Legislature(1993 - 1994)
02/19/1993 01:30 PM House FIN
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
February 19, 1993
1:30 P.M.
TAPE HFC 93 - 27, Side 1, #000 - end.
TAPE HFC 93 - 27, Side 2, #000 - end.
TAPE HFC 93 - 28, Side 1, #000 - #237.
CALL TO ORDER
Co-Chair Ron Larson called the meeting of the House Finance
Committee to order at 1:30 P.M.
PRESENT
Co-Chair Larson Representative Brown
Vice-Chair Hanley Representative
Grussendorf
Representative Therriault Representative Martin
Representative Navarre Representative Parnell
Representatives MacLean, Hoffman and Foster were not present
for the meeting.
ALSO PRESENT
Glen Olds, Commissioner, Department of Natural Resources;
Nico Bus, Chief, Financial Services, Department of Natural
Resources; Dianne Lyles, Chief, Land Records Information,
Office of the Commissioner, Department of Natural Resources;
Rod Mourant, Special Assistant to the Commissioner,
Department of Revenue; Representative Pat Carney;
Representative Bill Williams.
SUMMARY INFORMATION
HB 60 An Act making appropriations for capital projects;
and providing for an effective date.
OVERVIEWS: Department of Natural Resources
HB 60 was held in Committee for further
discussion.
HB 144 An Act relating to fees for certain costs of
administering the permanent fund dividend program.
HB 144 was held in Committee.
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HOUSE BILL 60
"An Act making appropriations for capital projects; and
providing for an effective date."
GLENN OLDS, COMMISSIONER, DEPARTMENT OF NATURAL RESOURCES
(DNR), provided the Committee with handouts addressing DNR's
Capital Improvement Projects (CIP) requests. [Attachment #1
- #5].
Commissioner Olds introduced the Governor's priorities for
Alaska.
1. Implement responsibilities of an Owners' State.
2. Stimulate sustainable economic development.
3. Implement efficiencies.
4. Deliver essential services.
5. Stimulate local initiative and personal
responsibility.
Commissioner Olds discussed the Department's strategic
missions. As Alaska moves into the 21st century, it is
facing a time of serious economic stress. In response to
the Governor's priorities, the missions of the DNR are:
1. To vigorously fulfill and implement the Statehood
compact and pioneer effective leadership of an
Owners' State through the integration of State and
federal interests, cooperation, and protect State
interests.
2. To stimulate resource-based economic activity
while conserving Alaska's wild, scenic and
cultural values as a major player in an evolving
world.
3. To simplify and accelerate regulatory processes
and organizational structures to allow rapid,
sustained economic growth.
4. To raise public awareness of Alaska's natural
resource asset base, its market potential within
Alaska and the world, how it effects our daily
lives, and how to implement its promise for our
common future.
Commissioner Olds listed DNR's priority ranking of Capitol
Improvement Projects contained in HB 60.
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1. Owner State Assertions and Land Selection request
for $2,265.0 million dollars.
a. Land Selection Audit request for $1,800.0
million dollars. The deliverables are clear
title to the last twenty million acres of
land from the federal government and updates
to the State's Land Records.
Representative Hanley asked if this request would be the
last amount requested by DNR in order to finish these
projects. Commissioner Olds stated the requested allocation
would finish the selection process. He added there would be
a second stage to go to patent. Representative Hanley asked
if the requested amount would address all of this years
needs. Commissioner Olds stated it would. Representative
Hanley questioned if any land would be lost if all criteria
was not met.
DIANNE LYLES, CHIEF, LANDS RECORDS INFORMATION, OFFICE OF
THE COMMISSIONER, DEPARTMENT OF NATURAL RESOURCES, responded
that the Congressional deadline for the selection is 1/4/94.
Past that date, the State of Alaska can not select any new
lands. Currently, there are 140 million acres of which 86
million are patented or tentatively approved. Once it is
patented, it can be developed. The total entitlement is 105
million acres. The State of Alaska is allowed to over-
select the entitlement by twenty five percent. The
requested allocation will allow DNR to review an additional
45 million acres currently in selection status, then decide
which has the highest value, moving them into an expedited
process with the Bureau of Land Management.
