Legislature(2001 - 2002)

03/22/2001 01:41 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                  HOUSE FINANCE COMMITTEE                                                                                       
                      March 22, 2001                                                                                            
                          1:41 PM                                                                                               
TAPE HFC 01 - 58, Side A                                                                                                        
TAPE HFC 01 - 58, Side B                                                                                                        
TAPE HFC 01 - 59, Side A                                                                                                        
CALL TO ORDER                                                                                                                 
Co-Chair Williams called the House Finance Committee meeting                                                                    
to order at 1:41 PM.                                                                                                            
MEMBERS PRESENT                                                                                                               
Representative Eldon Mulder, Co-Chair                                                                                           
Representative Bill Williams, Co-Chair                                                                                          
Representative Con Bunde, Vice-Chair                                                                                            
Representative Eric Croft                                                                                                       
Representative John Davies                                                                                                      
Representative Carl Moses                                                                                                       
Representative Richard Foster                                                                                                   
Representative John Harris                                                                                                      
Representative Bill Hudson                                                                                                      
Representative Ken Lancaster                                                                                                    
MEMBERS ABSENT                                                                                                                
Representative Jim Whitaker                                                                                                     
ALSO PRESENT                                                                                                                  
Jeff Bush, Deputy Commissioner, Department of Community and                                                                     
Economic Development; Tom  Lawson, Director, Administrative                                                                     
Services, Department of Community and Economic Development;                                                                     
Greg  Wolf,   Director,  International  Trade  and   Market                                                                     
Development;   Kevin   Brooks,   Director,   Division    of                                                                     
Administrative Services, Department of  Fish and Game;  Bob                                                                     
Poe,  Alaska Industrial  Development and  Export  Authority                                                                     
(AIDEA); Mike Nizich, Administrative Director, Office of the                                                                    
Governor; Karen  Rehfeld, Director,  Division of  Education                                                                     
Support  Services,  Department   of  Education  and   Early                                                                     
Development;  George  Smith,  Deputy  Director,  Libraries,                                                                     
Archives  &  Museums,  Department  of  Education  &   Early                                                                     
PRESENT VIA TELECONFERENCE                                                                                                    
Hal Spackman, Director, Mt. Edgecumbe, Sitka; Fred Esposito,                                                                    
Director, Alaska Vocational Technical Center, Seward; Yvonne                                                                    
Chase, Deputy Commissioner, Early Education,  Department of                                                                     
Education and Early Development                                                                                                 
GENERAL SUBJECT(S):                                                                                                           
 HB  47-APPROP: GOVERNOR'S CAPITAL BUDGET                                                                                       
        Community and Economic Development                                                                                      
        Fish and Game                                                                                                           
        Education and Early Development                                                                                         
The following overview was taken in log note format.  Tapes                                                                     
and handouts will be on file with the House Finance                                                                             
Committee through the 22nd Legislative Session, contact 465-                                                                    
2156. After the 22nd Legislative Session they will be                                                                           
available through the Legislative Library at 465-3808.                                                                          
 LOG SPEAKER                DISCUSSION                                                                                      
      TAPE HFC 00 - 58                                                                                                        
      SIDE A                                                                                                                  
 000                        DEPARTMENT OF COMMUNITY AND ECONOMIC                                                                
 124 BOB POE, ALASKA        Noted that the department has reduced its                                                           
      INDUSTRIAL            first request for $7.8 million dollars                                                              
      DEVELOPMENT AND       for Power Cost Equalization. He observed                                                            
      EXPORT AUTHORITY      that the amendment request is for $6,854                                                            
      (AIDEA)               million dollars.                                                                                  
 221 Mr. Poe                He noted that higher fuel costs resulted                                                            
                            in a supplemental request in FY01 of $1.5                                                           
                            million dollars. The FY02 request is                                                                
                            reduced by $1 million dollars.                                                                    
 351 CO-CHAIR MULDER        Questioned if the statutory PCE formula                                                             
                            spoke to fuel costs and questioned how a                                                            
                            supplemental on fuel cost was calculated.                                                         
 402 Mr. Poe                He acknowledged that the Regulatory                                                                 
                            Commission of Alaska sets the rate for                                                              
                            PCE. Reviewed the fuel cost calculations.                                                           
                            He explained that the formula anticipates                                                           
                            a total cost of $15.7 million dollars                                                               
                            each year. The cost was higher than $15.7                                                           
                            million dollars this year. There is a                                                               
                            variance on the real cost.                                                                        
