Legislature(2011 - 2012)SENATE FINANCE 532

03/14/2012 01:00 PM FINANCE


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01:00:23 PM Start
01:06:12 PM SB160
02:06:01 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 192 OIL AND GAS PRODUCTION TAX RATES TELECONFERENCED
Scheduled But Not Heard
+ Bills Previously Heard/Scheduled TELECONFERENCED
= SB 160 BUDGET: CAPITAL
Heard & Held
                 SENATE FINANCE COMMITTEE                                                                                       
                      March 14, 2012                                                                                            
                         1:00 p.m.                                                                                              
                                                                                                                                
1:00:23 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair  Stedman   called  the  Senate   Finance  Committee                                                                    
meeting to order at 1:00 p.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Lyman Hoffman, Co-Chair                                                                                                 
Senator Bert Stedman, Co-Chair                                                                                                  
Senator Johnny Ellis                                                                                                            
Senator Dennis Egan                                                                                                             
Senator Donny Olson                                                                                                             
Senator Joe Thomas                                                                                                              
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Les  Campbell, Director  of Budget,  Alaska Housing  Finance                                                                    
Corporation,   Department   of  Revenue;   Stacy   Schubert,                                                                    
Director, Governmental Relations  and Public Affairs, Alaska                                                                    
Housing  Finance Corporation,  Department  of Revenue;  John                                                                    
Anderson,  Weatherization  Project   Officer,  Research  and                                                                    
Rural  Development,  Alaska   Housing  Finance  Corporation,                                                                    
Department   of  Revenue;   Joseph  Masters,   Commissioner,                                                                    
Department   of  Public   Safety;  Dan   Spencer,  Director,                                                                    
Division  of Administrative  Services, Department  of Public                                                                    
Safety.                                                                                                                         
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
SB 160    BUDGET: CAPITAL                                                                                                       
                                                                                                                                
          SB 160 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
                                                                                                                                
#sb160                                                                                                                        
SENATE BILL NO. 160                                                                                                           
                                                                                                                                
     "An Act  making and amending  appropriations, including                                                                    
     capital   appropriations   and  other   appropriations;                                                                    
     making   appropriations   to  capitalize   funds;   and                                                                    
     providing for an effective date."                                                                                          
                                                                                                                                
DEPARTMENT OF REVENUE                                                                                                         
                                                                                                                                
RN 6347                                                                                                                         
AHFC Housing and Urban Development Federal HOME Grant                                                                           
$4,050,000                                                                                                                      
                                                                                                                                
LES  CAMPBELL, DIRECTOR  OF BUDGET,  ALASKA HOUSING  FINANCE                                                                    
CORPORATION,  DEPARTMENT  OF  REVENUE, explained  that  this                                                                    
project  utilizes  Federal   (HUD)  and  Corporate  matching                                                                    
(AHFC) funds  for the  HOME Investment  Partnership Program.                                                                    
The purpose of  the HOME program is to expand  the supply of                                                                    
affordable,  low   and  moderate-  income  housing   and  to                                                                    
strengthen  the  state's  ability to  design  and  implement                                                                    
strategies to  achieve an adequate  supply of  safe, energy-                                                                    
efficient,  and  affordable  housing.  The  Municipality  of                                                                    
Anchorage has their own separate HOME program.                                                                                  
                                                                                                                                
RN 6342                                                                                                                         
AHFC Housing and Urban Development Capital Fund Program                                                                         
$3,200,000                                                                                                                      
                                                                                                                                
Mr. Campbell  stated that the  Federal (HUD)  grant provides                                                                    
Public Housing  Authorities (PHAs)  with funds each  year to                                                                    
help  renovate  and  modernize  public  housing  units.  The                                                                    
annual   Capital   Fund   Program  (CFP)   fund,   including                                                                    
Replacement  Housing Factor  (RHF) funds,  was approximately                                                                    
$2.8  million  this  fiscal year.  The  current  request  is                                                                    
intended to  cover the spending  authority required  for the                                                                    
amount of  funds anticipated next year,  including any other                                                                    
incentives that may  be available as a  high performing PHA.                                                                    
The  Federal  government,  through the  U.S.  Department  of                                                                    
Housing  and Urban  Development  (HUD),  provides PHAs  with                                                                    
money each year to help  renovate and modernize their public                                                                    
housing  through the  Capital Fund  Program. To  access this                                                                    
money, each  PHA, with the  active involvement  of residents                                                                    
and   local    government   officials,   must    develop   a                                                                    
comprehensive   (five-year)  plan   detailing  modernization                                                                    
needs within the PHA's housing  inventory and establishing a                                                                    
timetable for meeting those needs.  The dollar amount of the                                                                    
annual grant is  established by a formula  using the number,                                                                    
configuration, and  size of  the PHA's  low rent  units. The                                                                    
annual   grant  also   provides  funds   for  administrative                                                                    
expenses,       tenant-education       projects,       drug-                                                                    
elimination/safety  projects,  and management  improvements.                                                                    
Projects funded by this year's  request include: a set aside                                                                    
for   the   San   Roberto   Redevelopment;   renovation   or                                                                    
replacement of various public  housing units statewide; code                                                                    
compliance  issues; and  energy  audits.  Also included  are                                                                    
funds  to  provide  operation and  management  improvements,                                                                    
such as PHA staff  training; resident training; training for                                                                    
low-income  businesses;  and  upgrades  to  the  information                                                                    
system  and  area-wide  network  enhancements  at  low  rent                                                                    
developments.                                                                                                                   
                                                                                                                                
RN 6348                                                                                                                         
AHFC Federal and Other Competitive Grants                                                                                       
$4,500,000                                                                                                                      
                                                                                                                                
