Legislature(2009 - 2010)
04/17/2009 04:54 PM House FIN
| Audio | Topic |
|---|---|
| Start | |
| SB75 | |
| SB165 | |
| SB177 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
April 17, 2009
4:54 p.m.
4:54:51 PM
CALL TO ORDER
Co-Chair Stoltze called the House Finance Committee meeting
to order at 4:54 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
James Armstrong, Staff, Co-Chair Stoltze; John Bitney,
Staff, Speaker John Harris; Eddy Jeans, Director, School
Finances and Facilities, Department of Education and Early
Development; Frank Richards, Deputy Commissioner, Highways &
Public Facilities, Department of Transportation and Public
Facilities; David Teal, Director, Legislative Finance
Division; Karen Rehfeld, Director, Office of Management and
Budget, Office of the Governor; Representative Nancy
Dahlstrom, Sponsor; Jesse Cross, Staff, Senator Johnny
Ellis; Senator Kevin Meyer, Sponsor; Jennifer Yuhas,
Legislative Liaison, Department of Fish and Game
PRESENT VIA TELECONFERENCE
Ron Pollock, Anchorage Community Development Authority; Pat
Gamble, President, CEO, Alaska Railroad Corporation; Andy
Szczesny, Owner, Alaska Fish and Float; Monte Roberts, Kenai
River Professional Guide Association, Soldotna; Robert
Jaynes, Self; Charles Swanton, Director, Division of Sport
Fish, Department of Fish and Game.
SUMMARY
CSSB 75(FIN)
"An Act making and amending appropriations,
including capital appropriations, supplemental
appropriations, and appropriations to capitalize
funds; and providing for an effective date."
HCS CSSB 75 (FIN) was REPORTED out of Committee
with a "do pass" recommendation.
CSSB 177(FIN)
"An Act relating to an exception for professional
fishing guide services in the Kenai River Special
Management Area; relating to the licensing and
regulation of sport fishing operators and sport
fishing guides and licensing and registration of
sport fishing vessels; and providing for an
effective date."
HCS CSSB 177 (FIN) was REPORTED out of Committee
with a "do pass" recommendation and with a new
fiscal note by the Department of Fish and Game.
SB 165 "An Act authorizing the transfer of two parcels of
land from the Alaska Railroad Corporation to the
Municipality of Anchorage; and providing for an
effective date."
SB 165 was REPORTED out of Committee with a "do
pass" recommendation and with zero fiscal note #1
by the Department of Commerce, Community and
Economic Development.
4:55:36 PM
CS FOR SENATE BILL NO. 75(FIN)
"An Act making and amending appropriations, including
capital appropriations, supplemental appropriations,
and appropriations to capitalize funds; and providing
for an effective date."
Co-Chair Hawker MOVED to adopt Version U of CSSB 75 (FIN) as
the working draft before the committee. There being NO
OBJECTION, it was so ordered.
4:56:33 PM
Co-Chair Stoltze reported that the bill had been previously
heard in public testimony.
AT-EASE: 4:57:21 PM
RECONVENED: 5:00:46 PM
Co-Chair Stoltze requested that Mr. Armstrong report the
changes.
5:01:16 PM
JAMES ARMSTRONG, STAFF, CO-CHAIR STOLTZE, stated that there
were 10 changes to the CS. The first change was found on
Page 2, Line 27. This was an intent language request made by
Vice-Chair Thomas and Representative Austerman.
Vice-Chair Thomas related that the change reflects the
reviewed Alaska Energy Authority (AEA) grants in the budget.
5:02:22 PM
Mr. Armstrong reported that contingent language concerning
the Port of Anchorage had been removed from the bill. The
modification to the language could be found on Page 30,
lines 25 through 27. The new language states that the site
for the M/V Susitna landing will be determined by a
recommendation from the U.S. Army Corps of Engineers.
Co-Chair Stoltze commented that the issue was contentious.
The vessel was being constructed in Ketchikan and the change
in the bill was intended to encourage the parties on the
Anchorage side to facilitate a solution.
5:03:50 PM
Mr. Armstrong explained that the change on page 43, Line 24,
was a title change.
Representative Gara asked about the Alaska Wildlife
Conservation Center. Co-Chair Hawker explained that it was a
facility at the turn-off to the Portage Glacier on the
Seward Highway. Representative Gara thought that the center
was a private entity. Co-Chair Hawker replied that the
center was a 501(c) 3, and was working intimately with the
Department of Environmental Conservation (DEC), and is where
Wood Bison are housed.
Representative Foster inquired about the number of grants
listed on Page 43. He wondered if the Alaska Wildlife
Conservation Center paid for its peripheral expenses. Co-
Chair Hawker related that the facility was one of the first
major stops for cruise ship tour busses. Annually 250,000 to
300,000 cruise passengers pass through the area. The funds
provide an economic base to sustain facilities once they
have been established.
Representative Gara wondered why the facility would need
extra funding in addition to the tourist dollars it
generated. Co-Chair Hawker replied that the funds would go
toward capital expansion to provide services for cruise ship
passengers.
