Legislature(2001 - 2002)
02/15/2001 01:58 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
February 15, 2001
1:58 PM
TAPE HFC 01 - 29, Side A
TAPE HFC 01 - 29, Side B
TAPE HFC 01 - 30, Side A
CALL TO ORDER
Co-Chair Mulder called the House Finance Committee meeting
to order at 1:58 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 Richard Foster
Representative John Harris
Representative Bill Hudson
Representative Ken Lancaster
MEMBERS ABSENT
Representative Carl Moses
Representative Jim Whitaker
ALSO PRESENT
Annalee McConnell, Director, Office of Management and
Budget, Office of the Governor; Bill Britt, State Pipeline
Coordinator, Department of Natural Resources; Ken Taylor,
Director, Division of Habitat and Restoration, Department of
Fish and Game; Pat Galvin, Director, Governmental
Coordination, Office of the Governor; Remond Henderson,
Director, Division of Administrative Services, Department of
Labor and Workforce Development; Kurt Parkan, Deputy
Commissioner, Department of Transportation and Public
Facilities; Sharon Barton, Director of Personnel, Department
of Administration; Mike Maher, Director, Division of
Administrative Services, Department of Revenue; Janet
Kolaski, Director, Division of Elections, Office of the
Lieutenant Governor; Laurie Alfred, Business Manager,
Division of Elections, Office of the Lieutenant Governor;
Larry Persily, Deputy Commissioner, Department of Revenue;
Kurt Fredrickson, Deputy Commissioner, Department of
Environmental Conservation; Dan Spencer, Director, Division
of Administrative Services, Department of Administration;
Richard McMahon, Chief, Lands Records, Department of Natural
Resources; Ken Freeman, Special Assistance, Business and Gas
line Development, Office of the Governor; Jan Levy,
Supervising Attorney, Juneau Oil Gas and Mining Section,
Department of Law.
PRESENT VIA TELECONFERENCE
Dan Dickinson, Division of Tax, Department of Revenue; Kelly
Nicolello, Assistant State Fire Marshal, Division of Fire
Prevention, Department of Natural Resources; Richard
McMahon, Chief, Lands Records, Department of Natural
Resources; Bill Van Dyke, Lease Administration/Royalty,
Division of Oil and Gas, Department of Natural Resources;
Ken Freeman, Office of the Governor; Cam Toohey, Executive
Director, Arctic Power.
SUMMARY
HB 117 "An Act making supplemental and other
appropriations; and providing for an effective
date."
CSHB 117 (FIN) was REPORTED out of Committee with
a "do pass" recommendation.
HOUSE BILL NO. 117
"An Act making supplemental and other appropriations;
and providing for an effective date."
Co-Chair Mulder provided members with a proposed committee
substitute, work draft #22-GH108\C, dated 2/15/01 (copy on
file). He observed that items that were not time sensitive
were deleted from the Governor's submission. He observed
that the most difficult item to assess pertained to the
natural gas pipeline. He stressed that an attempt was made
to identify portions of the request that would have a
positive impact on the project and were time sensitive. The
following portions of the request were identified as time
sensitive:
Sec. DEPARTMENT OF NATURAL RESOURCES. The sum of 213,900
is appropriated from the general fund to the Department of
Natural Resources, Division of Oil & Gas for the cost of
studies relative to gas royalties and Reservoir Studies.
Sec. DEPARTMENT OF LAW. The sum of 203.700 is appropriated
from the general fund to the Department Law for retaining
legal experts to advise on gas pipeline issues.
Sec. DEPARTMENT OF REVENUE. The sum of $75,000 is
appropriated from the general fund to the Department of
Revenue to contract for an analysis of the state's fiscal
regime for natural gas development.
ANNALEE MCCONNELL, DIRECTOR, OFFICE OF MANAGEMENT AND
BUDGET, OFFICE OF THE GOVERNOR provided information on the
natural gas pipeline. She observed that agencies have worked
since the fall to determine what activities the state could
undertake to advance the prospects for commercialization of
North Slope gas. She noted that a capital project for the
gas line was included in the Governor's December 15, 2000
submittal. The Governor anticipates that additional
amendments would be submitted in addition to this request.
