Legislature(1993 - 1994)
01/26/1993 01:32 PM House FIN
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* first hearing in first committee of referral
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HOUSE FINANCE COMMITTEE
January 26, 1993
1:32 p.m.
TAPE HFC 93-9, Side 2, #000 - end.
TAPE HFC 93-10, Side 1, #000 - end.
TAPE HFC 93-10, Side 2, #000 - 585.
CALL TO ORDER
Co-Chair Larson called the House Finance Committee to order
at 1:32 p.m.
PRESENT
Co-Chair Larson
Co-Chair MacLean
Vice-Chair Hanley Representative Navarre
Representative Brown Representative Parnell
Representative Foster Representative Therriault
Representative Grussendorf
Representatives Hoffman and Martin were absent from the
meeting.
ALSO PRESENT
Representative Ulmer; Representative Nicholia;
Representative Davies; Representative Toohey; Mike Greany,
Director, Legislative Finance Division; Glenn A. Olds,
Commissioner, Department of Natural Resources; Natural
Resources; Raga Elim, Special Assistant, Department of
Natural Resources; Nico Bus, Chief Financial Office,
Department of Natural Resources; John A. Sandor,
Commissioner, Department of Environmental Conservation;
Janice Adair, Assistant Commissioner, Department of
Environmental Conservation; Carl L. Rosier, Commissioner,
Department of Fish and Game; Ron Somerville, Deputy
Commissioner, Department of Fish and Game; Larry Jones,
Director, Division of Administration, Department of Fish and
Game.
SUMMARY INFORMATION
OPERATING BUDGET OVERVIEWS: DEPARTMENT OF NATURAL
RESOURCES
DEPT. OF ENVIRONMENTAL
CONSERVATION
DEPARTMENT OF FISH AND GAME
hb55#
HB 55 FY 94 OPERATING BUDGET & LOAN PROGRAMS
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DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT
Co-Chair Larson noted that the Governor's FY 94 proposed
budget is $1,225.5 million dollars above the FY 93
authorized level. He noted that the purchasing power of the
Department of Natural Resources has eroded during the past
10 years. The Department is $53.788.0 million dollars below
its 1983 level, in 1993 general fund dollars.
GLENN A. OLDS, COMMISSIONER, DEPARTMENT OF NATURAL RESOURCES
emphasized that Article VIII, Alaska State Constitution
states that "the legislature shall provide for the
utilization, development and conservation of all natural
resources belonging to the state,... for the maximum benefit
of its people." He observed that the Department of Natural
Resources represents 2 percent of the State of Alaska's
budget. The Department of Natural Resources generates 80
percent of the revenue of the State. He interjected that
the Department had just completed a $90 million dollar lease
sale.
Commissioner Olds referred to materials provided to
committee members detailing the Department of Natural
Resources' FY 94 budget request (copy on file). He detailed
the department's components. He referred to a Department of
Natural Resources publication titled, "A Strategic Plan,
Into the 21st Century" (copy on file).
The Department's five critical priorities are:
* Implementation of the Owner State;
* Stimulate a sustainable economical development;
* Implement efficiencies of government operation;
* Deliver essential services;
* Stimulate local initiative and responsibility.
Commissioner Olds pointed out that natural resources are the
State's basic revenue source. He stated that the Department
has fast-tracked the land settlement issue. The State of
Alaska's remaining land selection of 23 million acres were
filed for on December 31, 1992.
Commissioner Olds discussed the Department's priorities. He
observed that only 1 percent of the land in Alaska is in
private ownership. He asserted that the Department will
accelerate the movement of land into private ownership. He
assured members that the Department will maintain close
cooperation and integration of economic development and
economic trade with resource development. Commissioner Olds
asserted that the Department's budget reflects appropriate
integration of environmental concerns with economic
development.
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Commissioner Olds continued to discuss the Department's
priorities. He addressed the need to simplify and
accelerate regulatory processes and organizational
structures to allow rapid, sustained economic growth. He
stressed that the administrative budget will be maximized.
He noted that fire suppression costs have been restructured
to only reflect fixed costs. Additional costs for fire
suppression will be addressed in the supplemental process.
He raised the issue of public awareness of Alaska's natural
resource asset base.