5:07:04 PM
Co-Chair Stoltze pointed out to the committee that the non-
profit category contained many worthy projects. He felt that
funding for non-profits as not unusual, especially
organizations involved in conservation and research. Co-
Chair Hawker added that this facility was deeply committed
to the housing of Wood Bison and was receiving no
compensation for doing so.
Mr. Armstrong offered to provide more information to
Representative Gara concerning the issue.
Mr. Armstrong reported on page 53, Line 17, which corrects
the House District numbers for certain projects.
5:08:46 PM
Mr. Armstrong announced that the following items were
language sections. Section 13, intent language, and language
in Sections 20 and 21, which deal with in-state gas, have
been removed from the work draft.
Mr. Armstrong turned to Section 36, Page 77, Line 31,
through Page 38, which reflects a request by Representative
Kelly for a late reappropriation title change.
Representative Kelly reported that the request from his
borough was to reappropriate funds for the improvement of
Pioneer Park parking and access. The net change would be
zero.
Co-Chair Stoltze informed the committee that following the
reappropriation process procedures, there has been
coordination with the other body in the reappropriation
process.
5:10:50 PM
Mr. Armstrong reported the last change on page 80, Lines 1
through 4, which was a drafting error. The technical change
was made.
Representative Gara had a question about the gas line
language in Section 13, which was removed from the bill.
5:12:38 PM
Co-Chair Hawker thought that language that had previously
been in the bill was more appropriately found in the
operating budget. He felt that a solution to the questions
that had been raised in the supplemental budget process
would be reflected in the operating budget.
5:13:40 PM
Co-Chair Stoltze MOVED to adopt Amendment 1:
Page 78, line 29, through page 79, line 2:
Delete all material
Reletter the following subsections accordingly.
Page 79, line 4:
Delete "and (c)"
Page 797, line 7, following "for"
Insert "purchase, restoration, and display of
historical art and artifacts in conjunction with
statehood celebrations, energy-related issues, and"
Page 84, line 1:
Delete "37(d),"
Co-Chair Hawker OBJECTED.
JOHN BITNEY, STAFF, SPEAKER JOHN HARRIS, explained that the
language in the bill would be simplified with the removal of
Line 29, Subsection C. The purpose for the purchase of the
art would be moved to Subsection D, which would give
Legislative Council broader discretion for the use for the
funds.
Co-Chair Hawker WITHDREW his objection. There being NO
OBJECTION, the amendment was ADOPTED.
5:15:16 PM
Representative Foster hoped to see future appropriations for
Native Art that would benefit other areas of the state. He
felt that a limited number of people in the state would have
the opportunity to travel to Juneau to see historical art.
Co-Chair Hawker clarified that the language that referred to
the capital city is no longer in the bill. The language now
recognized that the state has an interest in acquiring
historical art and artifacts in conjunction with the
statehood celebration.
5:17:48 PM
Representative Salmon MOVED to adopt Amendment 3:
Page 63, line 1:
Delete "sec. 21"
Insert "sec. 22"
Page 67, following line 11:
Insert a new bill section to read:
"* Sec. 19. DEPARTMENT OF EDUCATION AND EARLY
DEVELOPMENT. The sum of $183,000 is appropriated from
the general fund to the Department of Education and
Early Development for payment as a grant under
AS 37.05.316 to the Tanana City School District for
debt repayment for the fiscal year ending June 30,
2009."
Renumber the following bill sections accordingly.
Page 82, line 4:
Delete "sec. 42(a)(2)"
Insert "sec. 43(a)(2)"
Page 84, line 20:
Delete "Section 43"
Insert "Section 44"
Page 84, lines 25 - 27:
Delete "22(b), 23(b), 23(c), 24(b), 25(d) - (f), 26(b)
- (e), 26(g) - (i), 30, 34(c), 34(e), 34(f), 37(a), 38,
39, 40(a)(1), 40(a)(2), 40(a)(4), 40(c), 40(d), and 41
- 43"
Insert "23(b), 24(b), 24(c), 25(b), 26(d) - (f), 27(b)
- (e), 27(g) - (i), 31, 35(c), 35(e), 35(f), 38(a), 39,
40, 41(a)(1), 41(a)(2), 41(a)(4), 41(c), 41(d), and 42
- 44"
Page 84, line 30:
Delete "19 - 21, 45, 46(a), and 46(b)"
Insert "19 - 22, 46, 47(a), and 47(b)"
Page 85, line 1:
Delete "22 - 41"
Insert "23 - 42"
Page 85, line 2:
Delete "secs. 49 and 50"
Insert "secs. 50 and 51"
Co-Chair Stoltze objected.
Representative Salmon said that the amendment corrects a
debt incurred by the Tanana City School District in 2008.
He explained that the district was a single site school
district and that Tanana was a fist class city supported by
a three percent sales tax. The city fell into debt for the
following reasons; the unexpected hike in the cost of fuel,
the high cost of electricity, the high cost of
transportation, a doubling of health insurance costs, and a
school district advance of $105,000 to pay for fuel.