She emphasized that early advancement of the project would
increase state revenues by $200 - $400 million dollars.
BILL BRITT, STATE PIPELINE COORDINATOR, DEPARTMENT OF
NATURAL RESOURCES provided information on the supplemental
request. He maintained that the FY 2001 Supplemental Budget
Request would help advance development of Alaskan natural
gas consistent with the following principles:
- Alaskan access to the gas;
- Alaskans working on the project; and
- Alaskan returns for our resources.
Mr. Britt highlighted actions contained in the proposal:
Establishing a coordinated state permitting process;
Working with project proponents to advocate Alaskan
interests; and
Informing Alaskans of the issues involved in developing
Alaskan natural gas, and soliciting their views on
those issues.
Mr. Britt pointed out that these actions are not specific to
a route. Co-Chair Mulder stated a preference for a southern
route. Mr. Britt noted that the Administration shares the
preference for a southern route.
Representative John Davies questioned how much of the route
would focus on South Eastern Alaska from Delta Junction. He
questioned how much is route specific.
Mr. Britt stated that the requests vary. The request for
fire prevention in the Department of Public Safety is for
training of deputy fire marshals in gas pipeline and gas
facility fire prevention codes. This would be applicable to
any route. Requests from Department of Fish and Game and
Department of Environmental Conservation would be targeted
to the highway route.
Mr. Britt emphasized that the intent is to provide prompt
authorization in order to increase Alaska's financial return
from the project.
Mr. Britt stressed that the efforts in this request are
needed now if the department is to be ready to make policy
decisions and efficiently process the permit applications.
They expect to receive applications before the end of this
calendar year.
Regarding the permitting applications, the department feels
that if they are ready they can positively affect the length
of the permitting process and construction. "Time,
genuinely, can be the difference between an opportunity
ceased and an opportunity missed here." By minimizing the
potential for delays they maximize the potential of success.
The ultimate beneficiary is the economy of Alaska.
Mr. Britt observed that British Petroleum Inc., Phillips and
Exxon have an office with 50 staff in place now, and have
indicated that they will grow that office to 90 by the end
of the year. They have also indicated that they will spend
$75 million dollars in the next 9 months preparing for the
gas pipeline project. The work in the supplemental request
is necessary to allow Alaska to advise project proponents,
to keep the state from impeding their progress, and to keep
Alaskan priorities at the forefront of the discussion, as
the proponents move forward in a very aggressive manner. He
noted that there are other interested parties in
discussions.
Mr. Britt reiterated that the Department of Revenue has
estimated that the state will receive between $200 million
and $400 million dollars in the first year of gas pipeline
operation. It may be appropriate to measure general fund
investments needed to accelerate gas pipeline development
against the return.
KURT FREDRICKSON, DEPUTY COMMISSIONER, DEPARTMENT OF
ENVIRONMENTAL CONSERVATION provided information on the
proposal for a natural gas pipeline. The project will touch
the majority of their program areas. There are air and water
quality, solid waste disposal, sewage handling and disposal,
drinking water and food safety issues. He emphasized that an
aggressive program would resolve many of the potential
issues up front. The proposal would authorize the hire of
six positions to work with air, water, spill prevention and
response, and environmental health. An air engineer would
also be hired to work on pre-monitoring of ambient air
quality. There is a large potential emissions source in the
North Slope and Fairbanks.
Mr. Fredrickson noted that the department would create an
office to focus on gas line process in areas of specific
concern. The department would also review data collected by
various entities that would be useful. Companies are
enquiring regarding environmental issues.
Representative Croft referred to statements by the
department referring to the project sponsor: Pre-application
work with the project sponsor to update and perfect DEC
permit applications' and supporting environmental
documentation will reduce future delays in approving DEC
permit applications. He asked Mr. Fredrickson to identify
the project sponsor. Mr. Fredrickson acknowledged that there
is not an absolute project sponsor at this time. He
anticipated that the producers would be the project
sponsors.
Co-Chair Williams acknowledged the importance of the gas
pipeline. He observed that oil companies have not indicated
that they would build the pipeline earlier. He stressed that
the budget is tight and that "nothing out there is concrete,
but we are going to pour concrete." He suggested that the
funding be made available in the next year.