Commissioner Olds noted that the Department proposed a $46
millon dollar capital projects budget. The Governor
included $10 million dollars in capital budget requests for
the Department of Natural Resources.
Commissioner Olds discussed specific modifications to the
Department of Natural Resources' FY 94 budget. The Forest
Management and Development program was reduced by $791.0
thousand dollars. Nursery functions have been transferred
to the Division of Agriculture in order to coordinate
efforts with the University of Alaska's research department.
The Division of Land was reduced by $800 thousand dollars in
their planning and support functions. The net reduction to
the Division of Land is approximately $400 thousand dollars.
The public information support service function has been
realigned and integrated with the Division of Land. One
time funding of $97.5 thousand dollars for wetlands has been
eliminated. Program receipt authority relating to park user
fees has been reduced to reflect low user numbers. He
observed that federal parks in the State of Alaska cost $15
dollars per visitor. State parks cost .75 cents per
visitor.
Commissioner Olds continued to discuss changes in the
Department of Natural Resources' budget. The Division of
Mining reflects a federal dollar increase of $1.6 million
dollars. The Division of Administrative Services was
reduced by $250 thousand dollars. The Division of
Agriculture has been integrated with the Division of Soil
and Water.
Representative Brown observed that funding for further
analysis and evaluation of Prudhoe Bay producer data was not
included in the Department's budget. Commissioner Olds
clarified that the project was requested as a capital
improvement project, but was not included by the Governor.
He noted that the Department appealed the Governor's
decision not to include this project. Representative Brown
emphasized the importance of the project.
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Co-Chair Larson referred to the Mental Health Settlement.
Commissioner Olds discussed the Department's involvement in
the settlement. He reviewed the Mental Health Settlement
issue. One million acres were to be set aside for support
of mental health. The State has reconstituted 360 thousand
acres. In order to meet the State's remaining obligation of
640 thousand acres, a pool of 7 million acres was created.
This pool was created as insurance, to allow for comparable
worth. He suggested that 7 million acres is excessive. The
Department has asked the Attorney General to review its
recommendation that the quantity of land set aside to meet
the State's obligation be reduced. He indicated that final
settlement is not eminent since one of the four plaintiffs
is not in agreement with the other three.
Co-Chair Larson announced that the House Finance
Subcommittee on the Department of Natural Resources' budget
consists of Representatives Therriault, James, Williams,
Green, Toohey, Davies and Carney.
Commissioner Olds displayed to members a map detailing the
available resources of the State of Alaska. He noted that
the State of Alaska contains, as a conservative estimation,
$357 billion dollars in resources.
DEPARTMENT OF ENVIRONMENTAL CONSERVATION
Co-Chair Larson noted that over the past 10 years the
Department of Environmental Conservation's budget has grown
approximately $5.5 million dollars. This does not account
for the addition of programs, services or population growth.
The Department is requesting a FY 94 increase of $498.0
thousand dollars.
JOHN SANDOR, COMMISSIONER, DEPARTMENT OF ENVIRONMENTAL
CONSERVATION presented members with back-up material
regarding the Department's FY 94 budget request (copy on
file). He summarized the Department of Environmental
Conservation's objectives as detailed in the back-up
provided to members (Attachment 1). He discussed the
following objectives:
* Development of formal partnership agreements with
Alaskan communities and other public/private
groups;
* Implement Alaska's Water and Sanitation Task Force
recommendations;
* Work with the Environmental Protection Agency
(EPA) to obtain recognition of Alaska's unique
wetlands situation;
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* Assist EPA in establishing a regional office in
Alaska;
* Complete the revision of Alaska's Water Quality
Standards as part of the Clean Water Act Triennial
Review;
* Maintain state primacy of federal environmental
protection programs;
* Continue implementation of Alaska's Tough Oil
Discharge Prevention and Contingency Planning
regulations;
(Tape Change, HFC 93-10, Side 1)
* Accelerate the resource and service restoration
work associated with the Exxon Valdez Oil Spill
Trustee Council;
* Continue emphasis on Environmental Research and
Development through partnerships with
universities, federal agencies and the private
sector;
* Continue focusing attention on the North Pacific
Fisheries problem of wasteful practices;
* Work with the Northern Forum and other
international groups in dealing with
arctic/subarctic environmental issues;
* Integrate and coordinate DEC activities with DNR
and other departments where redundancies or shared
responsibilities exist;
* Work in partnership with the Alaska Legislature to
amend or develop environmental laws, regulations
and programs to promote environmental and
sustainable development.