 456 Co-Chair Mulder        Questioned the need for a supplemental                                                              
                            and pointed out that other areas of the                                                             
                            state also experienced rising fuel costs.                                                         
 535 Mr. Poe                Noted that other areas of the state are                                                             
                            able to adjust their rates and pass the                                                             
                            cost on to the consumer.                                                                          
 573 Co-Chair Mulder        Questioned the difference between AIDEA                                                             
                            receipts and dividends.                                                                           
 628 Mr. Poe                Explained that $620 thousand dollars                                                                
                            would be used to purchase Rural                                                                     
                            Development Initiative Fund loans that                                                              
                            would be added to the portfolio. It is an                                                           
                            exchange of liquid assets for long-term                                                             
660 Representative         Asked for more information.                                                                        
761 Mr. Poe                Observed that the stock market decline                                                               
                           has affected the endowment. He noted that                                                            
                           AIDEA has been working hard on the sale                                                              
                           of the Four Dam Pool.                                                                              
827 Representative John Pointed out that the Legislature                                                                        
      Davies               understood that PCE was not fully                                                                    
878 JEFF BUSH, DEPUTY      Reviewed the request for Operation Renew                                                             
    COMMISSIONER,        Hope. The state is pursuing federal                                                                    
      DEPARTMENT OF        funding.                                                                                           
      COMMUNITY AND                                                                                                             
      ECONOMIC DEVELOPMENT                                                                                                      
921 Mr. Bush               Reviewed the Community Block Grants                                                                  
                           request. He pointed out that the request                                                             
                           is federal pass through funding.                                                                   
976 Mr. Bush               Discussed the Federal Community                                                                      
                           Development Grants component. The                                                                    
                           original request was for a $150 million                                                              
                           dollar state match. Additional receipts                                                              
                           from the Denali Commission are expected.                                                             
                           Therefore the request has increased to                                                               
                           $300 thousand dollars in state match and                                                             
                           $6.35 million in federal funds.                                                                    
1098 Mr. Bush              Discussed the USDA mini grant program.                                                             
1124 Mr. Bush              Noted that the Denali Commission has                                                                 
                           approved $4.5 million dollars and the                                                                
                           state expects an additional $500 thousand                                                            
                           dollars this year. A small state match is                                                            
1171 Mr. Bush              Reviewed the Trans-Alaska Pipeline                                                                   
                           Liability (TAPL) Fund request.                                                                     
1243 Mr. Poe               Noted that the state is asking for an                                                                
                           additional $3.5 million in federal                                                                   
                           receipts and $1.6 in Oil and Hazardous                                                               
                           Substance Prevention and Release Fund.                                                               
                           The state is arguing that the TAPL                                                                   
                           represent part of the state's match.                                                               
1445 Mr. Poe               Discussed Rural Systems Upgrades. The                                                                
                           department is asking for a $500 thousand                                                             
                           dollar general fund match to match a $10                                                             
                           million federal dollar rural power system                                                            
                           upgrade. He stressed that the cost of                                                                
                           generation can make a great impact.                                                                
1536 Mr. Poe               Reviewed the Alternative Energy Program.                                                             
                           He noted that the request would look at                                                              
                           ways of producing ethanol. He discussed                                                              
                           page 31 of the department's request (see                                                             
                           capital amendment backup). He pointed out                                                            
                           that the bulk of the funding is federal.                                                           
1623 Mr. Poe               Discussed the Electrical Emergencies                                                               
                            request. He stressed that the request                                                               
                            assists the Alaska Energy Authority with                                                            
                            emergency repairs.                                                                                
 1674 Representative        Emphasized the need for a statewide                                                                 
      Hudson                alternative energy plan. He pointed out                                                             
                            that it has been a long time since the                                                              
                            470 Funds were reviewed. He questioned if                                                           
                            5 cents a barrel is still being                                                                     
 1768 Mr. Poe               AIDEA produced an alternative energy plan                                                           
                            last year. The Railbelt indicated that                                                              
                            rural energy should be the focus. AIDEA                                                             
                            found that some ideas make sense if well                                                            