Commissioner Olds listed additional CIP requests:
b. Navigability determinations request for $290
thousand dollars. Many of the state's rivers
and streams and subsequent securing of
ownership and management of submerged lands
have not yet been evaluated regarding their
navigability.
c. The state needs to settle many of the right
of ways for their value to the public for
transportation and resource development
request for $175 thousand dollars.
2. Seismic Data Acquisition/Evaluation request for
$580 thousand dollars. The purchase of seismic
data is important for the pre-evaluation of areas
proposed for leasing in the State's five year oil
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and gas lease schedule.
Representative Grussendorf questioned the request for a
student intern position.
NICO BUS, CHIEF, FINANCIAL SERVICES, OFFICE OF THE
COMMISSIONER, DEPARTMENT OF NATURAL RESOURCES, replied that
position would enter most of the required data into the
system and then manipulate that information.
3. Basin Analysis packets requests for $330 thousand
dollars. This project funds the preparation under
contract of a series of promotional packets
consisting of non-proprietary geological and
geophysical maps of selected under explored areas
of the State having oil and gas potential.
4. Geological/Geophysical Inventory request for $1.5
million dollars. The State's most prospective
mineral lands must be delineated and their
potential clearly understood by sources of
investment capital. This is the second year
funding of a multi-year project.
Representative Brown asked if the above request would be for
mineral inventory rather than oil and gas. Commissioner
Olds replied that the Oil and Gas Division and the
Geophysical Division would converge on the selectivity for
all resources including oil, gas and other minerals.
Representative Brown asked if non petroleum areas would be
selected for mineral focus. Commissioner Olds stated this
was not an accurate assessment. The component addresses all
aspects of which oil and gas are included. Representative
Brown asked if the Department expected to discover new oil
and gas basins in the State. Commissioner Olds replied that
the Department has surface information about the basins,
however, the real potential is not known until an analysis
has been completed.
5. Land Status GIS request for $330 thousand dollars.
The conversion of the State's ownership maps to
digital format has been accelerated in the last
two years. The plan was to complete this
conversion in the next three years. At this
request level the project can not be expedited as
originally intended.
6. Parks-Water, Toilets, Dump-stations request for
$750 thousand dollars. Many of the State's parks
units do not meet the new water quality standards.
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7. Rehabilitation of Existing Parks/Tourist
Facilities request for $750 thousand dollars.
Many of the State park areas and facilities have
deteriorated due to years of deferred maintenance.
8. OGRA system software upgrade request for $25
thousand dollars. The Royalty Accounting section
computer's annual hardware and software upgrades.
9. Land Settlement Projects request for $175 thousand
dollars. The Land Settlement project removes
obstacles to the sale, lease, and development of
lands by providing funds for the survey of those
lands, or providing access to land ready for
disposal.
10. Forest Inventory request for $350 thousand
dollars. This project will fund the first phase
inventory of the Valdez/Copper River and Tanana
Valley.
11. Forest Health Initiatives request for $450
thousand dollars. This request continues the
Forest Health Initiative by expanding into
Valdez/Copper River, Mat-su and Tanana Valley
providing for public involvement in forest from
insects and disease, determining alternatives for
forest health restoration and finally providing
for decisions which could range from no action to
prescribed burning, harvest, reforestation and so
forth.
12. Tanana Valley Resources Development request for
$405 thousand dollars. This project pays for the
work to have timber sales in the Tanana Valley.
It is a scaled down version of the total need.
13. Reforestation request for $250 thousand dollars -
GF/$200 thousand dollars Reforestation Fund. This
project funds the reforestation of some parts of
the Tanana Valley, Tyonek, and Kenai Peninsula,
and the South West area.
14. Recorder's Office - Records Preservation request
for $200 thousand dollars. The State Ombudsman
has recommended that the State refilm and preserve
itsrecords as they have deteriorated to a point
where they are no longer usable.
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(Tape Change, HFC 93-27, Side 2).
Representative Hanley asked if any of the land being
developed belongs to the Mental Health Trust. Commissioner
Olds replied that the disputed land has tied up over seven
million acres. Representative Hanley asked that further
details be provided to the Committee.