Mr.  Campbell announced  that this  request  is for  Federal                                                                    
Housing  and Urban  Development  (HUD)  and Corporate  match                                                                    
(AHFC)  funds which  allows  AHFC to  apply  for HUD,  other                                                                    
federal agency,  and private  foundation grants  that target                                                                    
the  housing needs  of low-income  and special  needs groups                                                                    
such as: senior citizens, the  mentally ill, disabled or the                                                                    
homeless. In cases where grants  require a match, AHFC funds                                                                    
will be used  to the extent necessary.  Grant funds received                                                                    
are often  passed through to local  nonprofit organizations.                                                                    
The purpose  of the program  is to  allow AHFC to  apply for                                                                    
HUD,  other federal  agency, and  private foundation  grants                                                                    
that  target the  housing needs  and supportive  services of                                                                    
low-income  and   special  needs  groups  such   as:  senior                                                                    
citizens,  the  mentally,   physically,  or  developmentally                                                                    
disabled, or the homeless. AHFC  will also apply for energy-                                                                    
related  grants as  they relate  to housing.  When required,                                                                    
AHFC will  provide the  needed matching  funds. Some  of the                                                                    
funds  received will  be passed  through to  local nonprofit                                                                    
sub-grantee  organizations   that  deliver   housing  and/or                                                                    
services.                                                                                                                       
                                                                                                                                
RN 6350                                                                                                                         
AHFC Competitive Grants for Public Housing                                                                                      
$1,000,000                                                                                                                      
                                                                                                                                
Mr.  Campbell  declared that  this  request  is for  Federal                                                                    
Housing  and Urban  Development  (HUD)  and Corporate  match                                                                    
(AHFC) grant funds.  AHFC will apply for  grants that target                                                                    
the housing  needs of  low income  and special  needs groups                                                                    
such as: senior citizens, the  mentally ill, disabled or the                                                                    
homeless. AHFC will also apply  for energy-related grants as                                                                    
they  relate to  housing. When  required, AHFC  will provide                                                                    
the needed matching funds. Some  of the grant funds received                                                                    
will  be  passed  through  to  local  nonprofit  sub-grantee                                                                    
organizations  that  deliver  housing and/or  services.  The                                                                    
request stated that  AHFC will apply for  grants and utilize                                                                    
those  grant  funds  to  target  services  to  families  and                                                                    
persons  who   are  eligible  for  public   and/or  assisted                                                                    
housing. Grant  funds within  this category  may be  used to                                                                    
prevent  and  reduce crime  and  substance  abuse in  public                                                                    
housing and to aid  PHD-assisted families to attain economic                                                                    
self-sufficiency. When  required as a condition  of funding,                                                                    
AHFC  may provide  the needed  match.  Examples of  previous                                                                    
grantors  include the  Robert Wood  Johnson Foundation,  the                                                                    
Dept.  of  Education,  U.S.  Dept.   of  Housing  and  Urban                                                                    
Development,  and  the  U.S.   Dept.  of  Health  and  Human                                                                    
Services.                                                                                                                       
                                                                                                                                
1:06:12 PM                                                                                                                    
                                                                                                                                
RN 45389                                                                                                                        
AHFC Statewide ADA Improvements                                                                                                 
$500,000                                                                                                                        
                                                                                                                                
Mr.  Campbell stated  that Corporate  (AHFC)  funds will  be                                                                    
used to  address accessibility upgrades identified  by a HUD                                                                    
Fair Housing  Inspection dated September 2006.  The upgrades                                                                    
are to  be made over a  five-year period to comply  with ADA                                                                    
and  Section  504  requirements of  a  Voluntary  Compliance                                                                    
Agreement (VCA)  recently negotiated with HUD.  This request                                                                    
will   provide  funding   to  continue   the  upgrades   for                                                                    
accessibility  to   the  AHFC  Family   Investment  Centers,                                                                    
dwelling   units,   and   common  areas   for   family   and                                                                    
senior/disabled  housing to  comply with  the HUD  Voluntary                                                                    
Compliance  Agreement  (VCA).  AHFC   was  subjected  to  an                                                                    
inspection by  HUD in September  2006 for  accessibility for                                                                    
individuals with  disabilities. A report dated  October 2006                                                                    
was received  by AHFC on  September 27, 2007,  which details                                                                    
compliance  issues at  six  specific residential  properties                                                                    
chosen  randomly  in  Anchorage   and  Fairbanks  and  their                                                                    
respective  Family Investment  Centers.  The report  details                                                                    
requirements   to   upgrade   parking   spaces,   sidewalks,                                                                    
wheelchair  ramps,  kitchens,  bathrooms,  entry  doors  and                                                                    
appliances  in  AHFC  offices, common  areas,  and  dwelling                                                                    
units. A  VCA has  been negotiated with  HUD to  address the                                                                    
accessibility issues over the  course of a five-year program                                                                    
where AHFC is expected to  upgrade a minimum number of units                                                                    
to satisfy the terms of  the VCA with HUD. Implementation of                                                                    
these  accessibility  upgrades will  increase  accessibility                                                                    
for individuals with  disabilities, allow for aging-in-place                                                                    
for seniors  and allow  AHFC to  comply with  all applicable                                                                    
federal  regulations.  Implementing  these tasks  will  also                                                                    
allow  AHFC to  remain in  compliance with  HUD mandates  to                                                                    
maintain accessibility.                                                                                                         
                                                                                                                                
RN 37918                                                                                                                        
AHFC Housing Loan Program                                                                                                       
$6,000,000                                                                                                                      
                                                                                                                                