                            targeted, but most do not make economic                                                             
                            sense due to the economics of size. The                                                             
                            best place to reduce costs is in fuel and                                                           
                            waste heat efficiencies and                                                                         
                            weatherization. Small hydro projects can                                                            
                          be utilized.                                                                                        
 1895 Representative        Referred to the wood fire boilers in                                                                
      Foster                rural areas.                                                                                      
 1929 Mr. Poe               Noted that the wood fire boiler must be                                                             
                            efficient to cut down on the costs. They                                                            
                            only work in very targeted areas.                                                                 
 1968 Representative John Noted that an Energy Task Force has been                                                              
      Davies                proposed and spoke in favor of interim                                                              
 1987 Mr. Bush              Discussed the Alaska Russian Far East                                                               
                            Projects Phase 2. He noted that Sakhalin                                                            
                            Development Agency would be implemented                                                             
                            with an AIDEA model. The Legislative                                                                
                            Budget and Audit Committee previously                                                               
                            approved funding. This would be the last                                                            
 2076 Representative        Stressed that Alaskan areas have needs.                                                           
 2093 Mr. Bush              Emphasized that the projects are                                                                    
                            federally funded and that Alaskan                                                                   
                            businesses can benefit from development.                                                          
 2123 Representative Croft Pointed out that the funding would help                                                              
                            develop oil and gas in the Arctic that                                                              
                            would compete with Alaska.                                                                        
 2161 Mr. Bush              Responded that the development would take                                                           
                            place without Alaskan participation. He                                                             
                            emphasized that the question is whether                                                             
                            or not Alaska can capitalize on the                                                                 
                            benefits of the development.                                                                      
 2202 Representative        Questioned if state employees would go to                                                           
      Hudson                Sakhalin to assist development.                                                                   
 2228 GREG WOLF, DIRECTOR, Testified via teleconference that the                                                                
      INTERNATIONAL TRADE funding is a pass through that to private                                                             
      AND MARKET            development.                                                                                      
2285 Mr. Bush              There would be some involvement of state                                                             
2325 Mr. Bush              Reviewed the Kodiak Launch Complex                                                                   
                           Facilities request.                                                                                
2350 Mr. Bush              Discussed the Arctic Winter Games Team                                                               
                           Alaska. The games would be held in                                                                   
                           Greenland. The funding would help with                                                               
                           operation costs and travel.                                                                        
      TAPE HFC 01 - 58,                                                                                                       
      Side B                                                                                                                  
                           DEPARTMENT OF FISH AND GAME                                                                        
37    KEVIN BROOKS,        He noted that the department's request                                                               
      DIRECTOR, DIVISION   contains $13.2 million dollars in federal                                                            
      OF ADMINISTRATIVE    funds.                                                                                             
      SERVICES, DEPARTMENT                                                                                                      
      OF FISH AND GAME                                                                                                          
142 Mr. Brooks             Discussed the statewide Facilities                                                                   
                           Repair, Maintenance, and Replacement                                                                 
215 Mr. Brooks             Reviewed the Vessel and Aircraft Repair,                                                             
                           Maintenance and Replacement request. He                                                              
                           pointed out that the request deals with                                                              
                           health and safety issues. The R/V                                                                    
                           Sundance failed to meet accepted safety                                                              
                           standards and needs to be replaced. The                                                              
                           department estimates $250 to $300                                                                    
                           thousand dollars for its sale. The vessel                                                            
                           is located in Southeast Alaska.                                                                    
431 Vice-Chair Bunde       Clarified that aircrafts would be                                                                    
                           repaired not replaced.                                                                             
487 Mr. Brooks             The state spends $2.5 million dollars in                                                             
                           charter flights.                                                                                   
504 Mr. Brooks             Discussed the Dock Repairs, Maintenance                                                              
                           and Replacement Phase 2 request. The                                                                 
                           request would help finish the King Salmon                                                            
                           facility and begin work in Cordova. The                                                              
                           King Salmon facility is state-owned and                                                              
                           used by the state.                                                                                 
607 Mr. Brooks             Reviewed the Black River Sonar - Chignik                                                             
                           area, Upper Aleutian Peninsula request.                                                              
                           The focus is on a sonar system.                                                                    
