Legislature(2009 - 2010)
03/10/2009 02:43 PM House FIN
| Audio | Topic |
|---|---|
| Start | |
| HB81 || HB83 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
March 10, 2009
2:43 p.m.
2:43:30 PM
CALL TO ORDER
Co-Chair Hawker called the House Finance Committee meeting
to order at 2:43 p.m.
MEMBERS PRESENT
Representative Mike Hawker, Co-Chair
Representative Bill Stoltze, Co-Chair
Representative Bill Thomas, Jr., Vice-Chair
Representative Allan Austerman
Representative Harry Crawford
Representative Anna Fairclough
Representative Richard Foster
Representative Les Gara
Representative Reggie Joule
Representative Mike Kelly
Representative Woodie Salmon
MEMBERS ABSENT
None
ALSO PRESENT
Karen Rehfeld, Director, Office of Management and Budget,
Office of the Governor; Leta Simons, Director, Division of
Support Services, Department of Natural Resources; Guy Bell,
Assistant Commissioner and Director, Division of
Administrative Services, Department of Labor and Workforce
Development; Craig Tillery, Deputy Attorney General,
Department of Law; Tina Kobayashi, Senior Assistant Attorney
General
PRESENT VIA TELECONFERENCE
Cathy Foerster, Engineering Commissioner, Oil & Gas
Commission, Department of Administration; Marty Rutherford,
Deputy Commissioner, Department of Natural Resources; Pat
Galvin, Commissioner, Department of Revenue
SUMMARY
HB 81 "An Act making appropriations for the operating
and loan program expenses of state government, for
certain programs, and to capitalize funds; making
supplemental appropriations; and making
appropriations under art. IX, sec. 17(c),
Constitution of the State of Alaska; and providing
for an effective date."
CSHB 81 was REPORTED out of Committee with a "do
pass" recommendation.
HB 83 "An Act making appropriations for the operating
and capital expenses of the state's integrated
comprehensive mental health program; and providing
for an effective date."
CSHB 83 was REPORTED out of Committee with a "do
pass" recommendation.
2:43:38 PM
HOUSE BILL NO. 81
"An Act making appropriations for the operating and
loan program expenses of state government, for certain
programs, and to capitalize funds; making supplemental
appropriations; and making appropriations under art.
IX, sec. 17(c), Constitution of the State of Alaska;
and providing for an effective date."
HOUSE BILL NO. 83
"An Act making appropriations for the operating and
capital expenses of the state's integrated
comprehensive mental health program; and providing for
an effective date."
2:43:43 PM
Co-Chair Hawker introduced the agenda to take up the final
amendments to the operating budget on oil and gas and
litigation-related matters. The amendments originate from a
request by the administration. The Office of Management and
Budget has been requested to clarify what is being asked for
by the Governor. The oil and gas and litigation matters
have involved a multitude of appropriations over the years.
There has been an effort to pull together an aggregation of
the Governor's requests. Many of the items were in the
Governor's supplemental FY 2009 request; some were in the FY
2010 budget request, and some were significant requests for
funding for continued litigation work in the Department of
Law's regular operating budget. Co-Chair Hawker mentioned
that the Budget Subcommittee deferred decisions to the House
Finance Committee to discuss, in the form of amendments, at
his request.
2:46:49 PM
Co-Chair Hawker explained the spreadsheet before the
Committee entitled, "Open Items FY 2010 Oil & Gas Related
Items" (copy on file). The grid box list identifies by
number each of the requests before the Committee. This is
backed up by a more detailed list of the operating budget
amendments (copies on file). Co-Chair Hawker noted that
Karen Rehfeld would be answering specific questions for the
Committee in regards to the list. Some amendments may be
listed as withdrawn or not offered with the intent of
"taking them back to the supplemental budget."
2:49:03 PM
KAREN REHFELD, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, reminded the Committee that in FY
2009 the legislature pulled out specific appropriations
related to oil and gas and put them under the Office of the
Governor. In the FY 2010 budget, a section specifically in
the operating budget for gasline related appropriation
requests was brought forward. There was also a separate
section in the capital budget for those requests. Ms.
Rehfeld said that this was important because in a state
where over 85 percent of its revenue derives from oil and
gas production, and a third of the economy is dependent on
oil and gas production, it is very important for everyone to
be engaged in the oil and gas business. The state has the
responsibility to manage its resources and its fiduciary
interests, as well as safeguard impacts on the environment.
At the request of Co-Chair Hawker, the departments put
together a summary of oil and gas appropriations from FY
2004 on, both operating and capital, to give the Committee a
full perspective for the FY 2010 budget.
2:52:26 PM
Ms. Rehfeld noted requests for five departments in Section
16 related to the gasline: Departments of Fish & Game,
Labor, Law, Natural Resources, and Revenue. One of the
requests under the Department of Law has been withdrawn.
The amended Section 16 totals $4,702,700. Also included in
the supplemental bill are three items requesting an
extension of a lapse date on an existing appropriation;
Alaska Oil and Gas Conservation Commission ($1,450,600),
Department of Labor ($100,000 in general funds), and
Department of Natural Resources ($2,965,800).
Ms. Rehfeld reported that after discussions with Co-Chair
Hawker and Legislative Finance, the Governor submitted
budget amendments for the FY 2010 budget. The purpose was
to allow the subcommittees and House Finance Committee to
discuss this information. Also, the Governor offered in the
regular budget amendments before the Committee on February
18, 2009, several items specific to the Department of Law,
one for BP Corrosion ($3.5 million), and one for ongoing
work on the Trans Alaska Pipeline ($1.9 million). There is
a request from the Department of Law for a little over $5
million and a new request for ongoing work on the AIGA
appropriation approved during the special session last
summer. The total amount requested is about $22.4 million.
2:54:58 PM
Ms. Rehfeld introduced staff from various departments to
answer questions. She explained that the first item on the
spreadsheet was an appropriation for the Alaska Oil & Gas
Conservation Commission for a lapse extension of $1,450,600
for reservoir depletion studies. It is an ongoing
appropriation to continue work into the next fiscal year.
CATHY FOERSTER, ENGINEERING COMMISSIONER, ALASKA OIL & GAS
CONSERVATION COMMISSION, DEPARTMENT OF ADMINISTRATION,
testifying via teleconference, introduced herself.
Co-Chair Hawker thought the money from FY 2005 was being
used on an ongoing basis for reservoir depletion studies.
He wondered what the original $2.2 million in funds was used
for, and what is intended with the remaining $1.4 million.
2:57:05 PM
Ms. Foerster replied that the money was used to complete a
Prudhoe Bay reservoir study and to start the Point Thomson
study. She indicated that the Prudhoe Bay study was
complete and a report had been submitted to the legislature.
The Point Thomson study has started and stopped several
times due to conflicts between Exxon and the Department of
Natural Resources. The anticipated completion of that study
is FY 2010. Part of the money may be used to update the
Prudhoe Bay study.
Co-Chair Hawker maintained that the remaining money is
adequate for the project and not in excess. Ms. Forester
anticipated using all of the money and hoped to have the
study completed by the end of FY 2010.