Commissioner Sandor expanded his overview to included
specific projects to be addressed. He noted the importance
of implementation of Alaska's Water and Sanitation Task
Force recommendations. He estimates that it will cost
between $1.2 and $1.4 billion dollars to bring Alaska's
rural communities up to minimum health standards. He
emphasized that he is not discussing water in the homes.
Communities would only be provided with a safe water source
and a safe means to dispose of human waste. He stressed
that there is a shared federal/state responsibility to
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provide safe water and sanitation. The Department proposes
that the State fund $25 million dollars a year over a 20
year period. The Department is proposing that the federal
government match this amount.
Commissioner Sandor continue to outline the Department's
legislative priorities:
* Simplify regulations;
* Enactment of an Air Quality Permit Bill which will
meet federal Clean Air requirements; (25
additional air quality specialists will be
required to meet the mandate of the 1990 federal
requirements. User fee authority will be needed
since the program will be funded by permit fees.)
* Encourage the use of natural gas and other
alternative energy sources for motor vehicles
through legislation;
* Modifications of existing laws and regulation
which will lessen the cumulative impact of
environmental regulations on Alaska's smaller
communities;
* Utilize Exxon Valdez Oil Spill settlement and
other funds to complete the acquisition of
Kachemak State Park inholdings;
* Strengthen measures to deter environmental crimes;
* Complete Water Quality regulations and standards;
* Establish and administer a fair user fee program
and encourage communities to collect and administer
the program; (The Department of Environmental
Conservation's budget contains $3 million dollars
to be funded by user fees.)
* Strengthen Alaska's fish inspection and monitoring
programs to further enhance and preserve Alaska's
reputation for marketing top quality fish; (The
Department has shifted $1 million dollars to the
Environmental Health Unit.)
Commissioner Sandor noted that there has been problems with
paralytic seafood poisoning of Alaskan crab and shellfish
stock. He emphasized the growing world competition. He
suggested a monitoring program to demonstrate that every
part of Alaska is meeting both Food and Drug Administration
and Environmental Protection Agency health standards.
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* Strengthen Alaska's emergency response capability
for oil and hazardous substance spills.
* Consider revisions of radiation control/protection
responsibilities stemming from the State Emergency
Response Commission's report to the Governor;
* Work with the legislature to plan a budget
strategy for 1995 and the balance of the decade.
Commissioner Sandor emphasized that the programs and
responsibilities of the Department of Environmental
Conservation have increased. The Divisions of Environmental
Quality and Spill Prevention and Response have been
restructured. Funding will be allocated by region rather
than through the Central Office. The Divisions of Facility
Construction and Operation and Environmental Health will
still be administered from the Central Office. The general
fund allocation for the hazardous waste program will be
reduced by $1 million dollars. Funds will be shifted to the
Division of Environmental Health. He stressed that the
Department is not abandoning its interest in hazardous
waste.
Commissioner Sandor discussed coordination of programs
between the Department of Natural Resources and the
Department of Environmental Conservation. The Attorney
General will be consulted in regards to dual appointments of
personnel. Dual appointments would allow the departments to
share monitoring and administerative responsibilities. He
assured members that the Department of Environmental
Conservation will maintain high water quality protection
standards.
Representative Brown asked why the Department has changed
from a project to a region oriented budget. Commissioner
Sandor replied that the primary motivation is to fix
responsibility and to achieve targets associated with the
regions. Regional administrators and district managers
would have more responsibility. Representative Brown
expressed concern that the Legislature will have difficulty
assessing what will be funded and what is accomplished. She
emphasized her desire to see specific projects funded in the
Division of Environmental Quality.
Co-Chair Larson discussed the use of the 470 Fund to
compensate the Underground Storage Tank Program. He asked
if the Department would support a two cent per gallon motor
fuel tax. Commissioner Sandor answered that a two cent fee
was considered for fuel storage facilities.