Mr. Campbell explained that this  project will provide funds                                                                    
to  supplement the  Corporation's  popular housing  programs                                                                    
through  gap funding.  Funding will  allow AHFC  to continue                                                                    
current programs and expand  business opportunities with new                                                                    
Teacher  Housing, Health  Professionals,  Public Safety  and                                                                    
Village  Public   Safety  Officers  housing   programs.  The                                                                    
purpose  of  this  program  is to  provide  gap  funding  to                                                                    
increase  homeownership and/or  rental units  throughout the                                                                    
state.  This program  is designed  to help  retain desirable                                                                    
professionals in high-cost areas.                                                                                               
                                                                                                                                
RN 49395                                                                                                                        
AHFC  Teacher,  Health,   and  Public  Safety  Professionals                                                                    
Housing                                                                                                                         
$5,000,000                                                                                                                      
                                                                                                                                
Mr. Campbell stated that this  project will provide funds to                                                                    
supplement  the   Corporation's  popular   housing  programs                                                                    
through  gap  funding.  These  funds   will  allow  AHFC  to                                                                    
continue current programs  and expand business opportunities                                                                    
with new  Teacher Housing, Health Professionals,  and Public                                                                    
Safety   housing   programs.   One   million   dollars   are                                                                    
specifically  set  aside  through   an  allocation  for  the                                                                    
Village Public Safety Officer's (VPSO) program.                                                                                 
                                                                                                                                
RN 49369                                                                                                                        
AHFC Village Public Safety Officers Housing                                                                                     
$1,000,000                                                                                                                      
                                                                                                                                
Mr. Campbell explained that this  project will provide funds                                                                    
to  supplement the  Corporation's  popular housing  programs                                                                    
through gap funding.  These funds will allow  AHFC to expand                                                                    
business   opportunities    with   new    housing   programs                                                                    
specifically set aside for rural public safety personnel.                                                                       
                                                                                                                                
Co-Chair Stedman  asked for a  clarification on  where there                                                                    
were problems in the Village  Public Safety Officer housing.                                                                    
Mr.  Campbell responded  that there  was a  partnership with                                                                    
the Department  of Public Safety (DPS),  and provide funding                                                                    
to help DPS in some projects.                                                                                                   
                                                                                                                                
RN 52598                                                                                                                        
AHFC Energy Programs                                                                                                            
$51,500,000                                                                                                                     
                                                                                                                                
Mr. Campbell  stated that the  AHFC Energy  Program utilizes                                                                    
State  General  Funds  (GF)  Receipts   and  Federal  U.  S.                                                                    
Department of Energy (DOE) funds  to assist low and moderate                                                                    
income families  attain decent, safe and  affordable housing                                                                    
through  the weatherization  and rehabilitation  of existing                                                                    
homes.   The   Weatherization    Program   provides   energy                                                                    
efficiency  upgrades  to  homes using  the  latest  building                                                                    
science tools  to target heat  loss areas and  correct them.                                                                    
Installed measures  must be cost effective.  The Home Energy                                                                    
Rebate  Program  utilizes  State General  funds  to  provide                                                                    
rebates   to   homeowners   for  making   energy   efficient                                                                    
improvements  to  their  homes  to reduce  energy  costs  or                                                                    
purchase newly constructed homes that  achieve a 5 Star Plus                                                                    
rating.                                                                                                                         
                                                                                                                                
RN 50683                                                                                                                        
AHFC Weatherization Program                                                                                                     
$31,500,000                                                                                                                     
                                                                                                                                
Mr.  Campbell  declared   that  the  Weatherization  Program                                                                    
utilizes Federal U. S. Department  of Energy (DOE) and State                                                                    
General Funds (GF)  funds to assist low  and moderate income                                                                    
families  attain   decent,  safe,  and   affordable  housing                                                                    
through cost effective  weatherization and rehabilitation of                                                                    
existing  homes. Weatherization  provides energy  efficiency                                                                    
upgrades to  homes using the  latest building  science tools                                                                    
to  target  heat  loss areas  and  correct  them.  Installed                                                                    
measures  must  be  cost effective.  The  program  addresses                                                                    
health  and safety  through  tune-ups  for heating  systems,                                                                    
electrical and chimney repairs, and woodstove improvements.                                                                     
                                                                                                                                
1:10:17 PM                                                                                                                    
                                                                                                                                
RN 51947                                                                                                                        
AHFC Home Energy Rebate Program                                                                                                 
$20,000,000                                                                                                                     
                                                                                                                                
Mr.  Campbell stated  that AHFC  Home Energy  Rebate program                                                                    
utilizes   State  General   Fund  appropriation   to  rebate                                                                    
homeowners  for  making  energy  efficient  improvements  to                                                                    
their homes.  The program  began in April  of 2008,  with an                                                                    
appropriation  of   $100  million  from  the   Alaska  State                                                                    
Legislature. By  the fall  of 2008  another $60  million was                                                                    
appropriated  to  the  program.  In order  to  maintain  the                                                                    
current  pace  established  in   FY08,  FY09  and  FY11  and                                                                    
eliminate  the  waiting  list,   new  funding  is  required.                                                                    
Participants must own their homes  and all improvements must                                                                    
be paid for up front by the homeowner.                                                                                          
                                                                                                                                
STACY SCHUBERT, DIRECTOR,  GOVERNMENTAL RELATIONS AND PUBLIC                                                                    
AFFAIRS, ALASKA  HOUSING FINANCE CORPORATION,  DEPARTMENT OF                                                                    
REVENUE,  stated  that a  sample  of  15,906 homeowners  was                                                                    
conducted. The  average amount of  money spent in  each home                                                                    
unit was  $11,009; and the  average rebate was  $6,3076 with                                                                    
an additional state appropriation  of $500 that was provided                                                                    
for the as-is  and post-rating for each  home, totaling $109                                                                    
million. This resulted in an  out-of-pocket expense for each                                                                    
homeowner  who  participated  in   the  rebate  program,  on                                                                    
average, $4,133;  totaling the private  sector contributions                                                                    
of over $65 million.                                                                                                            
                                                                                                                                