2:58:41 PM
Co-Chair Hawker reiterated that the money request is to
extend a lapsing appropriation. He indicated that Amendment
O&G 1 would be deferred from this discussion to the FY 2009
Supplemental Budget.
2:59:49 PM
Representative Fairclough questioned if Co-Chair Hawker had
specified the FY 2004 date forward in the request. Co-Chair
Hawker replied that the Office of Management and Budget had
been asked to recap a cumulative history of oil and gas
expenditures from FY 2004.
3:01:06 PM
Representative Fairclough asked if there were any lapsed
funds in oil and gas prior to FY 2004 not being discussed
during this meeting. Ms. Rehfeld did not believe so but
offered to report the answer to the Committee at a later
date.
Ms. Rehfeld referred to Amendment O&G 2 on the supplemental
sheet from the Department of Fish and Game for pre-
application work for projects specific to Denali, ANGDA,
ESTAR, and TransCanada, authorizing and funding two habitat
biologists. It is funded through RSA's from the Department
of Natural Resources.
Co-Chair Hawker asked why people were needed in state to do
pre-application work and why funding levels were being
leveled from one department to another. Ms. Rehfeld
suggested that there were several different ways to
structure an appropriation. Co-Chair Hawker requested more
information from the Department of Natural Resources on why
these positions were important.
LETA SIMONS, DIRECTOR, DIVISION OF SUPPORT SERVICES,
DEPARTMENT OF NATURAL RESOURCES, stated that the request was
a reimbursable services agreement (RSA) from the state
pipeline coordinator's office, which does right-of-way work
and bills industry for the work by the Department of Natural
Resources. The Department of Natural Resources bills the
industry and then the RSA is written to the Department of
Fish and Game, so industry is paying for these positions.
Representative Austerman asked if the state pipeline
coordinator's office is funded through general funds. Ms.
Simons responded that it is primarily funded by industry
through statutory designated program receipts.
3:04:52 PM
Co-Chair Hawker asked what work these positions would be
doing.
MARTY RUTHERFORD, DEPUTY COMMISSIONER, DEPARTMENT OF NATURAL
RESOURCES, via teleconference, reported that the requested
positions would work in the field helping the companies make
determinations on the permitting process and ensuring that
permits reflect the appropriate stipulations and protect the
environment.
Representative Austerman expressed concern for a more open
disclosure of the budget process. He questioned the way the
request was funded. He indicated his frustration about not
completely knowing where the money was going versus putting
the money into the general funds.
3:07:55 PM
Co-Chair Hawker MOVED to ADOPT Amendment O&G 2.
DEPARTMENT: Fish and Game
APPROPRIATION: Habitat
ALLOCATION: Habitat
ADD: $180,000 Inter-agency Receipts (1007)
EXPLANATION: The amendment will fund two Habitat
Biologists who will perform pre-application work for
Denali, ANGDA, ENSTAR and TransCanada including initial
planning, design review, field inspections, and pre-
construction permitting. Funding is through RSA's from
Natural Resources.
There being NO OBJECTION, it was so ordered.
3:08:41 PM
Ms. Rehfeld offered that Amendment O&G 3 had been requested
in the FY 2009 Supplemental Budget as a lapse extension of
an appropriation from FY 2008. It was for developing a
comprehensive training program to provide a prepared
workforce for the gas line.
Co-Chair Hawker asked if the appropriation carries forward
$100,000 in general funds, with $325,000 expected to be
available for lapse.
Ms. Rehfeld answered that the estimate carried into the next
fiscal year would be the $100,000 requested.
Co-Chair Hawker thought that was only a portion of the
anticipated lapse.
3:09:51 PM
GUY BELL, ASSISTANT COMMISSIONER, DIVISION OF ADMINISTRATIVE
SERVICES, DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT,
agreed that the anticipated lapse would be $325,000. The
requested amount of $100,000 would be for continuing the
training program development, and the remaining $225,000
would lapse to the general fund.
Co-Chair Hawker deferred Amendment O&G 3 to the Supplemental
Budget.
3:10:57 PM
Ms. Rehfeld commented that Amendment O&G 4 for $145,000 in
Section 16, subpart 2a, is for continuing efforts on the
comprehensive training program to provide a prepared Alaska
workforce for the Alaska Gas Pipeline.
Mr. Bell explained the two components to the request. The
first is the development, completion, and maintenance of a
web-based catalog of training programs in the state, which
will be completed in September 2009 for $50,000. After
2010, costs should go down to a lesser maintenance level.
The second component is for the development and
dissemination of regional workforce data. At this time
there is one full-time staff person to provide the data at
the statewide, regional, and local levels.
Co-Chair Hawker commented that the legislature has looked at
this item and determined that it may not be the same project
as in Amendment O&G 3, but it is related to training and
workforce development in the state. Because there was an
extra $225,000 lapse authority in FY 2009, the intent of the
Committee is to have the requested $145,000 be put into the
Supplemental Budget to further utilize the FY 2009 money.
Co-Chair Hawker asked if this would cause a problem. Mr.
Bell replied that it would not.
Co-Chair Hawker deferred Amendment O&G 4 to the Supplemental
Budget.
3:14:27 PM
Mr. Bell explained that Amendment O&G 5 is for the business
services component in the Department of Labor in the amount
of $585,000 to continue the training program for
apprenticeship development through the regional training
centers, private employers, and the University of Alaska.
Mr. Bell felt the Department had achieved a tremendous
momentum thanks to legislative investment. This year the
full balance is expected to be used on training programs,
although very little has been spent to date. The training
will be occurring in late March through June 2009. Mr. Bell
felt confident that the goals set for FY 2009 and FY 2010
would be met.
Co-Chair Hawker observed that when the money was originally
appropriated, the development of the apprentice programs was
meant to proceed in a regionally diverse and trade diverse
manner. He asked if there had been success in diversifying
around the state.
3:16:47 PM
Mr. Bell agreed that a diverse portfolio of occupations had
been developed including, non-destructive tester,
electricians, core drillers, truck mechanics, surveyors, and
welders. He also revealed that many relationships had been
developed throughout the state, particularly in the mining
industry.
Representative Gara agreed that thousands of jobs would be
needed when there is a pipeline and the goal would be to
have them filled by Alaskans. He wondered how to balance
"under training" and training people too early.
3:18:54 PM
Mr. Bell agreed it was a good question. The present focus
of training programs is on industry job needs for today, and
later on it will be for future jobs, such as the for the
pipeline. The goal is to have a job for each person
trained. At a later date, as the pipeline approaches, the
state will need to accelerate training for those jobs, as
well as backfilling jobs for those leaving to work on the
pipeline. These are challenges that need to be addressed.
Representative Gara commented that he was not worried about
over training, but was more concerned about under training.
He wondered if he should be concerned.
3:20:22 PM
Mr. Bell indicated that many steps have been taken to expand
training opportunities such as the legislative investment in
the Alaska Vocational Technical Center, the University of
Alaska, and the pipeline training center in Fairbanks. He
cautioned that it was important not to over train new
workers before they are needed.