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JANICE ADAIR, ASSISTANT COMMISSIONER, DEPARTMENT OF
ENVIRONMENTAL CONSERVATION gave a brief historical overview
of the Underground Storage Tank Program. She noted that
past legislatures have debated whether the program could be
paid for with dedicated funds. She noted that the 1992
Legislature elected to fund the program through the
Mitigation Account which is separate from the 470 Fund. She
noted that the Mitigation Account may be appropriated to the
470 Fund. The FY 94 budget proposes to fund the program
through the Mitigation Account.
REPRESENTATIVE DAVIES underscored the importance of
addressing the hazardous waste problem. He noted the
financial burden of affected communities. Commissioner
Sandor acknowledged the problems associated with hazardous
waste disposal. He suggested that the State work with
communities to work through regional organizations.
Co-Chair Larson relayed concerns by a constituent that while
the State's spill prevention and response planning has been
expanded, that there has been no advancement of the
Department's capability to mitigate the on shore affects of
oil. Commissioner Sandor agreed that the Department has not
developed further capability to mitigate the affects of on
shore oil. He noted problems associated with oil which has
contaminated mussel beds.
Representative Foster expressed his appreciation to
Commissioner Sandor for his concern and work in rural
Alaska.
Co-Chair Larson announced that the Department of
Environmental Conservation House Finance Subcommittee
consists of Representatives Therriault, Parnell, G. Davis,
Brown and Finkelstein.
REPRESENTATIVE NICHOLIA asked if, under water quality
standards review, the five NTU's required for placer miners
will be reviewed. Commissioner Sandor did not expect
changes to be made in product standards. He emphasized that
the review will be aimed at regulation of 64 toxic
substances.
DEPARTMENT OF FISH AND GAME
Co-Chair Larson noted that the Department of Fish and Game's
FY 94 budget request is $2.633 million dollar below FY 93.
Over the last ten years the purchasing power for Department
of Fish and Game has decreased by $12,064.3 million dollars.
CARL ROSIER, COMMISSIONER, DEPARTMENT OF FISH AND GAME
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stressed the importance of fish and game resources to the
State of Alaska. He noted that in 1992, the State of
Alaska, vessel value was 1.2 billion dollars. He estimated
that 40 - 45 million pounds of subsistence resources are
harvested annually. He observed the importance of non-
consumptive uses and sport fishing activities. He
emphasized the importance of the Department of Fish and Game
as a public service to the common property resource.
Commissioner Rosier provided members with a handout
detailing the Department's missions and priorities (copy on
file).
Commissioner Rosier stressed that the Department of Fish and
Game will strive to:
* Maximize public benefits;
* Increase governmental efficiency by; streamlining,
combining divisions and reprioritizing programs;
(Tape Change, HFC 93-10, Side 2)
Commissioner Rosier noted that the Fisheries Rehabilitation
Enhancement Division (FRED) and the Division of Commercial
Fisheries will be combined. Major hatchery facilities will
be withdrawn from FRED.
Commissioner Rosier discussed key functions which will be
retained by FRED:
* Mariculture
* Regional planning and technical support of
regional Aquacultural Associations.
* Genetic research.
Commissioner Rosier pointed out that FRED program funding
has been reprioritized. Coho management, stock assessment
and Northern fisheries will receive increased priority. He
observed that the Northern fisheries have not benefited from
enhancement programs carried out in the Gulf. He stated
that the Northern fisheries are beginning to show the signs
of resource stress.
Commissioner Rosier discussed economic diversification and
revenue enhancement. He stated that the Department of Fish
and Game is continuing to develop fisheries. He mentioned
transferring hatchery technology to the Saint George
fisheries. He noted that a small new fisheries has been set
up in the Atka area.
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Commissioner Rosier addressed Community Development Quotas
(CDQ). The Department is monitoring the CDQ program. Seven
percent of the Bering Sea pollack resource has been
allocated to local communities.
Commissioner Rosier observed that the sport fish industry
has continued to grow. In 1992 non-resident license sales
exceeded resident license sales for the first time.
Commissioner Rosier reiterated that hatcheries managed by
FRED will be turned over to the private/non-profit sector.
He added that the Department will continue to provide
support in regards to generic and disease issues.
Commissioner Rosier noted the need to develop shellfish seed
stock.