Senator Thomas wondered how the  money was split between the                                                                    
funding  for the  rebate  and  weatherization programs.  Mr.                                                                    
Campbell responded  that the weatherization program  was $30                                                                    
million and  the rebate  program was  $20 million.  He added                                                                    
that the weatherization program  had $1.5 million in federal                                                                    
funds.                                                                                                                          
                                                                                                                                
Senator Thomas  wondered if the  wait list for  the programs                                                                    
was long or short.                                                                                                              
                                                                                                                                
JOHN ANDERSON, WEATHERIZATION  PROJECT OFFICER, RESEARCH AND                                                                    
RURAL  DEVELOPMENT,  ALASKA   HOUSING  FINANCE  CORPORATION,                                                                    
DEPARTMENT OF REVENUE, replied that  the rebate program wait                                                                    
list was below  1400 with a three-month wait  limit; and the                                                                    
weatherization  agencies used  a  year by  year process  for                                                                    
their wait list.                                                                                                                
                                                                                                                                
Co-Chair  Hoffman stated  in the  prior  year's budget,  the                                                                    
administration  had proposed  $25  million for  both of  the                                                                    
programs,  and  $100 million  was  enacted.  He wondered  if                                                                    
those funds  could be  obligated, and  if the  program could                                                                    
sustain a level of $100  million. Mr. Henderson replied that                                                                    
he felt  the program could  use the $100 million,  and there                                                                    
was "ramped up capacity" for  each program to $100 million a                                                                    
year.                                                                                                                           
                                                                                                                                
Ms.  Shubert added  that they  had not  the program  had not                                                                    
been advertised since 2008, and  felt that it was impressive                                                                    
that the wait list remained at three months.                                                                                    
                                                                                                                                
RN 45390                                                                                                                        
AHFC Homeless Assistance Program                                                                                                
$8,000,000                                                                                                                      
                                                                                                                                
Mr.  Campbell  explained  that the  request  was  for  State                                                                    
General Funds  (GF), Mental Health Trust  Authority Receipts                                                                    
(MHTAAR),  and State  General  Funds/Mental Health  (GF/MH),                                                                    
for  grants to  local communities/agencies  to help  develop                                                                    
programs   to   support    programs   designed   to   reduce                                                                    
homelessness  by  providing  services that  prevent  housing                                                                    
displacement and  assist the homeless to  transition back to                                                                    
permanent  housing.  Corporate  programs will  be  leveraged                                                                    
with  the  other  funds.  All funds  will  be  combined  and                                                                    
administered as one program by AHFC.                                                                                            
                                                                                                                                
RN 6360                                                                                                                         
AHFC Beneficiary and Special Needs Housing                                                                                      
$1,750,000                                                                                                                      
                                                                                                                                
Mr.  Campbell explained  that State  General Funds  (GF) and                                                                    
Corporate  (AHFC)  funds  will   provide  for  a  continuing                                                                    
program  to serve  populations with  special housing  needs.                                                                    
The  program provides  funds  to  Alaskan nonprofit  service                                                                    
providers  to  increase  housing  opportunities  for  Alaska                                                                    
Mental  Health  Trust  Authority (AMHTA)  beneficiaries  and                                                                    
other special  needs populations  throughout the  state. The                                                                    
funds may  be used  for housing development  and/or services                                                                    
designed to achieve long-term residential stability.                                                                            
                                                                                                                                
1:15:59 PM                                                                                                                    
                                                                                                                                
Mr.  Campbell stated  that the  total funding  for the  AHFC                                                                    
projects   was   $121,628,400.   Of  that   total   funding,                                                                    
$16,536,300   was  corporate   dividends,  $11,750,000   was                                                                    
federal  funding, and  $93,342,000 was  other state  general                                                                    
funds.                                                                                                                          
                                                                                                                                
Co-Chair Stedman expressed the  need for a conversation with                                                                    
AHFC to  discuss the issues  regarding the  changing capital                                                                    
yields and  refinancing of mortgages. Ms.  Shubert agreed to                                                                    
participate in that discussion.                                                                                                 
                                                                                                                                
1:18:30 PM                                                                                                                    
                                                                                                                                
DEPARTMENT OF PUBLIC SAFETY                                                                                                   
                                                                                                                                
JOSEPH  MASTERS, COMMISSIONER,  DEPARTMENT OF  PUBLIC SAFETY                                                                    
(DPS),  stated that  most of  the DPS  budget requests  were                                                                    
directly  related   to  either  maintenance   of  operation,                                                                    
prolonging equipment lifespan, and repairing facilities.                                                                        
                                                                                                                                
RN 54346                                                                                                                        
Alaska Public Safety  information Network (APSIN) Contractor                                                                    
Support                                                                                                                         
$680,000                                                                                                                        
                                                                                                                                
Commissioner  Masters  explained   that  The  Alaska  Public                                                                    
Safety   Information  Network   (APSIN)  contains   criminal                                                                    
history information used by  law enforcement agencies across                                                                    
Alaska. It is a major  tool used in meeting the department's                                                                    
mission of protecting the public.  This has been an ongoing,                                                                    
phased  project  to move  APSIN  from  the State  of  Alaska                                                                    
legacy mainframe  to a Microsoft and  Intel server platform,                                                                    
and  at  the same  time  enhance  the Alaska  Public  Safety                                                                    
Information  Network's  capability.  This project  will  use                                                                    
contracted professional  services to provide  support during                                                                    
the   transition  from   the  mainframe   and  support   new                                                                    
initiatives  until   skilled  employees  can  be   hired  to                                                                    
maintain these systems.                                                                                                         
                                                                                                                                
RN 37774                                                                                                                        
Alaska State Troopers Law Enforcement Equipment                                                                                 
$500,000                                                                                                                        
                                                                                                                                