5:20:00 PM
Co-Chair Stoltze asked about the number on Line 8.
Representative Salmon clarified it was for $150,000.
Representative Fairclough thought the amendment was written
off of the old version of the bill, which resulted in a page
differential. She suggested making the amendment a
Conceptual Amendment.
Representative Salmon agreed to make it a Conceptual
Amendment.
5:21:09 PM
EDDY JEANS, DIRECTOR, SCHOOL FINANCES AND FACILITIES,
DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT, related that
the Tanana School District was $200,000 over budget. In
addition, enrollment was down. The school's superintendent
indicated that they were making reductions to the 2009
budget. An increase in enrollment was anticipated for the
2009 school year, which would help the city with increases
in the public school funding formula.
Co-Chair Stoltze asked about possible stimulus funds. Mr.
Jeans reported that there was a possibility that the city
would be receiving some stimulus state stabilization
funding. Categorical funds that will be received through the
stimulus package total $65,000.
5:22:52 PM
Representative Gara summarized the budget issues in Tanana.
He felt that the $150,000 request was, when compared to
other appropriations passed by the committee, equivalent to
"spare change".
5:25:02 PM
Vice-Chair Thomas asked who the Tanana debt was specifically
owed to. Mr. Jeans responded that there were a variety of
invoices. He believed that the city had overextended the
budget, and failed to make the budget adjustments necessary
based on the revenue being collected. Vice-Chair Thomas
asked if this was the only school district in Alaska that
was in this position. Mr. Jeans understood that it was.
Representative Salmon reported that the three items that
contributed to the debt were: high fuel, health insurance,
and teacher contracts.
5:26:36 PM
Representative Kelly wondered if there was a mechanism for
acquiring a loan for the city. Mr. Jeans replied that the
department was currently working with the Department of
Commerce and Economic Development (DCED) to craft an energy
loan to aid with fuel costs. Representative Kelly suggested
combining services in the district with the Yukon Koyukuk
area. Mr. Jeans replied that Tanana had indicated that they
did not want to combine services.
Co-Chair Stoltze asked Mr. Jeans if he had testified before
the other body on the issue. Mr. Jeans said he had not.
Co-Chair Stoltze MAINTAINED his objection.
Representative Kelly encouraged Mr. Jeans to continue to
work on finding funding sources. Co-Chair Stoltze stated
that there had been numerous discussions on the issue. Mr.
Jeans reported that the Department of Education and Early
Development (DEED) was bound by law to assist the district
in balancing the budget.
5:28:55 PM
Representative Foster reported that the 30 schools in his
district had made their budgets over the years. He felt that
if special consideration was going to be made for the Tanana
district, the same should be done for all districts.
Representative Gara requested clarification that this was
the only school with deficit spending. Mr. Jeans clarified
that the expenditures pattern had exceeded income revenue.
The department had not been aware of the problem until
December 2008. When the budget was reviewed in July 2008,
the numbers had aligned, but when the financial statement
was issued in November 2008, it revealed that the district
had overspent in 2007. The debt has compounded since that
time.
Representative Gara pointed out that he represented a
charter school in his district. He said that exceptions had
been made for charter school funding. He thought that the
amount that was being requested to help Tanana was
insignificant. He reiterated his support for the amendment.
5:32:52 PM
Representative Crawford wondered how being $150,000 short
would affect the district. Mr. Jeans related that the school
has not had the funds to pay several bills. The department
has requested that the superintendent submit next year's
budget early in order to identify areas where reductions can
be made. He pointed out to the committee that the charter
school bill was to fix an inequity in the public school
funding formula. In the case of Tanana, the problem stems
from a decline in enrollment and the lack of resource
management as enrollment declined.
Representative Crawford asked if the school would be shut
down early due to lack of funding. Mr. Jeans thought that
additional staffing reductions would be required. He
stressed that the department would be working with the
school district over the next 2 years to balance the budget.
5:35:32 PM
Representative Salmon observed that the Title 1 money is not
guaranteed. If it could be guaranteed it would help the
school district. He opined that smaller school districts
with high overhead face unique challenges.
Co-Chair Stoltze related that the issue was complicated and
that the intention was not to set a precedent.
Representative Foster asked if Tanana was a single site
school. Mr. Jeans replied that Tanana was a first class
city, single site school district. Representative Foster
understood that the district had a lot of staff for a small
population base. Mr. Jeans countered that the staff was
minimal, but that there was a superintendent on contract.
5:39:01 PM
Representative Gara asked how many teachers were employed by
the district. Mr. Jeans said he did not know.
Representative Salmon thought there were 4 or 5 teachers and
a position that was a combination of a principal and a
superintendent.
Co-Chair Hawker recognized that the department was obligated
to assist the district in resolving the issue. He thought
that aiding the district in working out its financial
problems, rather than granting a "bailout", would result in
a healthier school overall.