Vice-Chair Thomas asked for a report regarding where the
individuals for training come from and where they work after
being trained.
Mr. Bell replied that he would get the detailed information
for the Committee. A comprehensive training report is
published annually by the Research and Analysis Section of
Labor and Workforce Development. It looks at every
publically-funded training program by course, the number of
trainees, the pre and post training wages, as well as
unemployment claims.
3:22:23 PM
Vice-Chair Thomas expressed concern about training too many
workers; he wondered what the Department was going to do
about supplying support service individuals, such as
doctors, dentists, teachers, and retirement counselors.
Mr. Bell discussed a focus to increase resident hire by
offering more trained Alaskans. He reported that about $1.7
billion leaves the state in non-resident hires. He noted
that the Division was working closely with the Alaska
Workforce Investment Board and the University of Alaska on
developing a long-term health care plan. The teaching
profession has not yet been addressed.
3:24:00 PM
Vice-Chair Thomas agreed with local resident hire, and he
expressed interest in a debt retirement program for students
coming home to find work.
Co-Chair Hawker MOVED to ADOPT Amendment O&G 5:
DEPARTMENT: Labor and Workforce Development
APPROPRIATION: Workforce Development
ALLOCATION: Business Services
ADD: $505,000 General Funds (1004) Inc OTI
EXPLANATION: Provide training and related instruction
to at least 70 apprentices at Regional Training Centers
for AGIA-related occupations.
Fund cooperative training agreements with business and
industry for registered apprentices and structured on-
the-job training for approximately 125 workers.
Current status: $322.0 of FY09 funding has been
obligated to date and other grant agreements are in the
negotiation process. Most training is expected to
occur March through June.
An anticipated lapse of $80,000 of the original request
is to be addressed in the supplemental bill.
Co-Chair Stoltze OBJECTED.
Co-Chair Hawker pointed out that the request was for
$585,000, but he offered the amendment to the FY 2010 budget
for $505,000. The remaining $80,000 would be picked up from
lapse funds coming forward from FY 2009.
Co-Chair Stoltze WITHDREW his OBJECTION. There being NO
OBJECTION, it was so ordered.
3:26:21 PM
Ms. Rehfeld moved on to Amendment O&G 6 which is also under
the Department of Labor and Workforce Development. The
request was for $130,000 under Section 16 in the FY 2010
budget.
Mr. Bell explained that the funding would be for an
educational specialist position in the Alaska Workforce
Investment Board. Funding was received in FY 2009 and a
lengthy recruitment proceeded. The job has been offered and
accepted by the current head of the Northwest Alaska Career
and Technical Center in Nome. He is under contractual
obligation to the Barrow School District through June 2009,
after which time he will be working at his new position in
Anchorage.
Co-Chair Hawker noted that the money appropriated this year
would have an $85,000 lapse component in the current budget,
so the amended amount would be $45,000 in general funds.
Co-Chair Hawker MOVED to ADOPT Amendment O&G 6:
DEPARTMENT: Labor and Workforce Development
APPROPRIATION: Workforce Development
ALLOCATION: Workforce Investment Board
ADD: $45,000 General Funds (1004)
EXPLANATION: The current head of the Northwest Alaska
Career and Technical Center has been selected to this
Education Specialist Position, which will oversee the
education components of the gasline strategic training
plan, including better training program and industry
coordination, curriculum sharing, and articulation.
$85,000 of original request to be addressed in the
supplemental bill.
There being NO OBJECTION, it was so ordered.
3:29:25 PM
Ms. Rehfeld turned to the Department of Law - Amendment O&G
7.
CRAIG TILLERY, DEPUTY ATTORNEY GENERAL, DEPARTMENT OF LAW,
reported that he had indicated to the legislature last year
the possibility of litigation with British Petroleum
Exploration Alaska due to the oil spill in 2006 from the
North Slope oil transit lines and the subsequent shut-down
of those lines due to extensive corrosion. Mr. Tillery
noted that the State of Alaska has been involved in the
investigation and has asked for $25 million over a number of
years. The legislature appropriated $4.7 million, but as a
result of delays, gathering and analysis of documents, and
analysis of the legal case, the investigation has not
proceeded as quickly as anticipated. The Department has
expended $2.8 million, leaving $1.9 million at the end of
the fiscal year. For next year, the Department will use
$1.9 million and, in addition, is asking for $3.5 million in
new monies.
Co-Chair Hawker questioned if the $1.9 million was really
obligated or if it was being extended as a lapse fund.
3:33:39 PM
Mr. Tillery clarified that the money is not obligated yet,
but will be obligated by the end of the year. The
Department took what would have been a larger FY 2010
request and reduced it to account for the money being
available in FY 2010.
Co-Chair Hawker asked Ms. Rehfeld how she arrived at a lapse
request in the original supplemental budget.
Ms. Rehfeld replied that there are several different ways to
structure appropriations. The initial review and request
was for an extension of the lapse state because it was
unknown if the Department of Law would be able to have that
money obligated by the end of the year or how it would
transpire. When the Department of Law indicated they would
be able to have the funds obligated and adjust the money for
FY 2010, it was brought before the Committee in that manner.
3:34:47 PM
Co-Chair Hawker questioned what sort of financial commitment
the legislature should be prepared to make and inquired
about the time frame. He wondered what the chances were for
a favorable outcome.
Mr. Tillery originally estimated the amount to be about $25
million over five years, but he observed it was an inexact
science. The original assumption was that more documents
would be available. As litigation proceeds, more documents
may appear. He judged there was no need to back off the $25
million estimate or the 5-year date. He agreed that the
expectation of a likely recovery is hard to determine, but
British Petroleum Alaska Extension has already admitted its
negligence in federal court.
3:36:00 PM
Representative Austerman asked for clarification that in FY
2010 the expected spending would be $5.4 million. Mr.
Tillery agreed that was correct. Co-Chair Hawker reiterated
that as the $1.9 million is obligated, there will not be a
lapse extension for that money, and $3.5 million is being
asked for in new funds.
Representative Gara asked how much work is being done by in-
house counsel. Mr. Tillery replied that most of the work is
being prepared by outside counsel. The money is also being
used for other experts and for document management.
Representative Gara stressed that outside counsel billing
rates are very high, in excess of $200 an hour, and he
believed that the attorney general's office should have a
standing litigation staff for research and briefing work so
the state could save outside counsel costs.
3:38:12 PM
Representative Gara asked if there was room for a staffing
request at this point. Mr. Tillery remarked that he did an
analysis of the case presented last year to the legislature.
If it had been done with less outside counsel and more in-
house staff, 25 percent could have been saved over the
course of the litigation. Representative Gara asked for the
hourly rates for outside counsel. Mr. Tillery replied that
the rates are $375 per hour for partner-level counsel and
$250 for associates.
Representative Austerman asked if this was the second year
of litigation of the 5-year projection. Mr. Tillery replied
that FY 2009 is the first fiscal year, but the litigation
has not begun yet as no formal complaint has been filed.