Mr. Britt responded that the window of opportunity may be
narrow. He observed that demand has not kept up with supply.
Supply will increase and Alaska can be part of the increase.
He stressed that the project could be jeopardized by a lack
of funding.
Co-Chair Williams expressed further concerns. Mr. Britt
argued that the indications are good that a gas pipeline
would be built. The choice is to wait until an application
is submitted and risk delay.
Ms. McConnell clarified that section 8 of HB 117 contains
the Governor's submittal relating to gas pipeline projects.
Co-Chair Mulder observed that the Department of
Environmental Conservation is requesting $141.9 thousand
dollars to hire a Department of Environmental Conservation
liaison to work with the State Pipeline Coordinator and
other state agencies to establish an operating gas pipeline
office. They would also hire four environmental program
specialists (air, water, spill prevention & response, and
environmental health) to work with the project sponsor, and
other state and federal agencies on issues within their
program jurisdiction and expertise. They would also hire an
air quality chemist to work with the project sponsor on
summer air quality monitoring objectives.
KEN TAYLOR, DIRECTOR, DIVISION OF HABITAT AND RESTORATION,
DEPARTMENT OF FISH AND GAME explained that the department's
responsibility is to assure that fish and wildlife
populations are protected during the construction phase.
They are requesting two positions: a Pipeline
Liaison/Surveillance Supervisor and a Design/Permitting
Coordinator. He noted that activities will be postponed
until FY02 where possible. Once an application is received
the applicant would reimburse the department. The positions
would begin to review and analyze records, identify
potential data gaps, select and hire staff for the summer
field season and work with other agency liaisons to create a
streamlined gas pipeline office.
Vice-Chair Bunde asked for details regarding equipment
purchases. Mr. Taylor observed that the department would
need to buy some field equipment for staff starting in July
2001. There would be two field camps.
Co-Chair Mulder questioned what would be lost if the
department's request was not included in the fast track
legislation. Mr. Taylor explained that the department would
not have time to hire the appropriate staff for the summer
season if they do not get started. There are three critical;
field seasons: summer, winter and spring. Co-Chair Mulder
questioned how areas could be evaluated in the absence of an
application. Mr. Taylor emphasized that any of the
alternatives would use a significant portion of the current
pipeline right-of-way. The oil pipeline utilizes a heated
pipe. The gas pipeline would be a cool pipe and may be
buried in places. The gas pipeline may be within the right
away but would not be adjacent. The right-of-way varies.
Mr. Britt noted that there are engineering issues related to
safety. The State Pipeline Coordinator's office does land
management and engineering due diligence associated with the
projects. Engineers have a variety of design alternatives
for stream crossings. He explained that engineers would base
their work on imperatives and environmental data.
Co-Chair Mulder questioned how they would analyze the route
before an application is submitted. Mr. Britt responded that
the Department of Fish and Game is not proposing to send
large teams out to sample. The producers are proposing to do
field work. Funding would allow the state to work with the
producers to assure that the data is sensitive to state
regulatory and statutory requirements.
Vice-Chair Bunde observed that the corridor is 10 miles
wide. Mr. Britt noted that federal and state route specific
right-a-ways have been granted and are in place. Decisions
will be made to see if the value of the current right-of-way
is sufficient for its use. Absence geological or technical
change the department feels that they can make good
estimates as to where the pipeline is likely to go.
Ms. McConnell interjected that the fieldwork can identify
possible problems in order to avoid them. Mr. Britt
interjected that the General Accounting Office recommended
that as much specific information be collected as possible.
The General Accounting Office found that one of the reasons
for cost overruns on the Trans-Alaska Pipeline System (TAPS)
was a lack of data during the design phase. He stressed that
data will help things move faster and cost less.
