Ben
Stevens regarding the specifics of the contract.
(c) The sum of $5,003,500 is appropriated from proceeds
of the State of Alaska master lease line of credit program to
the information services fund (AS 44.21.045(a)) for purposed
of financing the following Department of Administration fiscal
year 2005 capital project request:
PROJECT AMOUNT
State of Alaska Infrastructure $5,003,500
Network Security Upgrades
Ms. Frasca stated that Sec. 6, subsection (c) relates to the
financing mechanism being proposed to pay for the five million
dollars of network security infrastructure upgrades previously
discussed in Amend. Sec. 1, subsection (b). This line of credit,
which had been included in the FY 06 budget, would be moved forward
to fund FY 05 network expenses with the intent to bill agencies
through the "EPR rate" in order to access both "State and non-State
fund sources to repay this line of credit over time."
Co-Chair Wilken understood that this money was part of the original
$17 million request.
Ms. Frasca affirmed.
Amend sec. 8, Office of the Governor, by adding a new
subsection to read:
(b) The sum of $160,000 is appropriated from the general
fund to the Office of the Governor, division of elections, for
increased costs for the fiscal year ending June 30, 2005.
Ms. Frasca stated that this amendment would provide funds to the
Division of Elections to address increased costs associated with
such things as the AccuVote voting machines maintenance and lease
cost increases in FY 05. Postage and shipping costs, unassociated
with separate Division of Election legislation that had previously
reported from Committee, would also be provided for.
Amend sec. 13, Salary and Benefit Adjustments, by adding new
subsections to read:
(d) The sum of $3,190,000 is appropriated from the Alaska
marine highway system fund (AS 19.65.060(a)) to the Department
of Transportation and Public Facilities, marine vessel
operations, in order to implement the monetary terms of the
collective bargaining agreement for the Inlandboatmen's Union
of the Pacific, representing the unlicensed marine unit, for
the fiscal year ending June 30, 2005.
(e) If the appropriation made by (d) of this section
takes effect, it takes effect on the date the collective
bargaining agreement listed in (d) of this section is ratified
by the membership of the respective collective bargaining
unit.
Ms. Frasca stated that this request would address FY 05 expenses
associated with the collective bargaining agreement for the
Inlandboatmen's Union of the Pacific, which was previously
discussed. "This is the actual appropriation from the Marine
Highway System Fund to make those payments."
Amend sec. 15(a), Department of Transportation and Public
Facilities Federal Projects, to read:
Sec. 15. DEPARTMENT OF TRANSPORTATION AND PUBLIC
FACILITIES FEDERAL PROJECTS. (a) The appropriation to the
Department of Transportation and Public Facilities for
the Airport Improvement Program made by sec. 1, ch. 159,
SLA 2004, page 35, line 22, is increased by appropriating
from federal receipts an additional
$14,285,000[$5,850,000], to be allocated as follows:
(1) Kotzebue: Obstruction Removal and
Safety Area (HD 40) $5,300,000
(2) Tenakee Springs: Seaplane Float
Rehabilitation (AD 5) 550,000
(3) Cold Bay: Airport Terminal Master
Plan (HD 37) 200,000
(4) Deadhorse: Airport Runway Safety
Area Expansion (HD 40) 8,000,000
(5) Unalaska: Airport Terminal Master
Plan and Improvements (HD 37) 500,000
Ms. Frasca stated that this is the Administration's final amendment
to the Fast Track Supplemental bill. These three capital projects
being added could get underway in March or April 2005, provided the
authorization is given to spend the federal funds early.
Co-Chair Wilken calculated that the State would be realizing an
additional nine million dollars in federal funding.
Ms. Frasca deferred to the Department of Transportation and Public
Facilities in order to ascertain whether this would be additional
funding.
Co-Chair Wilken asked whether funding for this request would
replace other projects.
NANCY SLAGLE, Director, Division of Administrative Services,
Department of Transportation and Public Facilities, stated that
this amendment regards federal airport improvement funding. Some of
the funding is discretionary in that it is additional funding that
was made available to the State from the Federal Aviation
Administration (FAA). Approval of this amendment would not result
in replacing any other funds that the Department would receive in
its regular entitlement program.
Co-Chair Wilken asked regarding the reference to HD 40 and HD 5.
Ms. Frasca clarified that "HD" is a reference to House District.
Amend sec. 17(a), Lapse of Appropriation, to read:
(a) The appropriations made by secs. 1(b), 1(c), 7(a),
7(c), 7(d), and 7(e) of this Act are for capital projects and
lapse under AS 37.25.020.
Ms. Frasca expressed that this technical amendment would specify
that the funds being requested in Section 1(b) and 1(c) for the
ALMR and network security upgrade requests would not lapse.
Ms. Frasca stated that this concludes the Administration's
amendments to the Fast Track Supplemental bill.
Co-Chair Wilken ordered the bill HELD in Committee.
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