3:40:59 PM
Representative Kelly countered Representative Gara's
suggestion of hiring more in-house staff. He did not want
more in-house legal staff hired, but preferred using outside
legal staff.
Co-Chair Hawker signified that the state made a commitment
to pursue this course in the prior legislative session and
the legislature needed to make a strong stand that the state
was prepared to go all the way.
Co-Chair Hawker MOVED to ADOPT Amendment O&G 7:
DEPARTMENT: Law
APPROPRIATION: BP Corrosion
ALLOCATION: BP Corrosion
ADD: $3,500,000 Inc OTI
FUNDING SOURCE:General Funds - 1004
EXPLANATION:
The Department of Law (DOL) requests an appropriation
for FY10 in the amount of $3.5 million to continue the
pursuit of claims for penalties and lost revenues for
the 2006 Prudhoe Bay pipeline spills and production
shutdowns. DOL believes that it is unlikely that an
agreement can be reached to resolve the claims and
anticipates the need to file a court case later this
year or risk certain claims being time barred; hence
this request for an appropriation to fund the
anticipated litigation in FY10.
Due to delays in obtaining documents and information
from British Petroleum Exploration Alaska (BPXA), the
investigation was only recently completed. Based upon
information gathered to date, DOL anticipates making a
recommendation to seek recovery of the state's revenue
losses, as well as civil penalties and damages under
the state's environmental statutes.
In March and August of 2006, crude oil leaked from Oil
Transit Lines (OTLs) operated by BPXA at Prudhoe Bay.
In its Plea Agreement with the United States executed
in October 2007, BPXA acknowledged that it "acted
negligently by failing to adequately inspect and clean
the OTLs." The company is "required to operate the
OTLs as a reasonable operator." BPXA "did not expend
sufficient resources to address the complex issues of
corrosion in the OTLs." "BPXA failed to clean the OTLs
with a piece of equipment called a maintenance (or
cleaning) pig and inspect the pipe for corrosion
activity with a smart pig." These admissions are borne
out by our investigation.
BPXA's documents substantiate that these failings
resulted in shutdowns and reduced production of tens of
millions of barrels of crude oil in 2006-08. The loss
of revenue in royalties and taxes to the state for
those years potentially amounts to hundreds of millions
of dollars.
This is a complex matter with many documents. It is
anticipated that the FY10 litigation activities will
cost an additional $3.5 million for costs of counsel,
document management, experts, and litigation costs.
DOL anticipates the litigation will last at least three
to four years and that appropriations will be needed in
future years.
This issue is independent of gasline appropriations.
There being NO OBJECTION, it was so ordered.
3:42:30 PM
Ms. Rehfeld introduced the Department of Law's request in
Amendment O&G 8 for ongoing work, not specifically related
to the gasline appropriations, but the continuation of work
funded outside of the base for the past year.
TINA KOBAYASHI, CHIEF ASSISTANT ATTORNEY GENERAL, SUPERVISOR
OF THE OIL, GAS & MINING SECTION, DEPARTMENT OF LAW,
explained that this request represents the state,
particularly the Department of Natural Resources, and the
Department of Revenue, on cases and litigation involving the
state's proprietary interests in oil and gas and mining
resources. The Department of Law also represents the state
on royalty disputes, lease and unit issues, including the
Point Thomson litigation, tariff matters, property tax
cases, production tax cases, and corporate income tax
litigation involving oil and gas companies. This request
reflects the ongoing litigation that began earlier and will
continue.
Co-Chair Hawker asked for Ms. Kobayashi's comments on
opposing points of view concerning having larger in-house
staff versus hiring outside counsel for regularly
reoccurring cases. He questioned the amount of the request
as it related to a possible need to expand staff.
Ms. Kobayashi replied that the hourly billing rate for
outside counsel is significantly higher than the cost of in-
house counsel. She indicated that for specialty counsel the
fees can range from $200 to more than $600 an hour. She
remarked that part of the problem is that some of work is so
specialized that high rates for outside expertise are
necessary. If it were possible to train and retain that
sort of in-house expertise it would be more efficient. Part
of the problem is that when people are trained in-house and
gather additional expertise, they often move on to higher
paying positions in the private sector. She added that the
Department of Law develops a relationship with outside firms
that aid the state.
3:48:04 PM
Co-Chair Hawker concurred that she was talking about unique
positions that are occasionally used, albeit recurring
requests. He believed it was necessary to increase the base
level of attorneys who have the desire to be competent;
qualified attorneys for the state of Alaska in these
disciplines.
Ms. Kobayashi agreed that if more qualified attorneys were
available, more in-house work could be done.
3:49:27 PM
Representative Gara believed the state spends more money on
attorneys than needed. Some of the staff at the attorney
general's office is underpaid, yet the state ends up
spending more money in the long run. He suggested that a
lot of the legal research and brief work could be done in-
house while hiring outside legal staff for some of the trial
work. He also believed private outside staff could
supervise the Alaskan in-house staff doing much of the day-
to-day work. He remarked that often there are those who do
not like to hire staff as it does not look fiscally
conservative, but he concluded that it would be fiscally
conservative in the long run.
Co-Chair Hawker believed the conversation was relevant and
should be talked about at a later date.
3:51:29 PM
Co-Chair Hawker MOVED to ADOPT Amendment O&G 8:
DEPARTMENT: Law
APPROPRIATION: Civil Division
ALLOCATION: Oil, Gas and Mining
ADD: $5,109,200 Inc OTI
FUNDING SOURCE:General Funds - 1004
EXPLANATION:
The Department of Law's Oil, Gas and Mining
section continues to play a major role in the
State's top priority project related to the
construction of a gas pipeline and bringing
natural gas to market. In addition, the
Department of Law has a number of other major
projects underway that will continue to require
outside counsel and experts beyond the funding
included in the base operating budget. The most
noteworthy are Pt. Thomson litigation, ongoing
proceedings before the Federal Energy Regulatory
Commission (FERC) on TransAlaska Pipeline Service
(TAPS) tariffs issues; and two major corporate
income tax matters.
This issue is independent of gasline
appropriations.
There being NO OBJECTION, it was so ordered.
3:51:58 PM
Ms. Rehfeld referred to Amendment O&G 9.
Ms. Kobayashi remarked that when originally arriving at the
anticipated budget for litigation, it was thought that the
TAPS Strategic Reconfiguration would be spread out over a
number of fiscal years, but TAPS carriers are requesting
that the discovery and litigation schedule be compressed
into a smaller fiscal year. Therefore, the requested $1.9
million will be needed in the next fiscal year.
Co-Chair Hawker inquired if this was the first year that the
money has been requested. Ms. Kobayashi remarked that it
had been generally included in the $5.1 million, but is now
an addition as it was believed the cost would arise in the
next fiscal year. The Department must react to litigation
as new situations appear. It was not anticipated that the
compressed schedule would be requested.
3:54:28 PM
Co-Chair Hawker requested some background on the litigation.