661 Mr. Brooks             Discussed the Sport Fishing and                                                                      
                           Recreational Boating Public Access and                                                               
                           Facility Development. He noted that the                                                              
                           Federal Aid to Sport Fish Restoration Act                                                            
                           requires that 15 percent of federal funds                                                            
                           be available for public access. Federal                                                              
                           funds are matched 25% state and 75                                                                   
                           percent federal funds.                                                                             
733 Mr. Brooks             Discussed the Norton Sound Salmon                                                                    
                           Research Initiative. He noted that it is                                                           
                            a 5-year program to spend $1 million                                                                
                            dollars a year to determine issues around                                                           
                            the fisheries collapse.                                                                           
 864 Mr. Brooks             Responded to questions by Vice-Chair                                                                
                            Bunde regarding fair access.                                                                      
 882 Mr. Brooks             Noted that Norton Sound projects would                                                              
                            occur in fresh water.                                                                             
 918 Co-Chair Williams      Suggested that the department expand to                                                             
                            ocean survival.                                                                                   
 943 Mr. Brooks             Agreed that ocean survival is a data gap.                                                         
 977 Mr. Brooks             Reviewed the Near Shore Fisheries                                                                   
                            Research and Assessment request for                                                                 
                            federal authorization. He observed that                                                             
                            the state receives $1.798 million in                                                                
                            federal dollars to help develop new                                                                 
 1030 Mr. Brooks            Discussed the Snow Crab Fishery Disaster                                                            
                            Research request. There have been steep                                                             
                            declines in the Crab fisheries. The                                                                 
                            request would bring $1 million dollars in                                                           
                            federal funds.                                                                                    
 1103 Mr. Brooks            Discussed the Log Transfer Facility                                                                 
                            Research and Remediation request.                                                                 
 1146 Mr. Brooks            In response to a question by                                                                        
                            Representative Lancaster, he noted that                                                             
                            the work would be done through                                                                      
 1262 Co-Chair Williams     Asked about the log transfer facility                                                               
 1278 Mr. Brooks            Replied that would be the Department of                                                             
                            Fish and Game.                                                                                    
 1302 Representative Croft  Emphasized the need to study ways to                                                                
                            minimize the effect on the fisheries.  He                                                           
                            recommended what the best way would be to                                                           
                            fix it.                                                                                           
 1339 Mr. Brooks            Addressed the wildlife habitat management                                                           
                            in Interior Alaska request in the amount                                                            
                            of $100 thousand dollars.                                                                         
 1372 Mr. Brooks            Discussed the equipment replacement for                                                             
                            wildlife conservation programs request in                                                           
                            the amount of $100 thousand dollars.                                                              
 1401 Representative        Asked the typical life of one of the                                                                
      Foster                machines.                                                                                         
 1412 Mr. Brooks            Replied that they would have a life                                                                 
                            expectancy of the other State equipment                                                             
                            fleet.  He added that they are used much                                                            
                            longer than their life expectancy.                                                                
 1487 Representative John Asked if it had been prior authorized.                                                              
 1515 Mr. Brooks            Replied that the indication shows that                                                              
                            the request had come up before.  The one                                                            
                            in 1998 has been used and now needs to be                                                         
1570 Mr. Brooks            Noted that this was a new appropriation.                                                           
1582 Vice-Chair Bunde      Requested more information on the                                                                    
                           statewide waterfall near Petersburg.                                                               
1600 Mr. Brooks            Discussed the Kachemak Bay reserve                                                                   
                           facilities design and construction                                                                   
                           request in the amount of $3.5 million                                                                
                           federal fund dollars.                                                                              
1641 Representative        Asked the number of aircraft currently                                                               
      Foster               available.                                                                                         
1652 Mr. Brooks            Replied there were 10-12 aircraft in the                                                             
                           Department for running surveys and                                                                   
1675 Mr. Brooks            Mentioned another project in cooperation                                                             
                           with the Governor's Office.                                                                        
1734 Mr. Brooks            Spoke to the Pacific Salmon Treaty in                                                                
                           cooperation with the Governor's Office.                                                              
                           The request is in the amount of $18                                                                  
                           million federal receipt dollars.  The                                                                