5:40:33 PM
Vice-Chair Thomas wanted assurances that the department
would work for a successful outcome for the Tanana School
District. He expressed difficulty in voting on the amendment
because it was "close to home".
Mr. Jeans said he could not assure the committee that Tanana
would receive the federal energy loan. However, by law, the
department was bound to work to get the district's budget
back in balance.
5:42:13 PM
Representative Gara understood that the district would be
force to let go of two teachers. Mr. Jeans clarified that
one teacher had already been cut from the budget. The Energy
loan discussion had been recent. Representative Gara
wondered if the district had sought out all possible grants.
Mr. Jeans said all available departmental funds had been
allocated. In July, the district requested an advance
payment on current year funds to help pay fuel costs.
Representative Gara reiterated that the amount being
requested was reasonable.
5:44:27 PM
Representative Salmon reported that contingency language
could be added to the amendment. He said that the district
had four choices; move to a larger school district, obtain a
bridge loan, hope for federal stimulus dollars, or acquire
the grant money stipulated in the amendment.
Co-Chair Stoltze MAINTAINED his objection.
A roll call vote was taken on the motion.
IN FAVOR: Gara, Salmon, Crawford
OPPOSED: Fairclough, Foster, Joule, Kelly, Thomas,
Austerman, Hawker, Stoltze
The MOTION FAILED (3-8).
AT-EASE: 5:46:11 PM
RECONVENED: 5:51:24 PM
Representative Fairclough MOVED to adopt Amendment 4:
Page 53, after line 115
Insert:
"It is the intent of the legislature that the
Department of Transportation and Public Facilities
install a new drainage culvert at MP 14.4 of the Glenn
Highway, if feasible and within the project scope,
budget and schedule, prior to paving this section of
the highway."
Explanation: This amendment allows construction and
installation of a culvert to alleviate long standing
drainage and flooding issues along the Glenn Highway
and in the Eagle Glen Subdivision.
Co-Chair Stoltze OBJECTED for discussion.
Representative Fairclough explained that the Glen Highway
project was to be funded with stimulus dollars and could be
found on Page 53, Line 14 of the bill. She continued that
the Anchorage Legislature Priority Book listed the project
in Chapter 8, Page 14. She stated that a major highway
corridor was opening in her district which would require the
installation of a culvert under the roadway. She requested
that it be added to the existing language that the
Department of Transportation (DOT) position the culvert in
such a way as to fix a drainage problem in her district. The
project would require no new funds, but was time sensitive.
5:53:07 PM
Representative Gara asked about the cost of the culvert
project. Representative Fairclough replied that the roadbed
would already be under construction and that money would be
saved by joining the two projects.
Representative Gara thought that if minor adjustments could
be made to the bill to help Representative Fairclaough's
district, the same consideration should have been extended
to help the Tanana School District.
5:53:55 PM
Co-Chair Stoltze asked for the representative from DOT to
speak for the department.
FRANK RICHARDS, DEPUTY COMMISSIONER, HIGHWAYS & PUBLIC
FACILITIES, DEPARTMENT OF TRANSPORTATION AND PUBLIC
FACILITIES, explained how the culvert project was advancing.
He agreed to look at the drainage issue and move the project
forward within the timeframe. Representative Fairclough
added that the funding was non-existent for similar projects
throughout the state, and that this was an opportunity for
DOT to help the district in the time available. She said
that if DOT cannot fix the drainage issue, while working in
the initial project timeframe, the district would seek
funding for the project at another time.
Representative Foster asked why DOT had not initially taken
the initiative to fix the problem as part of the project.
Mr. Richards explained that the original design of the
project was to address the rutting problems along the Glen
Highway, and was not intended address drainage issues.
Furthermore, the expeditious nature of the stimulus funds
resulted in a project put out quickly to capture the funds,
and put Alaskans to work. Representative Foster maintained
amazement that the issue of a single culvert was being
presented to the committee.
5:56:39 PM
Representative Fairclough explained that DOT was not aware
of the requested fix until the session was underway. The
project has been the number one priority for her delegation
for three years. The Municipality of Anchorage in
conjunction with DOT has been working on a plan to address
the drainage issue. She stated that a plan had not been
drafted until February 2009, and that DOT had just been
notified of the request.
Co-Chair Stoltze added that it was an area wide project. The
intent was to finish the project within the parameters of
the appropriation. Representative Fairclough relayed that
regardless of federal stimulus dollars, her community has
recognized the need for the drainage problem to be
addressed.
Co-Chair Stoltze wondered if there was talk of litigation
with DOT. Representative Fairclough reported that there are
two flooding issues in her community. In urban Alaska, as
development moves forward, drainage patters change and
additional housing causes less ground surface availability
for water to absorb. As the community has become more urban
the problem has increased. Some homeowners have threatened
to take drainage issues to the court. The drainage issue has
troubled the community for the last 22 years. When the Glen
Highway project was announced it seemed reasonable to
request that the drainage problems be addressed.