Commissioner Masters stated that  this project will purchase                                                                    
new  and replacement  law enforcement  equipment for  use by                                                                    
the Alaska  State Troopers. The  Alaska State  Troopers rely                                                                    
upon  capital improvement  funding  for equipment  purchases                                                                    
for day-to-day operations in order  to meet the department's                                                                    
mission of  ensuring public safety and  enforcing state laws                                                                    
by protecting lives, property and public peace.                                                                                 
                                                                                                                                
RN 45300                                                                                                                        
Alaska Wildlife Troopers Law Enforcement Equipment                                                                              
$500,000                                                                                                                        
                                                                                                                                
Commissioner  Masters  explained   that  this  project  will                                                                    
purchase new  and replacement law enforcement  equipment for                                                                    
use  by the  Alaska Wildlife  Troopers. The  Alaska Wildlife                                                                    
Troopers rely  upon capital improvement project  funding for                                                                    
purchase  of equipment  used  for  day-to-day operations  in                                                                    
order to  meet the  department's mission of  ensuring public                                                                    
safety and enforcing state laws  by protecting lives, public                                                                    
peace, and wildlife resources.                                                                                                  
                                                                                                                                
1:20:33 PM                                                                                                                    
                                                                                                                                
RN 51707                                                                                                                        
Village Public Safety Officer Equipment                                                                                         
$375,000                                                                                                                        
                                                                                                                                
Commissioner  Masters  announced   that  this  project  will                                                                    
provide  equipment replacement  funding  in  support of  the                                                                    
Village  Public Safety  Officer  (VPSO)  program. The  VPSOs                                                                    
rely upon capital improvement  project funding for equipment                                                                    
purchases  for day-to-day  operations in  order to  meet the                                                                    
department's mission  of public  safety and  enforcing state                                                                    
laws  by  protecting lives,  property  and  public peace  in                                                                    
rural communities.                                                                                                              
                                                                                                                                
RN 54510                                                                                                                        
Search and Rescue and Law Enforcement Helicopter                                                                                
$3,000,000                                                                                                                      
                                                                                                                                
Commissioner Masters explained that  this capital request is                                                                    
for  the purchase  of a  turbine helicopter  for search  and                                                                    
rescue missions  and law enforcement activity,  primarily in                                                                    
interior  Alaska. The  department purchased  a turbine  Bell                                                                    
Jet Ranger helicopter that was  based in Fairbanks from 1982                                                                    
to 1995. This first helicopter  was used extensively but was                                                                    
destroyed by fire after a  fuel line separated in flight. It                                                                    
was  subsequently replaced  by a  used helicopter  which was                                                                    
removed from service  due to airframe fatigue.  In 2001, the                                                                    
Department  based  a  piston  driven  helicopter  (R-44)  in                                                                    
Fairbanks.  This helicopter  is  meant  to conduct  wildlife                                                                    
patrols  in  Interior Alaska  and  is  neither equipped  nor                                                                    
performance-capable as  a SAR  platform. However,  being the                                                                    
only Department  helicopter available  in the region,  it is                                                                    
frequently  utilized  in  SAR and  routine  law  enforcement                                                                    
missions. As an example, the  R-44 was used to transport the                                                                    
Specialized Emergency Reaction Team  (SERT) personnel to the                                                                    
scene of a shooting of  the Trans-Alaska Pipeline in October                                                                    
2001 which  required multiple round trips  to ultimately get                                                                    
all team  members on-scene. Following this  incident, the R-                                                                    
44  flew almost  daily  missions  guarding the  Trans-Alaska                                                                    
Pipeline; a  nationally designated  critical infrastructure.                                                                    
The R-44  has also  conducted numerous searches  for missing                                                                    
people,  recovered bodies,  and provided  medical transport.                                                                    
There  have been  cases  where the  R-44  could not  conduct                                                                    
missions because of  its limitations; it was  never meant to                                                                    
do these types of missions.                                                                                                     
                                                                                                                                
Commissioner  Masters   declared  that  this   project  will                                                                    
purchase a  new turbine  helicopter to  meet the  search and                                                                    
rescue  and   mission-critical  operational  needs   in  the                                                                    
Interior  of  Alaska. The  Department  of  Public Safety  is                                                                    
statutorily responsible  to provide  law enforcement  to the                                                                    
citizens  of Alaska.  This duty  includes search  and rescue                                                                    
(SAR), emergency  law enforcement response,  crime detection                                                                    
and   prevention,   surveillance,  narcotics   interdiction,                                                                    
traffic  management,  and   civil  disorders/public  events.                                                                    
Interior  and   Northern  Alaska's  geography   and  extreme                                                                    
weather  conditions  create   enormous  challenges  for  the                                                                    
Alaska  State  Troopers  (AST) to  quickly  and  effectively                                                                    
respond to emergencies and a  lack of suitable equipment can                                                                    
put  Alaskans living  in this  region  at dire  risk. It  is                                                                    
critical for  AST to have  the capability to  quickly access                                                                    
remote  areas  during  adverse  weather  conditions  with  a                                                                    
helicopter that  is adequately equipped and  has the payload                                                                    
to fulfill its mission.                                                                                                         
                                                                                                                                
1:24:07 PM                                                                                                                    
                                                                                                                                
Co-Chair  Hoffman stated  that he  represented an  area that                                                                    
was larger  than the state  of Washington. He noted  that in                                                                    
this area, the primary mode  of transportation in the winter                                                                    
was by snow machines. He  wondered how the search and rescue                                                                    
requirements   in  that   region   compared  to   Fairbanks.                                                                    
Commissioner  Masters replied  that  a  number of  different                                                                    
factors  went  into the  selection  of  where to  house  the                                                                    
aircraft. He agreed to provide further information.                                                                             
                                                                                                                                