Commissioner Olds continued discussing the department's CIP
requests.
15. Fire Radio Communications equipment request for
$150 thousand dollars. The fire fighters depend
on good communication equipment. BLM wants their
equipment back and the State needs to buy
equipment.
16. Information Systems Efficiencies downsizing for
$100 thousand dollars has been deleted from the
budget request.
17. New Recreational Tourist Facilities Construction
request for $250 thousand dollars. Eagle River
Green Belt access construction on Chugach State
Park.
18. Coal-bed Methane Programs request for $300
thousand dollars. Alaska's high coal resources,
distributed across many areas of the State, could
top 5.5 trillion tons--1/3 to 1/2 of the U.S.
total. Indirect evidence indicates Alaska could
have an in-place coal bed methane resource of two
thousand trillion cubic feet. This project is
designed to assess the potential of this resource.
19. Commercial Recreational Offerings request for $150
thousand dollars. In order to have recreational
developments of State land money is needed to
upgrade roads and to market projects for Northeast
Denali.
20. Hydrologic Network Evaluation request for $275
thousand dollars. A State/Federal cooperative
effort to carefully review Alaska's water stream
gaging network and determine the best location for
gages. This is the most fundamental of water
quantitative evaluation tools. These State funds
will trigger an equal amount of matching federal
funds.
Commissioner Olds commented on the DNR-USGS stream gaging
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coop program. Stream flows will be measured for community
and public water systems, highway/bridge design and
construction, water permitting and water rights
applications, public health and safety. This is also a
State/Federal cooperative effort and it will trigger an
equal amount of matching funds.
21. Completion of the STORET System request for $125
thousand dollars. This project will significantly
enhance permit application processes and eliminate
much manual effort.
22. Agricultural Land Disposal request for $100
thousand dollars. This funds the disposal of
agricultural parcels per the Governor's
Agricultural Task Force. Providing economic
opportunities to new agricultural producers was a
major focus of the task force.
REPRESENTATIVE PAT CARNEY recommended that the Department
reconsider involvement with long term development loans for
farmers. He noted this would be a disservice to the
farmers.
Representative Brown questioned placing item #22 in the
capital budget rather than the operating budget. Mr. Bus
stated these positions were all new surveys and noted there
is not enough money in the operating budget from CIP
receipts. Representative Brown asked if these services
would be contracted out. Mr. Bus stated they would be
contractual monies.
23. Plant Material Center equipment replacement
request for $80 thousand dollars. Much of the PMC
equipment is in very bad shape or no longer
functional. This results in much wasted time
fixing or maintaining equipment.
24. Wetlands Investigation & Classification request
for $60 thousand dollars. The objective of this
project is to define the differences between
Alaskan wetlands and those of other regions of the
USA.
Representative Brown asked why the mining project was placed
in the capital budget rather than the operating budget.
Commissioner Olds stated that mining projects were not a
development and wetland investigation will affect the
outcome of land development. Ms. Lyles added, that
currently there is a project in the State to examine the
wetlands classification methodology. The State of Alaska is
asking that a hydromorphic methodology be used which would
allow more lands to be appropriately developed. The
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Division of Water presented this as a one time job, to gain
the approval and to establish that methodology. After the
methodology is adopted, then it becomes an inventory
function.
25. Mining Projects request for $50 thousand dollars.
This is a pilot program to demonstrate that the
mining industry has very high revenue potential
for the State. Funds will be used to purchase a
smelter study and video production. These funds
will be matched by private industry.
Commissioner Olds added options not involved with CIP
requests.
* UST Testing, Eval., Removal - $654 thousand
dollars "470" fund.
* Mental Health Trust Reconstitution - $3.773 MH
Trust Fund
Commissioner Olds provided the Committee with
Attachment #5 describing the Mental Health Trust
Project.
* Land & Water Conservation Fund
* Historic Preservation Fund
Representative Therriault asked if the $654 thousand dollars
of the 470 funds were due to a prioritization. Commissioner
Olds explained those are different categories and do not
originate from general fund dollars. Representative
Therriault questioned the determination process used in the
decision and asked if the sites presented a threat to human
health and public safety. Commissioner Olds stated that
Commissioner Sandor has the main responsibility for the
conservation analysis and believes those items listed to be
critical to health factors.