6:00:34 PM
Vice-Chair Thomas spoke of a personal experience with
flooding due to construction. He wondered if a study would
be required by DOT to see if the culvert would affect other
communities. Representative Fairclough said it would require
permits, and may not be possible inside of the Glen Highway
Project. Representative Fairclough commented that it was a
rainwater drainage issue and did not involve a body of
water.
Co-Chair Stoltze WITHDREW his objection.
Representative Salmon OBJECTED.
Representative Gara understood that the appropriation was
for $25 million to resurface miles 12 to 27 on the Glen
Highway. He wondered if funding the culvert project would
interfere with the resurfacing funding. Mr. Richards replied
that the initial project was for resurfacing, to take care
of rutting challenges along the highway. Efforts over the
next few weeks, as the project is put out to bid, will be to
examine what permitting issues would need to be overcome in
order to put the culvert request into the original project.
Representative Gara cautioned that by including the culvert
project in the bill, the general funds allocated for the
resurfacing project could be exhausted before the project is
completed. He warned that the amendment could be seen as a
year in advance general fund appropriation request. Co-Chair
Stoltze echoed the concern. He clarified that the amendment
was meant to provide guidance should the opportunity to
install the culvert present itself.
Representative Fairclough restated the intent of the
amendment. She added that if the details of the project
cannot be worked out quickly, the project would be off of
the table. Co-Chair Stoltze noted that the original project
in the bill is a state highway resurfacing project.
Representative Gara felt that the intent language read that
the culvert was the priority. He requested that the
amendment be rewritten to reflect the stated intent, which
is that the resurfacing be completed before the culvert is
put in.
AT-EASE: 6:06:14 PM
RECONVENED: 6:07:27 PM
Representative Foster thanked Mr. Richards for his work over
the years.
Mr. Armstrong thought he had a technical amendment to the
amendment. He suggested:
After "Highway" on Line 2
Insert:
"if feasible and within the project's scope,
schedule, and budget,"
6:08:18 PM
There being NO OBJECTION, the technical amendment to
Amendment 4 was adopted.
Representative Salmon MAINTAINED his objection to Amendment
4.
A roll call vote was taken on the motion.
IN FAVOR: Fairclough, Foster, Gara, Joule, Kelly, Thomas,
Crawford, Hawker, Stoltze
OPPOSED: Salmon
Representative Austerman was absent from the vote.
The MOTION PASSED (9-1).
AT-EASE: 6:10:37 PM
RECONVENED: 6:20:02 PM
Representative Gara requested information concerning the
ramifications of the provision on page 83, Lines 22 through
24. He understood that the provision would allow $2 million
to be taken out of the Constitutional Budget Reserve (CBR),
and put it into the general fund, whether or not it was
needed to balance the budget.
DAVID TEAL, DIRECTOR, LEGISLATIVE FINANCE DIVISION,
explained that 17 (b), Article 9, of the Alaska State
Constitution states that if the amount available for an
appropriation in FY 2010 was less than the amount
appropriated in FY 2009, a majority vote can be taken to
draw from the CBR for up to the 2009 appropriation. The
level of general fund spending in 2009 was $7.1 billion,
which included savings and deposits to public education
funds. This set the first limit at $7.1 billion, which would
be reduced by the amount available for appropriation, and
would include the unrestricted general fund revenue stream
of $3.5 billion. Reserves available for appropriation could
then be added. The accounts from which the reserves would be
drawn, which total $1 billion, include; the Statutory Budget
Reserve Account, the Alaska Housing Savings Account, the
Rail Belt Energy Fund, and the Power Cost Equalization
Endowment. Subsequently, the earnings reserve account from
the Permanent Fund is considered available for
appropriation. That balance is $1 billion. The $3.5 billion
in revenue when combined with the $2 billion in reserves
would make $5.5 billion available for appropriation. The
reserve amount available for 2010 could not be predicted,
but constitution stipulated that there is an amount that can
be withdrawn. Mr. Teal said that it could take 6 months
after the close of the fiscal year to determine what the
amount would be. He believed that the amount would not
exceed $ 2 million, and could be zero. He stressed that the
factors involved were numerous which made the calculation a
challenge.
6:27:14 PM
Representative Gara understood that the funds would be taken
out of the CBR and put in the general fund, whether there
was a budget shortfall or not. Mr. Teal said that was
correct. He added that it would depend on the amount
available, not on the amount appropriated. The calculation
would not be not determined on how much was spent, but by
factors which have yet to be determined.
6:29:14 PM
Representative Gara interpreted that the provision would
allow the taking of $1.6 to $2 billion dollars out of the
CBR, regardless of a deficit. Mr. Teal replied in the
affirmative. Representative Gara summarized that the money
would not be spent on education or revenue sharing, but
would be taken out of the CBR and put in the general fund.
Mr. Teal said that was correct.
Representative Gara moved on to possible litigation issues.
It was unknown if funds appropriated or available for
appropriation would be drawn from general funds, federal
funds, other funds, or a combination. Mr. Teal agreed.