He wondered what put this situation on the Department's
radar screen. Ms. Kobayashi replied that the Department had
been in discussion with the carriers and was aware that they
were undertaking reconfiguration of TAPS. In 2005, the
Department protested, for the first time, the inclusion of
some of the costs in the tariff. The Department protested
that there had been cost overruns and that the carriers had
been imprudent in their planning and expenditures for the
reconfiguration project. They had additional costs in 2006,
2007, and 2008, and anticipated additional costs in 2009.
Each year the Department has protested the inclusion of
those cost overruns. Due to other TAPS litigation, this
controversy was stayed by the Federal Energy Regulatory
Commission (FERC) and the Regulatory Commission of Alaska
(RCA). The Department is currently in front of FERC
discussing scheduling.
3:56:28 PM
Co-Chair Hawker asked what the consequence would be of not
funding this $1.9 million request.
Ms. Kobayashi replied that the Department would have a hard
time with this litigation. She remarked that in such cases
it takes a lot of discovery, document handling, assistance
from outside counsel, and the use of expert witnesses. If
this item is not funded, it would be hard to put forward the
case.
3:57:29 PM
Co-Chair Stoltze recollected that $5 million would be spent
on this case. Ms. Kobayashi agreed that that amount would
take the case all the way through the court of appeals.
Co-Chair Stoltze asked if another half million to $1 million
might be needed after the hearing process. Ms. Kobayashi
agreed that was correct. Co-Chair Stoltze inquired if the
stakes were hundreds of millions of dollars. Ms. Kobayashi
agreed.
Co-Chair Hawker asked for clarification if the hundreds of
millions of dollars were in consequence to the state's
treasury or just the change in the values of the tariffs.
Ms. Kobayashi replied that the hundreds of millions of
dollars was the impact on the possible future royalty and
production tax.
3:59:13 PM
Co-Chair Hawker MOVED to ADOPT Amendment O&G 9:
DEPARTMENT: Law
APPROPRIATION: Civil Division
ALLOCATION: Oil, Gas and Mining
ADD: $1,900,000 Inc OTI
FUNDING SOURCE:General Funds - 1004
EXPLANATION: The Department of Law is requesting
$1,900.0 to cover preparation and other related costs
associated with the TAPS Strategic Reconfiguration.
The State is protesting imprudent capital expenditures
on the TAPS Strategic Reconfiguration project that are
included in rates from 2005 forward.
This issue is independent of gasline appropriations.
There being NO OBJECTION, it was so ordered.
3:59:35 PM
Ms. Rehfeld moved on to Amendment O&G 10. This request was
for the Department of Natural Resources as a lapse extension
in the FY 2009 Supplemental Bill for ongoing work related to
gasline development.
Ms. Simons remarked that the original appropriation was for
$3.9 million, beginning in FY 2005. It was used in FY 2005,
FY 2006, FY 2007, and FY 2008 to do preliminary work under
the previous administration. With the change in strategy
and the new AIGA license approval, the Department is ready
to move forward again with spending on this appropriation to
do the same kind of work involving right-of-way permitting.
Co-Chair Hawker believed it commenced in FY 2004, not FY
2005. He emphasized that it had been out there for a long
time and wondered if the money would be used quickly or if
it was being stashed in the budget.
4:02:01 PM
MARTY RUTHERFORD, DEPUTY COMMISSIONER, DEPARTMENT OF NATURAL
RESOURCES, agreed with Co-Chair Hawker that this case has
been on the books for along time. The work done in FY 2005
and FY 2006 was associated with TransCanada's application
associated with the Stranded Gas Development Act, for some
right-of-way work on the Glennallen to Palmer route, work
for right-of-way applications for both an oil pipeline and a
gas pipeline from Point Thomson to Prudhoe Bay, and a
highway project for Dalton Highway east to the Anwar area.
Legal work was also associated with some of these issues.
Then there was a long time where nothing much occurred, but
now there is a great deal of activity for a potential right-
of-way from the North Slope south to Delta and into the Cook
Inlet. Under consideration are various project right-of-
ways, pinch points, material supplies for the pipeline,
access roads, and facility locations. Ms. Rutherford agreed
that the money had been on the books a long time, but she
believed more would be spent in the near future to good
state purpose.
Co-Chair Hawker acknowledged that there has been a
rethinking of many of the projects. He wondered if the
money would be prejudiced toward any one project over
another. Ms. Rutherford replied that it would not. She
noted that it was important to see a project move forward
for the benefit of the state of Alaska to take gas to the
market and see gas available for Alaskan needs.
Co-Chair Hawker wanted confirmation that a project not be
told that the legislature did not provide enough money to
follow up on permits. Ms. Rutherford assured Co-Chair
Hawker that this would not happen. The only advantages that
the AIGA licenses have are specific to the inducements
provided as part of the legislation. Co-Chair Hawker
impressed that it was important that the money for
permitting and application processing be available as needed
for any project.
4:06:52 PM
Representative Kelly inquired how much of the money would be
spent in FY 2010. Co-Chair Hawker interjected that the
number was for a $2.9 million lapse extension. Ms.
Rutherford replied that she was uncertain since the bottom
line is directly related to the speed at which some of the
applicants are moving their projects forward and to the
degree in which material sites can be found and have
contractors analyze them. Only $1 million of $3.9 has been
spent so far, but she believed spending would accelerate in
the future.
Representative Kelly referred to Amendments O&G 10, 11, 12,
13, and the millions involved, and wanted a good estimate on
what would be spent in the coming year. He related the
importance of the Committee's understanding how much money
would be spent in FY 2010.
4:10:16 PM
Ms. Simons declared that a lot being done is staging and it
is difficult to know from one month to the next how much
will be spent, but the Department knows when projects come
up short at the wrong time of the year because they can be
delayed significantly. Representative Kelly stressed the
need to reduce the budget since in FY 2009 and FY 2010 the
state will be $2.6 billion short. It is necessary to be as
precise as possible when giving out funds.
Co-Chair Hawker reminded the Committee that this item
request did not show up in the FY 2010 budget, but as a
lapse extension request that showed up in the FY 2009
supplemental budget. He noted that as the Committee moves
the amendments, the intent is that they will be incorporated
into the numbers section for the coming year.
Co-Chair Hawker deferred Amendment O&G 10 to be incorporated
into the FY 2009 supplemental budget.
4:13:39 PM
Co-Chair Hawker remarked that items numbers O&G 11, 12, and
13 are state coordinator gas pipeline issues. Amendment O&G
11 is a request from the Department for base funding for
three positions. Amendment O&G 12 is a request for $3.2
million for a state coordinator for gas pipeline work, and
originally was a lapse extension request. There are three
components: $391,000, $3.2 million originally in the
capital budget, and a $2.7 million lapse extension.
Co-Chair Hawker requested an explanation of the State
Coordinator - Gas Pipeline positions. He pointed out that
the request is for over $6 million. He wondered how the
money would be spent.
4:15:45 PM
Ms. Rehfeld suggested that each department respond to the
question.
Ms. Simons explained that there are three positions in the
State Coordinator - Gas Pipeline office being requested.