Commissioner Rosier discussed issues concerning state
jurisdiction. The State has litigation pending regarding
the extension of federal authority into navigable waters of
the State of Alaska. The Pacific Salmon Forum retains its
importance in Canadian and Alaskan fisheries. The State is
involved in Yukon treaty negotiations. The Department
anticipates further negotiations concerning subsistence and
commercial uses within Glacier Bay Park. The Department
also expects federal legislation regarding the Magnuson Act,
Endangered Species Act, Marine Mammal Protection Act and
biodiversity.
Commissioner Rosier examined the major impacts of
restructuring FRED. He emphasized that the Department is
withdrawing to its primary function of resource management.
The Department has proposed the closure or transfer of four
hatcheries; Crooked Creek, Big Lake, Klawock and Deer
Mountain. In addition, the Department is proposing full
transfer to the private sector of Kitoi, Pillar Creek and
Gulkana facilities. The Department is proposing that Fort
Richardson, Elmendorf and Broodstock Development Center
facilities be transferred to the Division of Sport Fish.
Four facilities would remain in FRED; Snettisham, Crystal
Lake, Sikusuilaq and Clear.
Commissioner Rosier explained that the Department is seeking
additional funding for the Commercial Fisheries Division to
fund a crab pot identification program. He added that the
Department is proposing to redirect funds to the CDQ
program. He explained that the federal government is not
going to monitor the program. The Sport Fish Division has
been redirected to in season management. The Division of
Boards will also require increased funding.
Representative Navarre asked how the Crooked Creek hatchery
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stock and programs will be replaced if the State is unable
to transfer the facilities to the private sector.
Commissioner Rosier replied that there is nothing to replace
the commercial utilization of the facility unless the
Aquacultural Association agrees to allow utilization of one
of their Cook Inlet facilities. The sport fish portion
would be handled through the Fort Richardson and Elmendorf
facilities.
Representative Hanley observed that legislation passed
requiring the Board of Fish to adopt regulations for mid
stock fisheries. He noted that regulations have not yet
been implemented. He emphasized the need to address the
problem. He added that there are concerns that there will
be excessive shellfish leasing in areas that have been
traditionally used by sport and recreational users. He
cited conflicts in Washington State between mariculture and
other uses. Commissioner Rosier acknowledged the
difficulties involved.
Representative Foster asked what efforts would be made to
enhance the fishery stocks in the Northern Fisheries.
Commissioner Rosier replied that the issue still needs to be
addressed and technology developed.
Representative Ulmer commented on page 26 of the "Alaska
Department of Fish and Game Department Budget and Program
Overview - FY 94" (copy on file). She noted that under
"Major Issues," the Department lists as its number one
priority the reduction of program receipts. "Reduction of
program receipts results in the issue of the capability of
the private nonprofit regional associations to operate
existing state facilities with their own infrastructure."
She asked if this policy is inconsistent with the desire to
promote economic development an promote new private sector
jobs. She emphasized that job loss will be associated with
the closures. She asked Commissioner Rosier to clarify the
rationale behind the closures.
Commissioner Rosier emphasized that discussions are
continuing with the private sector to assume these
facilitates. He noted that there are only two sources of
general fund dollars in the Department; FRED and the
Commercial Fisheries Division. He asserted that he must
protect the core entity. He assured her that the facilities
in question would be managed. He reiterated that the Kitoi,
Pillar Creek and Gulkana facilities would continue to be
operated.
Co-Chair MacLean asked if user fees would be placed on the
pollack fisheries. Commissioner Rosier replied that there
were no plans for user fees on this fishery. He noted that
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the Department of Fish and Game and Department of Community
and Regional Affairs are coordinating their efforts in
regards to CDQ's.
Co-Chair MacLean asked for information regarding the closure
of the Kotzebue office.
LARRY JONES, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,
DEPARTMENT OF FISH AND GAME clarified that the position
would be transferred to the Fairbanks office.
Co-Chair Larson announced that the Department of Fish and
Game House Finance Subcommittee consists of Representatives
Hanley, Moses, Hudson, Bunde, G. Davis, Hoffman, Davidson,
Nicholia and Grussendorf.
ADJOURNMENT
The meeting adjourned at 3:38 p.m.
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