Legislature(2001 - 2002)
03/28/2001 01:38 PM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE March 28, 2001 1:38 PM TAPE HFC 01 - 65, Side A TAPE HFC 01 - 65, Side B CALL TO ORDER Co-Chair Williams called the House Finance Committee meeting to order at 1:38 PM. MEMBERS PRESENT 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 Eldon Mulder, Co-Chair Representative Jim Whitaker ALSO PRESENT Thomas Brigham, Director, Division of Statewide Planning, Department of Transportation and Public Facilities; Dan Easton, Director, Division of Facility Construction and Operation, Department of Environmental Conservation; Larry Dietrick, Program Manager, Prevention and Emergency Response Program, Department of Environmental Conservation; Steve Hildebrand, Fiscal Analyst, Office of Management and Budget, Office of the Governor; Rob Carpenter, Fiscal Analyst, Legislative Finance Division; Tom Chapple, Director, Division of Air and Water Quality, Department of Environmental Conservation; Nancy Slagle, Director, Division of Administrative Services, Department of Transportation and Public Facilities. PRESENT VIA TELECONFERENCE (listen only) John Tolley, Chief, Planning and Administrative Services, Central Region, Department of Transportation and Public Facilities; Jennifer Wilson, Regional Planning Manager, Central Region, Department of Transportation and Public Facilities; Murphy O'Brien, Assistant to the Regional Director, Central Region, Department of Transportation and Public Facilities; Mort Plumb, Director, Ted Stevens Anchorage International Airport, Central Region, Department of Transportation and Public Facilities; Tom Middendorf, Airport System Planner, Department of Transportation and Public Facilities; Ted Stevens, Anchorage International Airport, Central Region, Department of Transportation and Public Facilities; Jenny Kuentzel, Planner, Ted Stevens Anchorage International Airport, Central Region; Department of Transportation and Public Facilities; Ralph Swarthout, Regional Director, Northern Region, Department of Transportation and Public Facilities; Martin Ott, Chief, Planning and Administrative Services, Northern Region, Department of Transportation and Public Facilities. GENERAL SUBJECT(S): HB 47-APPROP: GOVERNOR'S CAPITAL BUDGET Department of Environmental Conservation Department of Transportation and Public Facilities 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 - 65 SIDE A 000 DEPARTMENT OF ENVIRONMENTAL CONSERVATION 37 Representative Stressed the need to account for use of Hudson the AHFC dividend in the operating budget so that they are not overspent. 101 STEVE HILDEBRAND, Clarified that of the $103 million AHFC FISCAL ANALYST, dividend dollars for FY02, $53 million OFFICE OF MANAGEMENT dollars was set aside for capital AND BUDGET, OFFICE projects. Another $6 million dollars was OF THE GOVERNOR originally included in the Governor's request to fund debt retirement. The Governor's request accounts for the full $103 million dollars. 185 ROB CARPENTER, Explained that the House has appropriated FISCAL ANALYST, $2.8 million dollars for operating LEGISLATIVE FINANCE purposes. There is still $3 million DIVISION dollars unaccounted for. 243 Mr. Hildebrand Observed that HB 103 and HB 104 did not appropriate $6 million dollars into the Debt Retirement Fund as proposed by the Governor. 258 Representative Croft Summarized that HB 103/HB 104 appropriated $2.8 million dollars and there is $52 million dollars proposed in the capital budget. 287 Mr. Carpenter Noted that the governor originally proposed $58 million dollars capital projects. The House allocated $52 million dollars in the capital budget. The remaining, minus $3.1 million dollars, is obligated to debt service payments for AHFC bonds issued in prior years. 406 Representative Croft Of the original there was $45 million for debt retirement, leaving $58 million dollars. The $58 million for capital projects was reduced to $52 million dollars, leaving $6 million dollars. The Governor's plan would have used the $6 million for debt retirement. The House uses $2.8 million dollars of this amount for operating allocations, leaving $3.2 million dollars. Mr. Hildebrand Explained that the Governor has discretion to spend dividends from state corporations. Alaska Housing Finance Corporation (AHFC) supports housing and infrastructure. He stressed that it is appropriate to apply the dividend for the Department of Environmental Conservation's Village Safe Water Projects program and municipal matching grants as infrastructure building. 627 Mr. Easton Stated that the department's mission is to assist communities in improving sanitation conditions. The department achieves this goal through grants and low interest loans to communities to build water, sewer and solid waste facilities. He pointed out that the budget composition has changed over the past few years. In FY 99 the state invested $44 million state dollars in sanitation. The FY01 budget would invest $29 million state dollars. Total funding has increased by $11 million dollars through additional federal funding. This is the result of a change of the state/federal match ratio to 1/3 from 1/1. 796 Mr. Easton Noted that statute change has allowed better capitalization of the loan fund. 821 Mr. Easton Discussed the village safe water program. 874 Mr. Easton Discussed the Village Safe Water Project Administration request of $1,961,100 million dollars. This request is a transfer from the operating budget to pay for engineers and other costs of managing the program. 899 Mr. Easton Reviewed the request for Village Safe Water Feasibility Studies. The request funds subsequent allocations for feasibility studies. They are engineering studies to look at options for water, sewer, and solid waste facilities. 