PAT GALVIN, DIRECTOR, DIVISION OF GOVERNMENTAL COORDINATION
(DGC), OFFICE OF THE GOVERNOR stated that his division is
responsible for implementation of the Alaska Coastal
Management Program (ACMP). He observed that DGC would
conduct a coordinated ACMP consistency review. He stressed
that answering questions before the project begins would
result in substantial minimization of delays during the
project. The State Pipeline Coordinator's Office will do
most of the coordination. The Division of Governmental
Coordination would hire a DGC liaison position, which would
be dedicated to the start up of the pipeline, coordination
of pre-application assistance, and the coordination of the
state's review. Cost and time associated with the permitting
process would be a major component. He stressed the need to
have staff available to help with the decisions. A number of
agencies have received invitations from producer groups to
participate in discussions regarding permitting, operations
and locations. He stressed the need for personnel to engage
in the discussions.
Co-Chair Mulder questioned why the current staff could not
handle the work. Mr. Galvin responded that the agency is
currently working at full capacity. He stressed that other
projects related to on-going projects would lose out. Ms.
McConnell added that it would be difficult to tell others
that their projects could not go forward because of pipeline
activity. Co-Chair Mulder stressed that it is a matter of
hierarchy and prioritization.
In response to a comment by Representative John Davies, Mr.
Galvin stated that one of the concerns with the Northern
route would be the impact of permitting and the large
hurdles that would have to be overcome.
REMOND HENDERSON, DIRECTOR, DIVISION OF ADMINISTRATIVE
SERVICES, DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT
observed that the department's request is $26.9 thousand
dollars. The department's mandate is to assure that there
are qualified Alaskan workers.
(TAPE CHANGE, HFC 01 - 29, SIDE 2)
Mr. Henderson added that the Department of Labor and
Workforce Development would conduct occupational supply and
demand analysis to identify potential workforce gaps. In
addition, the department would coordinate efforts to
maximize the employment of Alaska residents and to ensure
worker safety.
Vice-Chair Bunde questioned the rush. Mr. Henderson
explained that it takes time to correspond with industry
experts and gather and analyze data. He stressed that the
project could be delayed another year if the process is not
begun in April. An annual federal occupational employment
survey would be augmented. The survey begins in October.
Ms. McConnell added that a major issue in providing Alaskan
jobs is training. Jobs are not necessarily ones that can be
trained in a short time. The department needs to assure that
the training is available in Alaska. The Administration
anticipates that there would be significant workforce
shortages. Vice-Chair Bunde acknowledged the need for
qualified employees.
Representative Hudson asked if the positions are needed for
the balance of FY01 and for the full year of FY02. Ms.
McConnell agreed and added that the positions would be
located in the capital appropriation bill to reflect that
they will not be permanently needed.
KELLY NICOLELLO, ASSISTANT STATE FIRE MARSHAL, DIVISION OF
FIRE PREVENTION, DEPARTMENT OF NATURAL RESOURCES spoke in
support of the gas pipeline supplemental request. The
request would allow personnel to attend specialized
engineering training regarding the practices and development
criteria of natural gas pipeline production, distribution,
compression and refrigeration facilities. This would allow
the Division to respond to the applicant's requests for
building construction permits regarding the pipeline on an
equal footing, with greater speed and without a large
learning curve.
Mr. Nicolello observed that in the process of providing
building permit services for an applicant it is important to
develop product and process knowledge so hazards, past pit
falls and advancing technology can be ascertained, avoided,
implemented and understood. The state has experience in oil
pipeline and other hazardous processes but natural gas
pipelines and related facilities are a specialty area in
which there is limited experience. He noted that it is
important to be able to converse with engineers, designers,
operators and process control personnel when approving their
concepts and designs for construction. Training can help
eliminate a learning curve at the expense of project
approvals.
Mr. Nicolello pointed out that the division is being asked
informally, to comment on conceptual design elements.
Without approval of the request the division would be at a
disadvantage in pre-construction meetings and plan reviews,
once there is an applicant, until they can become educated
on the subject of natural gas pipeline design and
engineering principals.
KURT PARKAN, DEPUTY COMMISSIONER, DEPARTMENT OF
TRANSPORTATION AND PUBLIC FACILITIES explained that the
department's request would allow a Liaison/Engineer III
position to be hired. If the route goes along the highway
the Department of Transportation and Public Facilities would
need to be involved in permitting. The department would also
be involved in load issues relating to bridges.