The requests for $3.2 million in general funds and $2.7
million lapse extension are directly related. The $391,700
was a FY 2009 one-time request for three positions for AGIA,
which is being requested again. The State Coordinator - Gas
Pipeline was hired in January and is ready to fill the
positions.
Co-Chair Hawker asked if the position was held by Mr. Myers.
Ms. Simons said that was correct. Co-Chair Hawker asked how
much of the FY 2009 request was left. Ms. Simons reported
that all monies left in personal services will lapse. Co-
Chair Hawker asked how much that was. Ms. Simons replied
that she would have to check. Co-Chair Hawker asked if the
amount being lapsed was included in the $2.7 million. Ms.
Simons offered to find out.
4:18:51 PM
Co-Chair Hawker asked how the $3.2 million would be spent.
Ms. Simons explained that it was the leftover funding from
FY 2009 for AGIA implementation. She reported that during
special session the Department of Natural Resources
requested $15 million for AIGA implementation, spread over
five years. The first year request was for $5.5 million,
the second year request was for $3.2 million, and the rest
was spread out for remaining years. The $5.5 million amount
was a one-time operating increment which will lapse at the
end of June 30. A portion of that money has been expended
and the Department would like the rest available for FY
2010, along with the $3.2 million. The money will be used
for managing the TransCanada license: for a project monitor,
for evaluating royalty inducement regulations, for proposals
for economic modeling, and for a commercial advisor.
4:21:25 PM
Co-Chair Hawker thought it seemed odd that of $5.5 million,
only $190,000 was spent. Ms. Simons explained that the
Department received the appropriation in August and it takes
time to write contracts and spend the money. Also, not all
positions have been filled yet. The Department feels as if
it is moving quickly on this matter.
Co-Chair Hawker noted that the coordinator was hired. He
wondered if the other two positions were filled. Ms. Simons
described the three positions: two natural resource
specialists and a pipeline engineer. There were also three
positions in the Governor's office - the State Coordinator,
Gas Pipeline and Inter-Governmental Coordinator. Co-Chair
Hawker asked if they were filled at the moment. Ms. Simons
said they were not filled at the moment, but were close to
being filled. Co-Chair Hawker requested job descriptions.
4:24:06 PM
Ms. Rutherford clarified the tasks expected of each job.
The natural resource specialist will be focusing on
regulations, permitting, coordination, and legal issues.
The pipeline engineer will be working to ensure that the
proposed project is developed and constructed according to
federal and state standards. The fourth position is a land
manager. Dr. Mark Myers is the fifth position and is the
state coordinator. She commented that the positions would
be highly challenged to handle the pending work load.
Co-Chair Hawker summarized that when looking at the request
for general funds, and not considering the statutory program
receipts, the Department was asking for carry-over authority
of $2.7 million, as well as for $3.2 million in new
authority. He asked how much of that total the Department
anticipates spending in the coming year. Ms. Rutherford
explained that contracts with monitoring oversight will
progress as the AGIA project progresses. The same is true
for the economic modeling and commercial advisor, although
they may not go beyond two years. The royalty regulations
should be wrapped up by December of next year. They are a
significant factor in the open season. There will be a need
for outside expertise.
Ms. Rutherford expected all of the $200,000 would be used;
however, $300,000 of the $2.7 may not be used. Conformance
with the license provision, royalty inducements, and the
contractors' duties will continue and will use the bulk of
the request. She pointed out that the Department is
required to use the state procurement process now that the
license has been issued. She maintained that it has been a
slow start due to understaffing.
4:27:58 PM
Co-Chair Hawker asked if $2.7 million was on top of $3.2
million. He summarized what he thought he had heard. Ms.
Rutherford clarified that the $15 million spread had never
really been combined. She clarified that the $3.2 was a
combination of factors. Within the $5.5 million this year
and $3.2 next year was $300,000 for this fiscal year and
$200,000 for FY 2010 for support to the pipeline
coordinator's office.
Co-Chair Hawker surmised that there was a great deal of
confusion about the appropriations. He reiterated his
understanding of the requests and observed that information
was lacking. He voiced concern about off-budget agencies
and the loss of accountability.
4:31:24 PM
Ms. Rehfeld emphasized that it is not the intention of an
agency to be off-budget. She suggested a number of ways of
dealing with the appropriations, such as putting the funds
in a multi-year operating appropriation that appears before
the subcommittee on an annual basis or in a capital project
request. She voiced appreciation for the discussion and
recognized the need for more clarification.
Ms. Rutherford added that the $15 million is almost all
contractual service money and is viewed as a capital project
where the monies can be extended because they are used for
outside contracts. The $391,700 amount is for an operating
item; staffing and travel for commodities contractual
services.
4:33:56 PM
Co-Chair Hawker pointed out that the pipeline coordinator's
office is an ongoing position and he suggested putting it in
the operating budget which comes before the legislature
every year.
Ms. Rutherford clarified that the $391,700 is associated
with the AGIA inducement position. There is currently a
discussion about whether or not the Denali Project
coordinator could also coordinate the AGIA effort. It is a
requirement to have an AIGA coordinator for the project.
Once the license responsibility is done, that function goes
away, and there may or may not be a project at that time.
4:36:40 PM
Co-Chair Hawker commented that the larger numbers cause
concern.
Representative Austerman commented that he agrees with
getting a handle on the request. He suggested lapsing the
$2.7 million and giving the Department the $3.2 million.
Then the Department can make a more informed request in the
supplemental budget.
Co-Chair Hawker wished to go forward with the decision after
taking an at-ease.
Representative Gara agreed that it is hard to predict how
much money will be used for AIGA. He was concerned that the
supplemental budget may not pass any faster than the
operating budget.
4:39:08 PM
Representative Kelly thought the discussion was helpful due
to the multiple years and multiple projects. The
availability of the "top players" has been scarce during
this process and would have proved helpful.
4:40:40 PM AT EASE
5:07:48 PM RECONVENED
Co-Chair Hawker reviewed the components of Amendments O&G 11
and 12.
Co-Chair Hawker commented that the state coordinator
position is an operating budget item. He stated his intent
to incorporate the amendments into the FY 2010 budget.
5:11:11 PM
Co-Chair Hawker MOVED to ADOPT Amendment O&G 11:
DEPARTMENT: Natural Resources
APPROPRIATION: Resource Development
ALLOCATION: State Coordinator - Gas Pipeline
ADD: $3,591,700 General Fund (1004) Inc OTI
EXPLANATION: This amendment includes funding for three
positions that will assist with the review and
coordination of all state and federal permits and
processes, to ensure that all state and federal
environmental requirements have been completed, and
assist with title work for natural gas transportation
projects in Alaska, including AGIA implementation.
A $3.2 million FY 2010 capital project request for this
purpose will be deleted from the capital budget. An
anticipated lapsing balance of $2.7 million GF of an
operating appropriation for this purpose will be
addressed as a supplemental request.
Co-Chair Stoltze OBJECTED.
Co-Chair Hawker MOVED to AMEND Amendment O&G 11 to change
$3,591,700 million in general funds, a one-time increment,
to $3.2 million. This is money that was formerly in the
capital budget. The amount of $391,700 will be shown as a
regular increment as it was originally submitted to the
legislature in the Section 16 breakdown.