Representative Gara pointed out that the issue had not been
litigated before, and that no precedent had been set. Mr.
Teal shared that 17 (b), has never been applied.
Representative Gara asked if the administration supported
the provision.
6:30:44 PM
KAREN REHFELD, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, responded that the administration
has been looking closely at the issue. She could not say if
the governor supported the language.
Representative Gara asked if Ms. Rehfeld agreed with Mr.
Teal about the difficulty in interpreting the language and
the possible litigation issues. Ms. Rehfeld replied in the
affirmative. Representative Gara asked would the
administration support taking out constitutional savings
funds even if it were not necessary to balance the budget.
Ms. Rehfeld replied that the goal was to have a balanced
budget and that the CBR would not be used if it was
unnecessary.
6:32:28 PM
Co-Chair Hawker said the provision was an insurance policy
should the economy falter. The parameters for the amount
appropriated and the amount available to appropriate are
wide. The width would increase should the economy take a
downturn. He felt that the task of calculating the amount
available was possible.
Representative Gara understood the provision had been an
insurance policy to carry the state through the summer of
2009 because of the dramatic drop in oil prices. He voiced
concern that the vote today would take the $2 billion out in
June of 2010.
6:34:21 PM
Mr. Teal responded that it was unknown when money would be
withdrawn from the CBR. If there is a deficit, the money
would be withdrawn to fill the deficit. He agreed with Co-
Chair Hawker that it was an insurance policy. Should the
price of oil fall, and the amount available for expenditure
decline, 17 (b) would fill that deficit.
Representative Gara reasoned that the amount available for
appropriation for the fiscal year should be determined
before the calculation could be made. Mr. Teal explained
that under 17 (b), the state is allowed to pull money out if
there was a deficit. If oil prices are too low to support
the budget that has been created, the appropriated money
would come from CBR before June 30.
6:36:58 PM
Representative Gara quoted from the bill "if the amount
available for appropriation for a fiscal year". He argued
that "fiscal year" applied to 2010, and stressed that the
revenue for that year would not be calculated until June 1,
2010. He wondered how the insurance policy amount could be
calculated before the appropriated amount was determined.
Mr. Teal felt that was a valid argument.
Co-Chair Stoltze asked Ms. Rehfeld if she felt that the
provision was necessary. Ms. Rehfeld thought it was a good
idea.
Representative Gara maintained that the language in the bill
gave authority to take money out of the CBR even if there
was a surplus, and thought the provision should be rewritten
to say, "only as much as is needed to balance the budget."
Co-Chair Stoltze said that it was a provision out of the
constitution and a rewrite would change the intent of the
voters.
Mr. Teal said the amount appropriated for FY 2010 was
irrelevant to the calculation. The language in the
constitution states "the amount available for
appropriation.", so the same amount would be drawn whether
there was a surplus or a deficit.
6:39:43 PM
Representative Gara pointed out that the constitution
states, "an appropriation may be made, and it may not
exceed", he interpreted that the amount needed to balance
the budget could be appropriated, not the full $2 billion.
Mr. Teal replied that the legislature has the power to
determine the size of appropriations. Representative Gara
recommended that the language in the bill should limit an
appropriation from the CBR to the amount needed to balance
the budget.
6:40:30 PM
Representative Kelly observed that the budget year had been
challenging. He noted that the committee has encouraged
budget discipline, minimal general fund usage, and the
maximum usage of formula and federal funds. He voiced
concern for federal funds being left unused and the lack of
receipt authority for bonding. He spoke specifically of the
Dalton Highway Project. He did not understand why the
federal funds for that project had not been taken advantage
of, particularly at a time when in-state jobs were few. He
intended to support the budget, but stressed deep concern
about the Dalton Highway funds.
6:44:08 PM
Representative Kelly spoke of the University of Alaska
request for $15.3 million for receipt authority. He was
disturbed that the item had been denied. He expressed
frustration that the Life and Health Sciences Center, which
has perpetually been the number 1 request from the Board of
Regents, has been consistently omitted. He reiterated that
he would support the bill despite his frustration.
6:46:34 PM
Representative Gara wondered what would be done with the
$26.3 million in federal funds that was left on the table,
and how much of a state match would be required to leverage
the funds. He asked for clarification on the university
receipts issue highlighted by Representative Kelly.
Representative Kelly said that strictly federal funds were
the issue concerning the Dalton Highway project, and
reiterated the University bonding request for $15.3 million
for the first phase of the energy center.
Representative Gara questioned the funding for the Dalton
Highway project. He wondered if the $26.3 million was laying
in wait, or if it had been used elsewhere in the budget, and
would a state match be required.
6:48:43 PM
Mr. Armstrong informed the committee that $22.7 million in
FY 2009 STIP funds did not make it into the governor's
request.
Mr. Richards added that the project had originally been on
the request for the economic stimulus package, which was 100
percent federal receipt authority. The request now was to
have the project funded under the FY 2010 budget, which
would receive legislative authority to proceed with the
project, and a match requirement of 91 to 9 percent split.