Representative Croft stated that the requests presupposed a
specific route. He questioned how the route was chosen. He
maintained that the "cart was before the horse". He felt
that the route was chosen prematurely. Mr. Parkan stated
that if the route goes south that the highway would still be
involved. Portions of the highway system will be needed
regardless of which route is chosen.
Ms. McConnell recognized that there are still issues
regarding the full location of the route. She maintained
that most of the requests will be necessary regardless of
the route. Applications will need to be reviewed regardless
of the route.
Representative Croft noted that the Governor's backup states
that: "The Knowles-Ulmer administration is working
aggressively to develop Alaska's enormous North Slope
natural gas resources by advancing construction of an Alaska
Highway natural gas pipeline. This pipeline project is
designed to achieve the three principles most Alaskans agree
on when it comes to commercializing Alaska's gas." Ms.
McConnell responded that the Governor has indicated his
preference, but emphasized that many of the items need to go
forward.
Co-Chair Mulder reviewed changes to the legislation
contained in the proposed committee substitute. The original
section 1, Administration, Pioneer Homes, 195.0 was not
included. A new section 1 was added:
The sum of $1,500,000 is appropriated from the general
fund to the Department of Community and Economic
Development for payment as a grant under AS 37.05.316
to Arctic Power for education efforts to open the
coastal plain of the Arctic National Wildlife refuge
for oil and gas exploration and development.
Sections 2 and 3(a) remain the same. Sections 3(b) and 3(c)
were added to reappropriate funds to the Department of Fish
and Game for the expenses of Board of Fisheries meetings
regarding halibut subsistence.
Section 4(a) funding to the Office of the Governor,
Elections, for costs incurred to comply with the US Supreme
Court decision on closed statewide primary election held in
August 2000, was reduced from 252.2 to $100 thousand
dollars. Co-Chair Mulder noted that the issue is not dead
and would be revisited in the main supplemental. This is the
amount deemed necessary to carry operations until April 1st.
Sections 4(b) and 5 remain the same.
Section 6 Department of Law was deleted: Continuing costs
for prosecution of claims against Bank of America and other
affiliated banks, and for litigation related to the
allocation of public safety resources $240.0 thousand
dollars.
A new section 6 was added: The sum of $10,000 is
appropriated from the general fund to the Department of Law
for the costs associated with litigation regarding the 1997
tort reform legislation for the fiscal years ending June 30,
2001, and June 30, 2002.
Representative Croft questioned why funding for the Bank of
America litigation was removed. Co-Chair Mulder responded
that they wanted additional information on the request and
that it was not deemed to be time sensitive. He clarified
that items were deleted based on their time sensitive
nature.
There is a new section 7: The sum of $608,396 is
appropriated from the general fund to the Legislative
Council for the Redistricting Board for operations for the
fiscal year ending June 30, 2001.
The original section 7 was included as sections 8:
The sum of $500,000 is appropriated from the general
fund to the Department of Military and Veterans'
Affairs, office of the commissioner, for a grant under
AS 37.05.316 to 2001 Special Olympics World Winter
Games, Alaska for operating costs of those games during
the fiscal year ending June 30, 2001.
The old section 8 was deleted:
The sum of $600,000 is appropriated from the general
fund to the Department of Natural Resources, state
pipeline coordinator's office, for gas pipeline
development and related activities.
The appropriation in section 9 for $1,276,000 to the
Department of Revenue, Tax Division, for a tax assessment
challenge was divided between general funds and statutory
designated program receipts. Co-Chair Mulder noted that 90
percent of the additional value of the assessment would go
to the North Slope Borough. He stressed that it is
appropriate that the Borough share the cost of the
assessment.
Sections 10(a), 10(b), 11(1), 11(2), 11(3) and 11(4)
remained the same.
Section 11(5) was not included:
11(5) Transportation Capital Copper River Highway
work done under the Consent Agreement 400.0
DAN SPENCER, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,
DEPARTMENT OF ADMINISTRATION discussed the impact of the
failure to fund section 1. He explained that
reclassification takes place on March 1, 2001. The
reclassification is an attempt to address recruiting and
retention of employees. He acknowledged that the impact
would not be critical if the funding is in the slow track
supplemental. Positions will have to remain vacant. There
are 5 permanent full time positions, 11 on call positions
and 2 non-permanent positions that are vacant.