Representative Austerman asked for clarification, which Co-
Chair Hawker provided.
Co-Chair Stoltze WITHDREW his OBJECTION.
There being NO OBJECTION, it was so ordered.
Representative Kelly asked that technical amendments be
included in the budget. Co-Chair Hawker assured that would
happen.
5:14:23 PM
Co-Chair Hawker remarked that Amendment O&G 12 would be
deferred to the supplemental budget.
Ms. Rehfeld discussed Amendment O&G 13 - $2.5 million for
Statutory Program Receipts for the Pipeline Coordinator.
This is multi-agency work related to AIGA, the Denali
Project, ANGDA, and ENSTAR right-of-way.
Co-Chair Hawker asked for delineation between the Pipeline
Coordinator in Amendment O&G 13 and the State Coordinator
Gas-Pipeline discussed in the previous two amendments. Ms.
Simons described the State Coordinator-Gas Pipeline as a new
component formed to deal with AGIA and the gas pipeline.
The State Pipeline Coordinator's Office (SPCO) is part of
the joint pipeline office which exists to coordinate right-
of-way permitting and oversight of common carrier pipelines,
the biggest of which is TAPS.
Co-Chair Hawker asked Ms. Simons to explain what Statutory
Designated Program Receipts (SDPR) are and how they differ
from a general fund appropriation. Ms. Simons indicated
that a SDPR is a request for authorization to receive
funding from a third party outside of state government, so
anyone making an application for a right-of-way would pay
for the work to be done. This gives the Department
authority to collect that money.
Co-Chair Hawker asked if it was an adequate amount of money.
Ms. Simons declared it would be sufficient.
5:18:19 PM
Co-Chair Hawker MOVED to ADOPT Amendment O&G 13:
DEPARTMENT: Natural Resources
APPROPRIATION: Resource Development
ALLOCATION: Pipeline Coordinator
ADD: $2,500,000 Statutory Designated Program Receipts
(1108)
EXPLANATION: To fund work required for multi-agency
coordination and review of AGIA, Denali, ANGDA and
ENSTAR right-of-way pre-application work. Under AS
38.35, the pre-applicant, applicant or lessee is
required to reimburse the State for these efforts.
Authorization is needed to receive funds to do work for
applicants.
There being NO OBJECTION, it was so ordered.
5:19:12 PM
Ms. Rehfeld described Amendment O&G 14 as a Department of
Revenue request. It was one of the original Section 16
items.
Co-Chair Hawker asked why the amendment is a unique request.
PAT GALVIN, COMMISSIONER, DEPARTMENT OF REVENUE, via
teleconference, replied that Amendment O&G 14 was needed to
do analysis of the state's fiscal system as the open season
approaches. This analysis would be above and beyond normal
operations
Co-Chair Hawker inquired if the money would be prejudiced
toward any AIGA implementation or if it could be used for
another project line.
Commissioner Galvin explained that the actual language says
it is to be used for gas commercialization, so it does not
have to be limited to the AIGA project. It could be
transferable.
5:22:24 PM
Representative Gara pointed out that $2.5 million is a round
number and wondered how accurate it was. He wondered if the
same amount of work could be done for less. Commissioner
Galvin explained that the amount for FY 2010 was $771,000
and there is a good chance it may not all be spent.
Co-Chair Hawker recalled that the amount of money spent on
such projects since 2004 was $183 million. He was concerned
whether the state was getting value for the money.
Representative Fairclough asked how the funds for a $3
million capital appropriation were used. Commissioner
Galvin thought they might be part of a multi-year
justification. For the current fiscal year, the Department
contracted with Gaffney Cline & Associates to analyze the
state's fiscal system as it relates to the interaction of
oil and gas. The Department has also continued to fund work
that Goldman Sachs has been doing in analyzing the financing
of the project and the various roles that state and federal
government should play. A lot of the funds are being used
for contractual work on the AIGA application and evaluation.
5:26:26 PM
Co-Chair Hawker added that the $3 million was a 2007
multiple-year operating appropriation, of which, as of
January 15, $650,000 was unencumbered. He asked if that
balance would be utilized in FY 2009.
Commissioner Galvin replied that he did not know, but
offered to find out. He thought there was only about
$200,000 left. Co-Chair Hawker assumed that the money would
be spent.
Co-Chair Hawker concluded that he had discomfort with the
number, but no basis to challenge it.
Representative Joule asked when the work would be completed.
Commissioner Galvin thought it would be done by next
legislative session. If not, the Department would request a
supplemental.
5:29:34 PM
Co-Chair Hawker MOVED to ADOPT Amendment O&G #14:
DEPARTMENT: Revenue
APPROPRIATION: Administration and Support
ALLOCATION: Natural Gas Commercialization
ADD: $771,000 General Funds (1004) Inc OTI
EXPLANATION: This funding is needed to respond in
FY2010 to issues associated with the holding of open
seasons in the fall of FY2010 by the major gas line
projects. The administration has stated that when
economic information becomes available, they will
analyze the economics underpinning proposed major gas
line projects prior to an open season and assess the
need for changes in the state's fiscal system. The
work will be on a tight time frame as any changes
ideally should be in place prior to or during the open
season and will require the assistance of contractors.
The need for economic evaluations is critical in moving
gas line projects along as quickly as possible. DOR has
the ability to contract with the appropriate financial
institutions to facilitate the evaluations. This
funding has typically been managed through the
Commissioner's Office appropriation.
There being NO OBJECTION, it was so ordered.
5:29:54 PM
Representative Austerman questioned if OMB could put
together a yearly report for all money received and how it
was used. This could be discussed in subcommittees in the
future, instead of at this kind of meeting at the end of
session. Co-Chair Hawker suggested that a capstone report
would be great.
Representative Austerman thought such a report would provide
a better understanding of the entire budget. Co-Chair
Hawker suggested that it would show how the $183 million
already allocated was spent.
5:31:59 PM
Ms. Rehfeld offered that a process is needed for discussing
cross-departmental items. Co-Chair Hawker pointed out that
this discussion has been helpful and very productive. Ms.
Rehfeld appreciated the work of the Committee.
5:34:52 PM
Representative Gara MOVED to ADOPT Amendment 33:
DEPARTMENT: Health and Social Services
APPROPRIATION: Behavioral Health
ALLOCATION: Behavioral Health Grants
ADD: $210,000 General Fund/Mental Health
(1037)
ADD INTENT: It is the interest of the
legislature that at least $210,000 be expended to
service individuals on waiting lists for Heroin
addiction treatment at facilities that have a
waiting list. The funding is to be utilized in
addition to any other behavioral health grants
that a heroin addiction treatment facility may
qualify for, and it shall not prevent such a
facility from qualifying for any additional
behavioral health grant funds.
EXPLANATION: The funding is intended to expand
the capacity of Heroin treatment facilities for
individuals that are on a waiting list. This
supplemental funding is to be targeted to Heroin
addiction treatment facilities that have a waiting
list and not prevent those facilities from
qualifying for other behavioral health grant
funds.