Co-Chair Hoffman understood that  access to facilities was a                                                                    
criteria,  but the  number  of people  that  will be  served                                                                    
should be  the main  factor when deciding  where to  house a                                                                    
search and rescue aircraft.                                                                                                     
                                                                                                                                
Senator Olson  wondered why a  used helicopter could  not be                                                                    
purchased.  Commissioner  Masters  replied  that  it  was  a                                                                    
significant  investment, and  they had  tried to  purchase a                                                                    
used aircraft but it had only lasted a few years.                                                                               
                                                                                                                                
1:29:06 PM                                                                                                                    
                                                                                                                                
Senator  Olson felt  that it  was  odd to  pull an  aircraft                                                                    
offline, because it  was an older aircraft.  He wondered why                                                                    
there  was a  full-time  crew employed  for  the search  and                                                                    
rescue helicopter,  when there  was a  focus on  keeping the                                                                    
cost  down. Commissioner  Masters replied  that there  was a                                                                    
Fairbanks asset that had been  redeployed, and was no longer                                                                    
available.                                                                                                                      
                                                                                                                                
Senator Olson  said he was  concerned about  getting another                                                                    
major  aircraft  that  required maintenance  and  a  24-hour                                                                    
standby  crew. He  wondered what  other jobs  the helicopter                                                                    
crew would be doing  besides search and rescue. Commissioner                                                                    
Masters  responded  that  the  asset  request  in  Fairbanks                                                                    
included  search  and   rescue,  emergency  law  enforcement                                                                    
response,  and wildlife  protection and  investigations. The                                                                    
top  priority  was  always maintaining  life,  and  aircraft                                                                    
would  be utilized  for  a wide  variety  of DPS  functions.                                                                    
There was  a request for  one full-time pilot  position, and                                                                    
the  support positions  would be  utilized depending  on the                                                                    
aircraft's type of use.                                                                                                         
                                                                                                                                
Senator  Olson  noted that  there  were  concerns that  game                                                                    
wardens would scare the game away.                                                                                              
                                                                                                                                
Senator  Egan asked  what  DPS used  for  search and  rescue                                                                    
helicopters  in   Southeast  Alaska.   Commissioner  Masters                                                                    
replied  that he  would have  to get  back to  the committee                                                                    
with that  information. He stated that  Southeast Alaska had                                                                    
the largest  number of  helicopters than  any other  area in                                                                    
the state.                                                                                                                      
                                                                                                                                
Co-Chair Stedman  asked how many miles  outside of Fairbanks                                                                    
the  helicopter would  respond. Commissioner  Masters stated                                                                    
that  the  effective  range  of   the  helicopter  would  be                                                                    
somewhere around 100 to 200 miles.                                                                                              
                                                                                                                                
1:36:34 PM                                                                                                                    
                                                                                                                                
Co-Chair  Hoffman  requested   a  statistical  analysis  for                                                                    
Districts A  and C. Commissioner  Masters agreed  to provide                                                                    
that information.                                                                                                               
                                                                                                                                
Senator Olson  stressed that if  the aircraft was  hauling a                                                                    
heavy load, it would decrease in fuel at a rapid rate.                                                                          
                                                                                                                                
RN 54512                                                                                                                        
P/V Woldstad- Engine Repower and Other Dry Dock Maintenance                                                                     
$2,400,000                                                                                                                      
                                                                                                                                
Commissioner Masters  stated that the propulsion  systems of                                                                    
the   Patrol  Vessel   (P/V)   Woldstad   are  overdue   for                                                                    
replacement. The engines are  several thousand hours overdue                                                                    
for overhaul and due to  the antiquity of the engines, parts                                                                    
have to be manufactured and  are very expensive. New engines                                                                    
will  be approximately  25 percent  more efficient  and less                                                                    
expensive  to maintain.  The propeller  and shafting  system                                                                    
are  also  antiquated  with parts  and  service  being  very                                                                    
difficult  to  find,  making maintenance  costs  exorbitant.                                                                    
Other mechanical  systems, such  as generators for  the boat                                                                    
are  also  beyond their  useful  life.  Total cost  for  the                                                                    
mechanical  replacement  are  estimated  at  $2,200,000  and                                                                    
other shipyard costs are estimated at $200,000.                                                                                 
                                                                                                                                
Co-Chair  Hoffman asked  if vessel  operated out  of Kodiak.                                                                    
Commissioner Masters affirmed.                                                                                                  
                                                                                                                                
Co-Chair Hoffman declared that  the House District should be                                                                    
changed to 36 instead of  37. Commissioner Masters agreed to                                                                    
examine that issue.                                                                                                             
                                                                                                                                
AMD 54924                                                                                                                       
Alaska Justice Advanced Exchange Program Development                                                                            
$1,812,000                                                                                                                      
                                                                                                                                
Commissioner Masters  explained that  this is a  new project                                                                    
for  FY2013 because  additional review  was completed  after                                                                    
the release  of the December 15th  FY2013 Governor's budget.                                                                    
The Alaska Public Safety Information  Network (APSIN) is the                                                                    
center of  all criminal  justice information systems  in the                                                                    
State  of  Alaska.  The  Alaska  Justice  Advanced  Exchange                                                                    
(AJAX)  project  is the  culmination  of  the Department  of                                                                    
Public  Safety's  (Department)  APSIN redesign  effort  that                                                                    
interfaces all  criminal justice systems and  allows them to                                                                    
exchange  information.   With  AJAX,  the   department  will                                                                    
develop  web  services to  enable  integration  with and  in                                                                    
support   of  Multi-Agency   Justice  Information   Exchange                                                                    
Consortium (MAJIC) members.                                                                                                     
                                                                                                                                