Co-Chair Mulder questioned if the legislature directed the
department to proceed with reclassification. Mr. Spencer
noted that the legislature did not direct the
reclassification. He stressed that there is an obligation to
provide nursing positions. Vacant skilled positions create a
ripple affect through the pioneer homes. He emphasized that
the state must ensure that qualified workers can be
attracted. He observed that beds cannot be filled without
sufficient nursing positions.
In response to a question by Representative Hudson, Mr.
Spencer noted that the reclassification would be affective
March 1, 2001. The reclassification would increase skilled
practitioners two grade levels, approximately 15 percent.
Representative Croft concluded that vacant positions would
be held open. Mr. Spencer noted that positions would be held
open or funding would have to be taken from another area.
Co-Chair Mulder questioned the cost of the reclassification
study.
SHARON BARTON, DIRECTOR OF PERSONNEL, DEPARTMENT OF
ADMINISTRATION clarified that the study was done by the
department at no additional cost. The study found that the
average private comparable position received approximately
$450 dollars more a month. Experienced nurses were being
paid $800 dollars a month more than nurses employed by the
state of Alaska. Many of the employers in the study were
about to increase wages.
Representative Hudson expressed concern for the protection
of life safety issues. Mr. Spencer stressed that risk in the
homes would not be increased. He noted that covering vacant
positions strains the staff. Vacancy would not cover the
entire cost.
Representative Hudson observed that failure to fund the
request would result in fewer new residents. Mr. Spencer
agreed that the department does not have enough staff to
fill all of the beds. He did not know if new beds would be
added if the positions were filled.
In response to a question by Co-Chair Mulder, Mr. Spencer
reiterated that 5 permanent full time positions are vacant.
Eleven on-call and 2 non-permanent positions are also open.
He did not know how successful the department would be in
filling them. He noted that the item could be funded at $150
thousand dollars to allow some margin of error. Ms. Barton
noted that the state would still be behind in wages offered
by private employers but emphasized that employees come to
the state for a variety of reasons. She added that the state
may be more successful in retaining employees at the higher
wage.
Vice-Chair Bunde referred to projects supported by passenger
facility charges (PFC). Mr. Parkan clarified that the PFC
generated approximately $850 thousand dollars at the
Fairbanks airport to cover the cost of projects. He
anticipated that collections would be $2 million dollars
annually at the two airports. Funds would be spent on
projects at the airports they were collected. Funds would
be used to cover a portion of the costs.
Co-Chair Mulder concluded that funds would go to Fairbanks
and be used for debt service. Vice-Chair Bunde clarified
that other funds would be used until sufficient PFC's were
collected.
Representative Hudson asked for more information on section
9(b).
MIKE MAHER, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,
DEPARTMENT OF REVENUE observed that the current air
condition unit in the computer room has failed on numerous
occasions. It overheats and has ruined some of the disk
drives. It currently has a new compressor. This is a
critical situation.
Co-Chair Mulder asked if he was referring to the PFD
application season. Mr. Maher agreed and noted that it would
st
end on March 31.
Co-Chair Mulder asked if this was a time sensitivity issue.
Mr. Maher replied that it would need to be done this year,
st
but not necessarily by April 1.
Representative John Davies asked for back up on the $1.5
million dollar request for Arctic Power.
Co-Chair Mulder thought that the $1.5 million dollars would
be matched by $500 thousand dollars for a total of $2
million dollars in state funds and $2 million dollars in
private sector funds. There would be a total of $4 million
dollars to work on the opening of ANWR. He maintained that
absent the request, ANWR would not be opened. Senator
Murkowski recommended that the state move forward
aggressively.
CAM TOOHEY, EXECUTIVE DIRECTOR, ARCTIC POWER stressed that
the funding would present an opportunity to develop Alaska's
energy potential. President Bush has supported moving
forward on opening ANWR. Congressional legislation is
expected to move.
(TAPE CHANGE, HFC 01 - 30, SIDE A)
Mr. Toohey stated that they would need help from Alaskans.
Representative John Davies asked for him to provide an
accounting of their budget.