Representative Therriault understood that the State uses the
threat of using the 470 fund to keep private land owners in
line to clean up projects. He felt that the State should
use general funds for clean up rather than 470 funds.
Representative Brown stated that cost recovery should be
sought from the responsible parties. Representative
Therriault stated that in many cases those parties are now
bankrupt. Commissioner Olds stated that the Department of
Law is involved in all the above mentioned cases and will
maximize recovery of all costs.
Representative Brown questioned spending the proposed budget
to assess unknown resources. Commissioner Olds stated he
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was willing to revisit cost projections, but noted, it is
his responsibility to maximize all resources.
Representative Brown emphasized her concern with the
determination process used by the Department.
Representative Brown referenced the GIS System Project for
$330 thousand dollars. She stated that the
Capital/Operational Status Report shows that DNR still has
an unexpended balance of $753 thousand dollars. Mr. Bus
replied that the 1991 appropriation has been fully spent.
The 1992 appropriation will be fully spent by the end of the
fiscal year. The documentation indicates that there is
anticipated carry forward of $175 thousand dollars. The
original request of the Department was for $660 thousand
dollars and because of the carry forward it was reduced.
HOUSE BILL 144
"An Act relating to fees for certain costs of
administering the permanent fund dividend program."
Representative Martin stated that HB 144 is designed to
transfer the costs of administering permanent fund dividend
assignments and attachments back to the person whose
financial obligations are the cause of assignment or
attachment.
The amount of every Alaskan's permanent fund dividend is
affected by the cost of operating the Permanent Fund
Dividend Division. The Division processed over fifty-one
thousand assignments in 1992. If HB 144 is passed, the cost
of processing the attachment or assignment will be paid by
the obligor instead of being absorbed by the Division as a
cost of doing business. The effect of the bill would be
that every Alaskan's dividend would be increased, albeit by
a small amount; and those Alaskans whose financial practices
cause their dividends to be assigned will pay a fee for the
cost of the extra handling and processing.
Representative Navarre commented that he thought the cost
would be closer to $.10 per check. He felt this was a minor
charge. Representative Hanley agreed with Representative
Navarre although he thought that if someone were at fault
they should pay the administrative costs. Representative
Navarre questioned the assignments from denied felons and
the probability that those costs would be paid.
(Tape Change, HFC 93-28, Side 1).
ROD MOURANT, SPECIAL ASSISTANT TO THE COMMISSIONER,
DEPARTMENT OF REVENUE, clarified that the charge would be
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$1.18 per assignment which is processed by the Division.
Administrative Settlement Act
Representative Brown asked when the accounting would be
available from the Department of Revenue regarding the
Administrative Settlement Account. Mr. Mourant stated the
final version of that information is nearly ready.
Representative Brown understood that the amount of the
settlements would total $279 million dollars. Mr. Mourant
stated that he did know the numbers but would provide the
Committee that information as soon as it was available.
Representative Brown pointed out that there are large
amounts of money being moved around and she wanted to have
the information made available as soon as possible. Mr.
Mourant replied, that the review and auditing process
relating to assessment payments is not a simple process.
HOUSE BILL 144
Representative Navarre asked if more than one entity
attached to the dividends would their administrative costs
be added. Mr. Mourant replied, that if there was sufficient
balance to satisfy all services, they would be charged each
time. Representative Navarre asked who would have priority
in an account. Mr. Mourant stated that either the IRS or
the CSED would have priority and noted that each service
does cost the Department of Revenue an average of $1.18
average.
Representative Martin MOVED to report HB 144 out of
Committee with individual recommendations. Representative
Navarre OBJECTED.
A roll call vote was taken on the MOTION.
IN FAVOR: Martin, Parnell, Therriault, Hanley,
Larson.
OPPOSED: Navarre, Brown, Grussendorf.
Representatives Hoffman, Foster and MacLean were not present
for the vote.
The MOTION FAILED, 5-3.
Representative Martin requested HB 144 be reconsidered at a
later date. HB 144 was HELD in Committee for further
discussion.
ADJOURNMENT
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The meeting adjourned at 3:10 P.M.
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