Representative Gara asked if there was a way to fund the
project without displacing another. Mr. Richards said if the
project were to be funded by stimulus dollars, another
project would be displaced. Representative Gara asked if
federal money would be left on the table if the project was
not executed. Mr. Richards said that the 2010 STIP was in
development and would include new projects that had been
nominated and national highway system projects, like the
Dalton Highway. He reminded that committee of efforts to
fund the project in the past.
6:51:09 PM
Representative Gara clarified that federal dollars were not
being left unspent, but they were being spent on other
projects. Co-Chair Stoltze added that the funds were used to
fund other STIP priorities. Mr. Richards said that the
department woild use the federal highway receipts that it
receives on projects that the legislature has given
authority to spend them on.
Representative Kelly asked if the department was seeking
receipt authority for funds. He assumed that the department
would take advantage of the federal funds to fund the Dalton
project, if given authority by the legislature. Mr. Richards
replied that that was correct.
6:52:44 PM
Co-Chair Hawker commented on the amount of aggregate federal
receipt authority appropriated to the department in the
past. He asked how much of that receipt authority does the
department have; how much cash is available, and how much
authority does the department have to spend that cash. Mr.
Richards guessed that the monetary number was large.
Representative Gara concluded that there were varying
opinions about how the money would be allocated. He said he
supported an expansion of the Anchorage Port, but wanted
accountability for money spent. He thought during a tight
budget year, more money should be spent on education, and
not $10 million on the port. He maintained his concern that
the budget allows for $2 million of the CBR account to be
spent, even if it is not needed. He felt that the public
would not want money out of the CBR spent unnecessarily. He
praised the committee for being prudent during the process.
He though that some of the funds could be spent on more
important issues such as, education, homelessness, and crime
prevention.
6:57:13 PM
Vice-Chair Thomas spoke to Representative Gara's sentiments.
He said that capital money does a great deal for his
district. He expressed satisfaction with the budget.
Representative Foster recalled his early years in the
legislature, and the smaller budgets of the 1990's. He
opined that no matter how much money was available it would
still not be enough to satisfy everyone. He thought that the
process of creating the budget was an opportunity for
Alaskans to appreciative. He pointed out that the budget
amount always rises and has tripled in size within the last
five years.
6:58:59 PM
Representative Gara agreed with Vice-Chair Thomas and
Representative Foster. He mentioned his support for rural
projects and his belief that rural projects created
opportunity.
Co-Chair Hawker MOVED to report HCS CSSB 75 (FIN) from
Committee. There being NO OBJECTION, it was so ordered.
HCS CSSB 75 (FIN) was REPORTED out of Committee with a "do
pass" recommendation.
Co-Chair Hawker MOVED to authorize legal to make technical
and conforming changes during the drafting process. There
being NO OBJECTION, it was so ordered.
AT-EASE: 7:02:54 PM
RECONVENED: 7:04:44 PM
7:04:49 PM
SENATE BILL NO. 165
"An Act authorizing the transfer of two parcels of land
from the Alaska Railroad Corporation to the
Municipality of Anchorage; and providing for an
effective date."
7:05:08 PM
REPRESENTATIVE NANCY DAHLSTROM, SPONSOR, stated that the
land swap would benefit Government Hill Elementary School by
fixing a 22 year-old safety issue. The land would allow for
a safer entrance to the school. She relayed that the
railroad and the community were in full agreement regarding
the issue.
7:06:14 PM
JESSE CROSS-CALL, STAFF, SENATOR JOHNNY ELLIS, stated that
Page 1, Line 6, described the land that would be transferred
to the Municipality of Anchorage. The first parcel of land
was 1.93 acres, and is railroad land that will be developed
into residential sub-divisions. The second parcel of land
was less than 1/5th of an acre. This was the parcel that
would enable the fix of the dangerous elementary school
entrance.
7:08:34 PM
Page 2, Line 6 of the bill described the purpose of the
transfer; for the development on East Government Hill, and
the safer school entrance on West Government Hill. In
exchange for the two plots of land the municipality would
relinquish a small parcel of land to the railroad for a
parking lot. There is a $40,000 discrepancy in the land
being exchanged between the municipality and the railroad,
which the municipality believes will not be a future
concern.
7:10:16 PM
Co-Chair Stoltze opened public testimony.
RON POLLOCK, ANCHORAGE COMMUNITY DEVELOPMENT AUTHORITY
testified via teleconference. He urged support for the bill
and offered to answer questions.
PAT GAMBLE, PRESIDENT, CEO, ALASKA RAILROAD CORPORATION
testified via teleconference. He testified that the project
would be beneficial for the city and he gave his strong
support for the bill.
7:11:55 PM
Co-Chair Stoltze implored Mr. Gamble to respond to economic
development issues concerning the Mat-Su area, and to be
careful of the comments that he made in public forums. Mr.
Gamble replied that he understood the message.
Co-Chair Stoltze closed public testimony.