Mr. Toohey observed that there is approximately $480
thousand dollars from a past appropriation. He maintained
that Arctic Power has promoted the state's effort.
JANET KOLASKI, DIRECTOR, DIVISION OF ELECTIONS, OFFICE OF
THE LIEUTENANT GOVERNOR discussed section 4(a). She noted
that the appropriation to run the primary and general
elections was exhausted. The department originally projected
an over expenditure for $400 thousand dollars. The request
was reduced to $252 thousand dollars. The additional
expenses were due to change in the primary law. The money
has been spent out of the operating budget. The result of
moving $150 thousand out of that budget would be a 10
percent reduction. She noted that employees would have to be
laid off in April. Offices would be closed by May.
LAURIE ALRED, BUSINESS MANAGER, DIVISION OF ELECTIONS
provided information on the legislation. She noted that
consolidation elections could run up to $100 thousand
dollars.
Representative Hudson asked the actual cost of the U.S.
Supreme Court's decision on closed primaries. Ms. Kolaski
replied that one of the big issues was the second ballot.
Computers had to be reprogrammed. Much of that work was done
out of the old rules, which were found to be
unconstitutional. This was an emergency situation.
In response to a question by Representative Croft, Ms.
Kolaski observed that they met with Lt. Governor Ulmer,
Senator Pearce and another member of the Finance Committee
before changing the primary ballot.
Vice-Chair Bunde questioned why the state is doing the local
election at Adak. Ms. Kolaski explained that the election
would result in the incorporation of Adak. Once Adak is
incorporated they would handle their own local elections.
The state would also conduct the Fairbanks election
concerning consolidation due to the conflict of interest
issue. She noted that the division also conducts the Rural
Education Attendance Area and Coastal Resource Service Area
elections.
Representative Croft referred to the legal case on the tax
assessment challenge. The proposed committee substitute
would shift 50 percent of the funding to statutory
designated program receipts from the North Slope Borough. He
questioned if the state has authority to take the funds from
the Borough.
Mr. Dickinson explained statutes charge the state with
assessing property. The property involved in the challenge
is in the North Slope Borough. Most of the property tax goes
to the Borough. There was a similar challenge in 1988. The
North Slope Borough provided much of the resources used for
the 1988 study. He noted that the Borough took over
performance of some audits in 1992. There is no cooperative
agreement to take over the project. The Borough has hired
consultants to bid out analysis, which was provided to the
department.
RICHARD MCMAHON, CHIEF, LANDS RECORDS, DEPARTMENT OF NATURAL
RESOURCES testified via teleconference. He observed that
they would work with the State Pipeline Coordinator's Office
(SPCO) and the commissioner to implement Administrative
Order 187. The major tasks are associated with land title
work, mapping, geologic data assessment, hydrologic
assessment, and archeological assessment. There is a request
for four positions that would start in FY01.
Mr. Britt continued discussing the responsibilities of the
State Pipeline Coordinator's Office. He noted that the
supplemental request would allow permitting authorities to
begin to prepare for receipt of a gas pipeline application.
With the jumpstart envisioned in the supplemental request,
the permitting agencies will receive better applications,
have more fundamental data when the applications arrive, and
be ready to move faster in approving the applications.
In FY 2001, the State Pipeline Coordinator's Office proposes
to begin implementing Administrative Order 187. The major
task associated with that implementation is the creation of
a Gas Pipeline Office (GPO) as an operating unit of the
SPCO. At the moment, the Federal-State Joint Pipeline Office
is the only operating unit of the SPCO. The GPO will provide
multi-agency one-stop permitting, authorization, and
oversight for a gas pipeline application comparable to that
provided by JPO for TAPS.
Mr. Britt observed that the main FY 2001 tasks associated
with the creation of a GPO are finding office space,
staffing the office, and creating the policy and procedure
that will allow participating state agencies to work
effectively together. The SPCO will provide the management
and administration for the GPO, and will perform land
management and engineering technical work in the office. The
office is proposing to hire at the end of FY 01: a deputy
SPC, an Administration Manager, a System Administrator, and
a Records Manager for the GPO. He stressed that staff
recruitment will be difficult, and he proposes to secure
assistance during FY 2001 to allow them to recruit
effectively during FY 2002.