Co-Chair Hawker OBJECTED.
Representative Gara pointed out that there are two heroin
addiction treatment centers in the state, in Anchorage and
in Fairbanks. The treatment uses is a drug called methadone
which has a good effectiveness rate. The centers are funded
by behavioral health grants. Both centers have substantial
waiting lists, and the behavioral health grants, as funded,
are not adequate as they are distributed among the various
state treatment centers for alcoholism and substance abuse.
Representative Gara related that the funds target waiting
lists. Federal law requires that pregnant women be treated
first. Some who are desperate for treatment cannot get
treatment, which can lead to felonies by both users and
dealers. By not eradicating waiting lists, more drug
dealing occurs on the streets. For $210,000 people who want
to kick their heroin addiction can be treated, the amount of
crime can be reduced, and law enforcement costs can be
saved. He maintained that funding this request is smart,
humane, and would save money. He shared a story of a client
on the waiting list. He discussed behavioral grants that
were not fully funded.
5:41:34 PM
Co-Chair Hawker voiced concern about setting a precedent for
"cherry picking" in the human services area at short notice.
He agreed that the request had merit; however, it was not
circulated to the Committee during the budget cycle. There
is $70 million designated to the behavioral health category
already. He cautioned against circumventing the grant
request process and he questioned what law enforcement's
experience with the clinics has been.
Co-Chair Hawker stated that he was sympathetic to the
legislature's and the Governor's commitment not to expand
programs. He wanted assurance from the administration that
an amendment such as this one would survive a veto and would
be received positively by the other body.
5:46:23 PM
Representative Crawford reported that he was familiar with
the center for drug problems in Anchorage, as his wife was
the program nurse. He was familiar with many people who
work there. He believed support for the center was in the
Governor's original request, but had been reduced. He
recalled that, at times, the waiting list had been reduced
to almost zero. He pointed out that the request provides
just a portion of the match; addicts also pay for the
program according to a sliding scale. There are also other
grants awarded to the center. He maintained that this
request would help save lives and money, in the long run.
He emphasized that he was very much in favor of the
amendment.
5:49:51 PM
Representative Austerman stated that he cannot support
Amendment 33 or Amendment 34, regarding the Center for the
Blind. He maintained that there are many programs not being
funded to the full extent needed; however, this meeting was
not the right place or time to bring the requests before the
Committee. He appreciated Representative Gara's intention,
but preferred to work within the existing budget process.
Representative Joule thought the amendment presupposes how
the Department would spend the $1 million. He spoke in
opposition to the amendment, saying he would rather hear
from the Department how the money allocated would be used.
He spoke of personal experience on boards of treatment
centers.
5:52:35 PM
Representative Kelly commented that the government is not
the only place to turn to for this sort of financial help.
He suggested the program try and get money from local
churches and other community organizations.
Co-Chair Stoltze shared that he has had to make tough
choices and show restraint for issues regarding his own
district. Co-Chair Hawker agreed that he would also have
liked to request more money for specific items such as state
troopers, but the process did not allow it.
5:55:17 PM
Vice-Chair Thomas interjected that he wanted to go on record
as not encouraging drug dealing. He voiced support for the
committee chair.
Representative Gara suggested it would be important to know
what law enforcement and health and human services have to
say about the quality of care provided at the treatment
centers. He offered to research their views.
Representative Gara reported that he was attempting to be
efficient by proposing the smaller amount, due to less money
being available for the treatment centers. He thought there
would be support by the other body.
Representative Gara thought that asking for funds for the
two centers, rather than just for the one in his district,
may have negatively affected the chances of receiving
funding. He suggested that the amendments might be more
appropriate for a one-time funding in the capital budget.
Representative Gara WITHDREW Amendment 33.
5:59:47 PM
Representative Fairclough announced that the PFD application
deadline is on March 31. Part of the fund is going to a
Pick, Click, and Give campaign, thanks to the Rasmuson
Foundation, United Way, and Vice-Chair Thomas. There are
programs that are not receiving funding that could benefit
by this program.
6:01:29 PM
Representative Gara MOVED to ADOPT Amendment 34:
DEPARTMENT: Department of Labor and Workforce
Development
APPROPRIATION: Division of Vocational Rehabilitation
ALLOCATION: Independent Living
ADD: $70.0 General Funds (1004)
EXPLANATION:
Outreach to Visually-Impaired in Rural Communities
This increment would allow The Center for the Blind and
Visually Impaired to reach out to provide life skill
and services to visually impaired Alaskans in those
small communities, where no or few services are
offered. The Increment was recommended by the Division
and no forwarded to the Legislature by the Governor.
Co-Chair Hawker OBJECTED.
Representative Gara explained the increment for The Center
for the Blind and Visually Impaired, which would provide
training for the visually impaired outside urban centers.
The request was requested by the Division, but not accepted
by the Governor.
6:03:07 PM
Co-Chair Hawker acknowledged the numerous legitimate needs
in the communities of Alaska. He reiterated the need to
follow the budget process. The proper process is important
so as not to put committee members, especially those from
rural communities, in an uncomfortable position.
6:04:44 PM
Representative Gara wanted to raise the issue, but not put
anyone on the record or call for a vote. He believed it was
important to keep learning new things as the session
progresses. He announced that most of the service
organizations do not have professional lobbyists to guide
them through the legislative process.
Representative Gara WITHDREW Amendment 34.
6:06:40 PM
Vice-Chair Thomas withdrew Amendment 5A from the previous
day's discussion. It involved having the Alaska tourism
industry take a position that may negatively affect the
communities he represents.
Representative Kelly reported on a letter he received, which
indicated that people are listening to these meetings. He
appreciated Vice-Chair Thomas's flexibility.
6:09:39 PM
Representative Austerman reported that he was a participant
in sending a letter to the tourism industry concerning the
halibut issue, requesting that they look at the biological
issues as well as the economic issues. There has been no
response from the industry. Vice-Chair Thomas thought there
was a response now.
Co-Chair Stoltze spoke in support of Amendment 5B and of the
good things the tourism industry is doing.
6:12:09 PM
Co-Chair Hawker thanked everyone for their contribution to
the discussion. He believed that the amendment process was
clear and the bill could move out of Committee at this time.
Co-Chair Stoltze MOVED to report CSHB 81 (FIN), as amended,
out of Committee with individual recommendations, and that
authorization be given to the Legislative Finance Division
and to Legislative Legal Services Division to make any
necessary technical and/or conforming amendments. There
being NO OBJECTION, it was so ordered.
CSHB 81 was REPORTED out of Committee with a do pass
recommendation.
Co-Chair Stoltze MOVED to report CSHB 83 (FIN), as amended,
out of Committee with individual recommendations, and that
authorization be given to Legislative Finance and the
Legislative Legal Services to make any necessary technical
and/or conforming amendments. There being NO OBJECTION, it
was so ordered.
CSHB 83 was REPORTED out of Committee with a do pass
recommendation.
ADJOURNMENT
The meeting was adjourned at 6:15 PM.
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