7:13:13 PM
Representative Fairclough wondered about the connection on
the land route coming off the bridge at Point Mackenzie. She
asked if any of the properties under discussion were located
in the area. Representative Dahlstrom replied no.
7:13:50 PM
Co-Chair Stoltze pointed out the zero fiscal note.
Representative Foster MOVED to report SB 165 out of
committee with individual recommendations and the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
SB 165 was REPORTED out of Committee with a "do pass"
recommendation and with zero fiscal note #1 by the
Department of Commerce, Community and Economic Development.
7:15:00 PM
CS FOR SENATE BILL NO. 177(FIN)
"An Act relating to an exception for professional
fishing guide services in the Kenai River Special
Management Area; relating to the licensing and
regulation of sport fishing operators and sport fishing
guides and licensing and registration of sport fishing
vessels; and providing for an effective date."
7:15:07 PM
SENATOR KEVIN MEYER, SPONSOR, stated that the bill would
continue the licensing and regulation of sport fishing
operators and guides through the next five years. He said
that in order to protect the guides and the clients, minimum
standards were needed. The program began in 2004, and
provided information pertaining to the number of guides in
the field, what kind of fish were being caught, and what
kind of activity was occurring in the guided industry. It
also provided basic standards for guides in the areas of
cardiopulmonary resuscitation (CPR), first aid, and
liability insurance. He shared that the program has
increased the level of professionalism, which has helped to
raise the standards in the industry throughout the state.
The bill was modified to include a waiver for in-season
replacement of guides on the Kenai River. This would allow
the quick replacement of a guide should one be lost mid-
season. The replacement guide would be required to meet the
minimum requirements of licensing, first aid, and drug
testing.
7:16:25 PM
Senator Meyer relayed that the replacement would be required
to attend the Kenai River Guide Academy should they wish to
continue guiding the following season. He felt that the
program has benefited the sport fishing industry throughout
the state.
Representative Foster asked if there were any extenuating
subsistence issues. Senator Meyer replied no.
Co-Chair Stoltze asked Senator Meyer if he supported the
legislation encompassed in the proposed CS. Senator Meyer
responded that the change in the CS would change the
effective date of the bill.
Co-Chair Hawker MOVED to adopt the CSSB 177 (FIN), Version
26LS0832\ S.
There being NO OBJECTION, it was so ordered.
ANDY SZCZESNY, OWNER, ALASKA FISH AND FLOAT, KENAI,
testified in support of the bill.
7:20:07 PM
MONTE ROBERTS, KENAI RIVER PROFESSIONAL GUIDE ASSOCIATION,
SOLDOTNA, testified via teleconference. He testified in
support of the bill. He believed that the CS would keep
members of the industry, in emergency situations, from going
out of business.
7:21:34 PM
ROBER L. JAYNES, SELF, VALDEZ, testified via teleconference.
He testified that he had some problems with the bill in its
current form. He expressed concern for untrained guides
operating on the Kenai, at any time. He shared that he was
not opposed to the licensing per se, but felt that fee
involved was too high. He stated that the data collection
system posed problems. He related that his licensing fees
pay for the data collection, but that the data currently
collected was from charter operators only.
7:24:58 PM
Representative Foster questioned the fiscal note. He
wondered what the cost would be to the state.
Co-Chair Stoltze closed public testimony.
7:25:54 PM
CHARLES SWANTON, DIRECTOR, DIVISION OF SPORT FISH,
DEPARTMENT OF FISH AND GAME, replied that the division of
funds was 50/50, between the fees collected from the guides
and the operators, versus licensed anglers. He clarified
that $256,000 was collected by the fee program, and
$200,000 was from fishing licenses.
Vice-Chair Thomas commented that there was a surplus of $3
million put into the Fish and Game budget and could that be
considered a contribution toward the sport fish management.
Co-Chair Hawker stated that the only change in the new CS
from the previous version and the version to which the
fiscal note was written was that the time period until the
statutes would be repealed has been shortened, from January
1, 2015 until January 1, 2011. He wondered if that would
necessitate a new fiscal note.
7:27:30 PM
Mr. Swanton replied that a new fiscal note would not be
needed.
7:28:37 PM
Co-Chair Hawker exhibited surprise and requested
clarification.
JENNIFER YUHAS, LEGISLATIVE LIAISON, DEPARTMENT OF FISH AND
GAME, offered to provide a new fiscal note, showing no
subsidy for the following years, should the Committee adopt
the new CS.
7:29:05 PM
Representative Foster MOVED to report CSSB 177 (FIN) out of
Committee with individual recommendations and with a new
fiscal note.
HCS CSSB 177 (FIN) was REPORTED out of Committee with a "do
pass" recommendation and with a new fiscal note by the
Department of Fish and Game.
7:30:32 PM
RECESSED: 7:31:18 PM
RECONVENED: 9:02 PM
ADJOURNMENT
The meeting was adjourned at 9:02 PM.
| Document Name | Date/Time | Subjects |
|---|