Co-Chair  Stedman  wondered  if  the system  would  allow  a                                                                    
trooper   to  access   an  individual's   criminal  history.                                                                    
Commissioner Masters  responded that the system  allowed for                                                                    
that option,  depending on  how each  department information                                                                    
systems  were set  up. He  stressed that  the project  would                                                                    
allow  DPS to  share the  criminal justice  information with                                                                    
computerized  systems  of  other   entities,  so  the  other                                                                    
entities could search and sort the data.                                                                                        
                                                                                                                                
RN 6121                                                                                                                         
Aircraft and Vessel Repair and Maintenance                                                                                      
$869,800                                                                                                                        
                                                                                                                                
Commissioner  Masters explained  that DPS  annually requests                                                                    
repair  and maintenance  funds for  department aircraft  and                                                                    
vessels. These assets are crucial  tools used to achieve the                                                                    
department's  mission to  ensure public  safety and  enforce                                                                    
fish and wildlife  laws. These funds are for  the repair and                                                                    
maintenance requirements  of this department's  aircraft and                                                                    
vessel fleet. For example, funds  are used to rebuild vessel                                                                    
and  aircraft engines  and components  when  they reach  the                                                                    
limits  of  safe  useful  life.  Many  other  components  of                                                                    
vessels  and   aircraft  must  be  maintained   or  replaced                                                                    
routinely to ensure safe operating  conditions and to comply                                                                    
with various safety regulations.                                                                                                
                                                                                                                                
RN 49781                                                                                                                        
Public Safety Academy Dining Facility Construction                                                                              
$200,000                                                                                                                        
                                                                                                                                
Commissioner  Masters  stated  that  this  project  provides                                                                    
additional  funds  needed  for   construction  of  a  dining                                                                    
facility as part of the Public Safety Academy in Sitka.                                                                         
                                                                                                                                
1:41:57 PM                                                                                                                    
                                                                                                                                
DAN SPENCER, DIRECTOR,  DIVISION OF ADMINISTRATIVE SERVICES,                                                                    
DEPARTMENT  OF PUBLIC  SAFETY, stated  that the  project was                                                                    
currently at  100 percent, and  the project would  go online                                                                    
at the end of the current week.                                                                                                 
                                                                                                                                
Co-Chair Stedman felt that the troopers should be well-fed.                                                                     
                                                                                                                                
Mr. Spencer  stated that the  completion of the  project was                                                                    
timed  to when  the contract  for food  at the  Academy runs                                                                    
out.                                                                                                                            
                                                                                                                                
Co-Chair Hoffman  wondered if any  funds would  be requested                                                                    
after FY 13.                                                                                                                    
                                                                                                                                
Co-Chair  Stedman   responded  that   the  request   was  an                                                                    
increment.                                                                                                                      
                                                                                                                                
RN 35825                                                                                                                        
Marine Fisheries Patrol Improvements                                                                                            
$1,500,000                                                                                                                      
                                                                                                                                
Commissioner Masters stated  that this project is  a part of                                                                    
a  joint  enforcement  agreement with  the  National  Marine                                                                    
Fisheries  Service.  Federally  regulated  marine  fisheries                                                                    
occur  on a  year-round basis  in the  coastal and  offshore                                                                    
waters  of Alaska.  Both the  federal and  state governments                                                                    
share   an  interest   in  ensuring   these  fisheries   are                                                                    
protected. This request is for  the federal fiscal year 2012                                                                    
joint enforcement  agreement that  will help  the department                                                                    
achieve  its mission  to ensure  public  safety and  enforce                                                                    
fish and wildlife laws and protecting wildlife resources.                                                                       
                                                                                                                                
Co-Chair  Stedman wondered  if DPS  was adequately  supplied                                                                    
for fuel  in the  marine patrol units.  Commissioner Masters                                                                    
replied  that they  were  currently  adequately fueled,  and                                                                    
unanticipated increases  in fuel prices were  addressed in a                                                                    
different portion of the budget.                                                                                                
                                                                                                                                
AMD 54927                                                                                                                       
Alaska  Land  Mobile  Radio  Emergency  Response  Narrowband                                                                    
Compliance                                                                                                                      
$1,470,000                                                                                                                      
                                                                                                                                
Commissioner  Masters  stated  that  this is  a  new  FY2013                                                                    
capital project  due to cost  estimates that  were finalized                                                                    
after the  December 15th 2013  Governor's budget.  The State                                                                    
of  Alaska,   the  Department  of  Defense,   other  federal                                                                    
agencies  in Alaska,  and local  municipalities have  joined                                                                    
together in  a consortium  effort to design,  build, operate                                                                    
and maintain  a fully interoperable  wireless communications                                                                    
system  in  Alaska,  the Alaska  Land  Mobile  Radio  (ALMR)                                                                    
project.  The primary  objective  of ALMR  is  to provide  a                                                                    
reliable and secure emergency  communications system for all                                                                    
emergency  responders  in  Alaska. In  order  to  accomplish                                                                    
this,  the  Federal   Communications  Commission  (FCC)  has                                                                    
mandated this  narrowband conversion requirement  by January                                                                    
1, 2013.                                                                                                                        
                                                                                                                                
1:45:31 PM                                                                                                                    
                                                                                                                                
AMD 48989                                                                                                                       
Replacement Twin-Engine Turbine Aircraft                                                                                        
$7,600,000                                                                                                                      
                                                                                                                                
Commissioner  Masters  explained   that  this  project  will                                                                    
replace   the   Department    of   Public   Safety's   (DPS)                                                                    
increasingly  unreliable,  31 year-old  twin-engine  turbine                                                                    
powered aircraft,  a King Air  200, which has  been grounded                                                                    
for maintenance  about one-third of  the time over  the past                                                                    
two  years. Because  of  the age  of  the aircraft,  finding                                                                    
parts is  becoming more difficult, increasing  down time and                                                                    
maintenance costs.  This is a  new FY13 capital  project due                                                                    
to  recent  unplanned  downtime  from  landing  gear  system                                                                    
failure.                                                                                                                        
                                                                                                                                