Substantive work would occur during FY 2001. That work
includes:
- inventorying existing information
- creating consolidated plans to fill information gaps
- Creating a consolidated plan to collect information in
the summer of 2001
- working with federal and Canadian agencies to create
compatible processes
- working with project proponents to assure that
applications are complete
- engaging and informing the public
Mr. Britt clarified that the office would be located in
Anchorage. Travel would allow interaction with Canadian and
federal agencies. The goal would be to establish a
memorandum of understanding between the federal government,
Canadian government and state agencies so that requirements
would be compatible.
Representative Croft questioned if the SPCO would inventory
existing information on the highway route. Mr. Britt
explained that they do not have up to date information on
the Alaska Natural Gas Transportation System (ANGTS) highway
route. He noted that work with Yukon Pacific files continues
on an on-going basis and no additional funding is needed for
review of that data.
BILL VAN DYKE, LEASE ADMINISTRATION/ROYALTY, DIVISION OF OIL
AND GAS, DEPARTMENT OF NATURAL RESOURCES testified via
teleconference. He noted that the goal is to get information
in hand by year-end in anticipation of a gas pipeline
application. The Division would perform a variety of studies
on gas supply and in state gas demand: ANS Gas Pipeline
Study and Gas Pipeline Supply Side Study and In-state
Natural Gas Demand and ANS Gas Sales (Reservoir Studies).
KEN FREEMAN, SPECIAL ASSISTANCE, BUSINESS AND GAS LINE
DEVELOPMENT, OFFICE OF THE GOVERNOR provided information. He
noted that the Governor assigned him as staff for the
Highway Natural Gas Policy Council. The Council would look
at maximizing the benefits of the gas pipeline project and
seek public input. The budgetary items include staff
support, travel and expenses for council members and
contingency contract funds, which would pay for experts.
Representative Hudson questioned if the effort should be
centered in one office in Anchorage. Ms. McConnell clarified
that positions would be collocated on July 1, 2001.
JAN LEVY, SUPERVISING ATTORNEY, JUNEAU OIL GAS AND MINING
SECTION, DEPARTMENT OF LAW discussed the request by the
Department of Law. The department's request is for $203.7
thousand dollars to incorporate additional in-house and out-
house attorney time. The intent is to prevent future
challenges.
LARRY PERSILY, DEPUTY COMMISSIONER, DEPARTMENT OF REVENUE
observed that the department is asking for $75 thousand
dollars to allow them to do a good job collecting taxes. He
noted that the state has never dealt with a gas project of
this size.
Representative Croft MOVED to adopt Amendment #1:
Page 3, Line 22, insert a new section to read,
"DEPARTMENT OF ADMINSTRATION. The sum of $195,000 is
appropriated from the general fund to the Department of
Administration, division of Alaska longevity programs,
pioneers homes, for increased costs for nurses for the
fiscal year ending June 30,2001"
There being no OBJECTION, it was so ordered.
Co-Chair Mulder MOVED to ADOPT Amendment 2:
DEPARTMENT OF NATURAL RESOURCES The sum of $600,000 is
appropriated from the general fund to the Department of
Natural Resources, state pipeline coordinator's office,
for gas pipeline development and related activities.
There being NO OBJECTION, it was so ordered.
Representative Hudson MOVED to ADOPT Amendment 3:
The sum of $31,500 is appropriated from the general
fund to the Department of Revenue, administrative
services division, for emergency replacement of a
computer room air conditioner for the fiscal year
ending June 30, 2001.
Co-Chair Mulder suggested that the Department of Revenue
provide justification of overtime before presenting the
request to the other body.
There being NO OBJECTION, Amendment 3 was adopted.
Representative Foster MOVED to ADOPT proposed committee
substitute, work draft #22-GH1085|C. There being NO
OBJECTION, it was so ordered.
Representative Foster MOVED to report CSHB 117 (FIN) out of
Committee. There being NO OBJECTION, it was so ordered.
CSHB 117 (FIN) was REPORTED out of Committee with a "do
pass" recommendation.
ADJOURNMENT
The meeting was adjourned at 5:00 p.m.
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