940 Mr. Easton Discussed Village Safe Water Projects. The request funds water and sewer projects. 966 Mr. Easton In response to a question by Representative Croft, Mr. Easton explained that the $29 million dollar figure did not include all of the AHFC projects and was only for sanitation. The four appropriations and capitalization of the clean water loan fund add to $29 million dollars. 1169 Mr. Easton Reviewed the Municipal Water, Sewer, and Solid Waste Matching Grant request. This program makes grants to larger communities. Applications are ranked. There is a local match requirement of 10 - 15 percent. It is primarily funded through state funds. There are federal grant funds for projects off the road system at 75 percent federal and 25 percent state funds. 1248 Representative Croft Referred to municipal grants. The grants should be all state or 25 state/75 federal. 1299 Mr. Easton Noted that federal funds could only be used in rural communities or Alaska Native villages. The department defines rural as off the road system. 1326 Representative Croft Questioned why general funds are being used for the Environmental Health Food Safety Laboratory Construction. 1388 Mr. Easton Did not know the answer and offered to provide further information. 1405 Representative Questioned if the department cooperated Hudson with the Denali Commission on underground storage tank removal and who is responsible. He noted that 470 funds are being used. 1433 Mr. Easton Referred to Small Drinking Water System Operator Certification Project. This is a one time new appropriation. It would be used to train and certify operators of small drinking water systems as the result of a change in federal rules. The federal rule changed the requirement for a certified operator for systems serving 50 people to 25 people. Operators of 600 systems will have to be trained and certified. There is no state match. Most of the funds would be used to contract with the University of Alaska. There are federal funds to cover the cost after the one-time funds are exhausted. 1587 LARRY DIETRICK, Responded to questions by Representative PROGRAM MANAGER, Hudson. He explained that the state and PREVENTION AND federal programs are coordinated on rural EMERGENCY RESPONSE bulk fuel replacements. The projects are PROGRAM, DEPARTMENT funded through Trans-Alaska Pipeline OF ENVIRONMENTAL Liability (TAPL) funds. He noted that a CONSERVATION portion of the TAPL funds are appropriated through AIDEA and a portion comes from the federal government through the Denali Commission. Those projects that are furthest from compliance are addressed first. The project list is run through AIDEA. 1703 Mr. Dietrick Reviewed the request for Statewide Contaminated Sites Cleanup. The request is for $5 million dollars from the Oil and Hazardous Substance Release Prevention and Response Fund. This request addresses problems at state owned facilities, state leaking underground sites and orphaned sites. 1736 Mr. Dietrick Discussed the request for Hazardous Material Response Capabilities for Local Government. The funding source is the Oil and Hazardous Substance Release Prevention and Response Fund. The funds go to local communities to equip them to assist the state response. The funding goes to the hazmat teams in Anchorage and Fairbanks. These teams can leave their jurisdiction to go to any area in the state. 1827 Representative Asked if there are many occasions where Hudson the state has to assist. 1856 Mr. Dietrick Responded that there have been three ammonia releases in the last 18 months to 2 years. 1872 Representative Questioned if overhead costs are tracked Hudson for the site cleanup. 1889 Mr. Dietrick The $5 million dollars for state cleanup goes entirely to cleanup. 1900 Mr. Dietrick Discussed the request for Grants and Loans for Underground Storage Tanks. The funding source for the $1 million dollars request is the Storage Tank Assistance Fund. He observed that SB 128 imposed new network requirement, which reduced the number of eligible applicants. This would fund grants under SB 128. Applicants were reduced from 200 down to 51. 1988 Mr. Dietrick Discussed the request for Oil and Gas Transportation: Aging Infrastructure Issues. The request for $500 thousand dollars would be funded from the Oil and Hazardous Substance Release Prevention and Response Fund. He noted that the infrastructure would have to support on going production of oil. Issues need to be addressed to prevent spills. He noted that a Cook Inlet risk assessment would occur. The department is also looking at corrosion and erosion and evaluating the best available technology to be used in spill prevention. 2059 Mr. Dietrick In response to a question by Vice-Chair Bunde, Mr. Dietrick explained that erosion is occurring due to the sand. Discussion ensued regarding the 2 cents tax. The tax has been shut off since 1995. There is approximately $59 million in the Oil and Hazardous Substance Release Prevention and Response Fund. 2139 TOM CHAPPLE, Discussed the Fine Particulate Monitoring DIRECTOR, DIVISION Project request. It is in response to a OF AIR AND WATER new federal air-monitoring standard. The QUALITY, DEPARTMENT project determines if the state meets the OF ENVIRONMENTAL standard. CONSERVATION 2192 Mr. Chapple Reviewed the Environmental Monitoring and Assessment Program request. The request would fund a baseline study of conditions along the coastline for contaminates. The project is a random sampling and is 100 percent federally funded. 