                           federal fiscal year FY00 appropriations                                                              
                           legislation established a Pacific Coastal                                                            
                           Salmon Recovery Fund and appropriated a                                                              
                           total of $58 million dollars for the                                                                 
                           states of Alaska, Washington, Oregon, and                                                            
                           California as well as the treaty fishing                                                             
                           tribes in the Pacific Northwest.                                                                     
                           Coordination of the fund is through the                                                              
                           respective Governor's Offices.  The                                                                  
                           Alaska portion of the federal                                                                        
                           appropriation was $14 million dollars and                                                            
                           is expected to be $18 million in federal                                                             
1868 Representative        Asked if the treaty required research.                                                             
1881 Mr. Brooks            Stated that it would as it requires great                                                            
1893 Representative        Referenced the bunkhouses and asked why                                                              
      Foster               that was the State's obligation.                                                                   
1919 Mr. Brooks            Replied that there is employee housing                                                               
                           for the seasonal workforce.                                                                        
1933 Vice-Chair Bunde      Asked the ratio of salmon.                                                                         
1966 Mr. Brooks            Replied that it would be an incremental                                                              
2009 Representative John Referenced the fast track supplemental                                                                 
      Davies               and the fishery need.                                                                              
2023 Mr. Brooks            Replied that he would provide that                                                                   
                           information to the Committee.                                                                      
                           OFFICE OF THE GOVERNOR                                                                           
      TAPE HFC 01 - 59,                                                                                                     
      Side A                                                                                                                  
000 MIKE NIZICH,           Discussed the expansion of the AccuVote                                                            
      ADMINISTRATIVE       elections system.                                                                                
      DIRECTOR, OFFICE OF                                                                                                       
      THE GOVERNOR                                                                                                            
 091 Mr. Nizich             Spoke to American with Disabilities Act                                                             
                            compliance projects in the amount of $500                                                           
                            thousand general fund dollars.                                                                    
 155 Representative John Asked if there was a total amount.                                                                   
 180 Mr. Nitich             Stated that there was not.                                                                        
 208 Representative John Pointed out that there was a total listed                                                              
      Davies                on Page 12.                                                                                       
                            DEPARTMENT OF EDUCATION & EARLY                                                                   
 256 KAREN REHFELD,         Discussed the Mt. Edgecumbe High School                                                             
      DIRECTOR, DIVISION    classroom and field house repair and                                                                
      OF EDUCATION SUPPORT renovation in the amount of $150 thousand                                                            
      SERVICES, DEPARTMENT general fund dollars.                                                                              
      OF EDUCATION AND                                                                                                          
      EARLY DEVELOPMENT                                                                                                         
 340 Ms. Rehfeld            Reviewed the request for the Mt.                                                                    
                            Edgecumbe High School Roof Repair &                                                                 
 382 GEORGE SMITH, DEPUTY Discussed the Museum facility upgrade                                                                 
      DIRECTOR, LIBRARIES, request in the amount of $550 thousand                                                               
      ARCHIVES & MUSEUMS, dollars.  The request would upgrade to                                                                
      DEPARTMENT OF         fire suppression and dust collection.                                                             
      EDUCATION & EARLY                                                                                                         
 513 Ms. Rehfeld            Discussed the Head Start Health & Safety                                                            
                            repairs request in the amount of $500                                                               
                            thousand dollars.                                                                                 
 559 Ms. Rehfeld            Understood that these were private                                                                  
 575 Ms. Rehfeld            Reviewed the AVTEC roof repair and                                                                  
                            replacement request in the amount of $650                                                           
                            thousand dollars.                                                                                 
 626 Mr. Smith              Spoke to the design for museum and                                                                  
                            archives building expansion request in                                                              
                            the amount of $500 thousand dollars.  He                                                            
                            addressed the need for additional space                                                             
                            for the Alaska State Museum collection,                                                             
                            which has grown from 5,600 objects in                                                               
                            1967 to over 25,000 objects currently.                                                              
                            It is critical to preserving Alaska's                                                               
                            history and culture.                                                                              
 725 Representative         Asked to have a tour of the storage area.                                                         
 762 Representative         Asked the number of students at Mt.                                                                 
      Foster                Edgecumbe                                                                                         
 780 Ms. Rehfeld            Replied there are about 313 students.                                                             
 833 Co-Chair Williams      ADJOURNMENT                                                                                       
                            The meeting was adjourned at  3:25 p.m.                                                           

Document Name Date/Time Subjects