Co-Chair  Stedman  queried  the  status  of  the  King  Air.                                                                    
Commissioner Masters  responded that  it was still  used for                                                                    
VIP transport, primarily for transport of the governor.                                                                         
                                                                                                                                
Co-Chair  Stedman   asked  where  the  airplane   was  kept.                                                                    
Commissioner Masters replied that  the aircrafts were housed                                                                    
in Anchorage in a centralized facility.                                                                                         
                                                                                                                                
1:50:10 PM                                                                                                                    
                                                                                                                                
Senator  Olson  observed  that the  current  year's  capital                                                                    
budget was very  large, and queried the  beach craft landing                                                                    
gear  issue.  Commissioner  Masters replied  that  the  gear                                                                    
cycling were not operating safely.                                                                                              
                                                                                                                                
Senator Olson  stated that there  were two King  Airs flying                                                                    
out of Nome, providing medi-vac  service. He wondered if DPS                                                                    
had  considered   getting  a  used   aircraft.  Commissioner                                                                    
Masters  replied  that the  aircraft  they  were looking  at                                                                    
would depend  on particular landing  strips. He  stated that                                                                    
when he looked  at the used aircrafts, they  were mostly out                                                                    
of the country. He stressed that  there was a cut over point                                                                    
on some of the older aircraft.                                                                                                  
                                                                                                                                
1:55:04 PM                                                                                                                    
                                                                                                                                
Senator Olson  wondered how many  hours a year  the aircraft                                                                    
would be used. Commissioner  Masters responded that the King                                                                    
Air 200 was  used around 400-500 hours a year.  He felt that                                                                    
the  proposed aircraft  would potentially  be used  for more                                                                    
than 500 hours.                                                                                                                 
                                                                                                                                
Senator  Olson  stated  that he  done  the  calculation  for                                                                    
leasing an  aircraft at  $35,000. If  DPS used  the aircraft                                                                    
for $35,000 a  month for 12 months, it would  cost the State                                                                    
$420,000  a year.  If it  was flown  400 hours  a year,  the                                                                    
engine  reserve would  equal $280,000  -  which was  roughly                                                                    
$700,000 a year.  It would take 10 years to  use up the $7.6                                                                    
million request. He felt that  a leasing option was a better                                                                    
option. Commissioner Masters responded  that DPS felt it was                                                                    
better to  make the investment  outright, to save  money for                                                                    
engine reserves.                                                                                                                
                                                                                                                                
Senator  Olson  wondered  if the  maintenance  included  the                                                                    
crew.   Commissioner   Masters   agreed  to   provide   that                                                                    
information.                                                                                                                    
                                                                                                                                
RN  41788                                                                                                                       
Deferred maintenance, Renewal, Repair and Equipment                                                                             
$1,350,000                                                                                                                      
                                                                                                                                
Commissioner  Masters  stated  that   this  project  is  for                                                                    
maintenance  within   the  four  DPS   occupied  state-owned                                                                    
buildings  throughout Alaska.  Without  adequate funding  to                                                                    
store  evidence,  protect  department-owned  equipment,  and                                                                    
provide   employees  with   good  working   conditions,  the                                                                    
department  cannot meet  its  mission  or accomplish  stated                                                                    
results.                                                                                                                        
                                                                                                                                
Co-Chair Stedman  asked for a  brief update on  the purchase                                                                    
of the  property adjacent  to the  Academy in  Sitka driving                                                                    
range. Commissioner  Masters replied that DPS  had signed an                                                                    
intent to purchase the property.                                                                                                
                                                                                                                                
Mr.  Spencer furthered  that there  was  a signed  agreement                                                                    
with the  Baranof Island Housing  Authority to  purchase the                                                                    
property. A  final plat needed  to be  filed by the  City of                                                                    
Sitka,  and after  the  survey was  complete,  the Corps  of                                                                    
Engineers  would  be  part  of the  planning.  He  hoped  to                                                                    
complete the purchase by the end of the current month.                                                                          
                                                                                                                                
Co-Chair Stedman wondered there  was money available for the                                                                    
design  of  the track.  Mr.  Spencer  replied that  DPS  was                                                                    
working  on  finding someone  to  design  a track.  At  that                                                                    
point, the  Corps of  Engineers would  be approached  with a                                                                    
potential plan.                                                                                                                 
                                                                                                                                
Co-Chair  Stedman surmised  that they  were waiting  for the                                                                    
final purchase,  so DPS would  revisit that issue  once they                                                                    
are ready.                                                                                                                      
                                                                                                                                
2:01:31 PM                                                                                                                    
                                                                                                                                
Co-Chair  Hoffman  wondered  how 911  emergency  calls  were                                                                    
handled  in Bethel,  and other  areas throughout  the state.                                                                    
Mr. Spencer replied  that there was not a  911 call standard                                                                    
for the  entire state. He  explained that there were  a wide                                                                    
variety of ways  the calls were handled in  the rural areas.                                                                    
He noted the  issue of where the 911 calls  from cell phones                                                                    
were routed, and announced that  DPS was working with GCI to                                                                    
fix that issue.                                                                                                                 
                                                                                                                                
Co-Chair Hoffman  recommended an exploration of  how the 911                                                                    
calls  were being  dispatched, and  what  kind of  contracts                                                                    
were  throughout the  state. Mr.  Spencer agreed  to provide                                                                    
that  information.   Co-Chair  Hoffman  stressed   that  the                                                                    
information should be provided as soon as possible.                                                                             
                                                                                                                                
SB  160  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
Co-Chair Stedman discussed the following day's agenda.                                                                          
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
2:06:01 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 2:05 PM.                                                                                           

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