2252 Mr. Chapple Discussed the Amchikta Workers Health Assessment Project request. The project would focus on the health of workers that were present during the testing. The Department of Environmental Conservation is working with the Department of Labor and Workforce Development. It is a three- year project. 2306 Representative Clarified that this would be the first Hudson year of the project. He questioned if the project would be through contract. 2326 Mr. Chapple Responded that the project is almost entirely done outside of the department through contract. The department has a minor role in the steering committee. 2347 Representative Questioned why the federal government Lancaster does not do the project. 2359 Mr. Chapple Observed that it has been difficult to get Congressional funding. Alaska is pushing the project. 2375 Representative John Summarized that that state prefers to Davies handle the project. TAPE HFC 01 - 65, Side B DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES 30 NANCY SLAGLE, Discussed the safety Inspection of State DIRECTOR, DIVISION Owned High Risk Facilities request. She OF ADMINISTRATIVE noted that there have been incidents, SERVICES, DEPARTMENT which have indicated that there are OF TRANSPORTATION structural issues. There are 50 state- AND PUBLIC owned buildings in the high or moderate FACILITIES risk category. 10 - 15 buildings could be addressed. 221 Ms. Slagle Discussed the Material Stockpiles for the Dalton Highway request. The request would allow the state to maintain the road where it is not federally eligible. 317 Ms. Slagle Reviewed the Harborview Development Center request. The request would allow continuation of the mothballing of the portion of the facility that is not being used. Representative Noted that there has not been a plan by Harris the city. The hospital is still housed in the building and the city has some responsibility. 540 Representative John Questioned if the state would have an on- Davies going cost. 555 Ms. Slagle Responded that the city would cover the cost of the used portion. The state would watch over the mouth-balled area at a minor cost. The city is contemplating building a new hospital, in which case the state would address the building as a whole. 636 Ms. Slagle Discussed the Weights and Measures Testing Unit Replacement request. She observed that a control and testing unit needs to be replaced. The current vehicle is 30 years old. 738 Representative John Questioned if the vehicles were part of Davies the state equipment fleet. 788 Ms. Slagle Responded that they are not part of the fleet. Both are old vehicles and expensive to replace. 826 Ms. Slagle Reviewed the Alaska Marine Highway System Overhaul, Rehabilitation and Mandatory Training request. This is an annual request to keep the vessels safe. The vessels receive 5 - 6 weeks of overhaul on an annual bases. There are also funds for repairs at the Ketchikan warehouse facility. 924 Ms. Slagle Discussed the Facilities Deferred Maintenance and Critical Repairs request. There are $40 million dollars in deferred maintenance needs. She observed that the top priorities are addressed. 1017 Ms. Slagle In response to a question by Representative Harris, Ms. Slagle noted that over the last 4 years the department has received from $600 thousand dollars to $1 million dollars for deferred maintenance. The request has generally been $1 to $1.5 million dollars. 1108 Representative Croft Observed that the state is falling further behind each year. 1164 Ms. Slagle Agreed and noted that some stations are becoming so bad that they need to be replaced. 1185 Ms. Slagle Discussed the Emergency and Non-Routine Repairs request. She observed that the repairs could affect harbors, airport or roads. Juneau / Haines storm damage was funded from this component. 1293 Ms. Slagle Reviewed the Corps of Engineers Harbors Program. She observed that the Unalaska project is included and would use a local match. These projects are separate from the Governor's bill. They would provide repairs. 1364 Ms. Slagle Discussed the Harbor Deferred Maintenance request. The request would address harbors that are not ready for local ownership in the Governor's bill. 1415 Representative Clarified that the state has not had to Harris continue funding repairs at harbors that have been turned over to local communities. Local communities can set their own fees. He concluded that deferred maintenance is an important problem. 1516 Ms. Slagle Reviewed the Airport Deferred Maintenance request. 1558 Ms. Slagle Discussed the Highway Deferred Maintenance request. This is an annual request that addresses items that are not covered with federal funds. 1579 Ms. Slagle Reviewed the State Equipment Fleet Replacement request. The state owns 75,000 vehicles. This allows for replacements. 1627 Representative Questioned if the vehicles are bought in Lancaster state. 1639 Ms. Slagle Noted that the vehicles are sent to bid. They are awarded to the low bidder. 1674 THOMAS BRIGHAM, Noted that there are 102 federally funded DIRECTOR, DIVISION aviation projects. There is $154 million OF STATEWIDE dollars for aviation improvement, $43.5 PLANNING, DEPARTMENT million dollars international airport OF TRANSPORTATION funds, and $113.2 million dollars in AND PUBLIC bonds. The typical match is 6 percent for FACILITIES aviation. Surface transportation projects typically have a 9 - 10 percent state match: a total of $41 million dollars. 1780 Representative John Pointed out that $41 million dollars is a Davies large portion of the state's capital budget. 1815 Vice-Chair Bunde Stated that the state could refuse the federal funds and use the state match for deferred maintenance. 1844 ADJOURNMENT The meeting was adjourned at 3:05 p.m.