Legislature(2013 - 2014)HOUSE FINANCE 519
01/30/2013 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB65 || HB66 | |
| Fy 14 Governor's Budget Overview: Department of Fish and Game | |
| Fy 14 Governor's Budget Overview: Department of Military and Veterans Affairs | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 65 | TELECONFERENCED | |
| += | HB 66 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
January 30, 2013
1:31 p.m.
1:31:32 PM
CALL TO ORDER
Co-Chair Austerman called the House Finance Committee
meeting to order at 1:31 p.m.
MEMBERS PRESENT
Representative Alan Austerman, Co-Chair
Representative Bill Stoltze, Co-Chair
Representative Mark Neuman, Vice-Chair
Representative Mia Costello
Representative Bryce Edgmon
Representative Les Gara
Representative Lindsey Holmes
Representative Scott Kawasaki, Alternate
Representative Cathy Munoz
Representative Steve Thompson
Representative Tammie Wilson
MEMBERS ABSENT
Representative David Guttenberg
ALSO PRESENT
Cora Campbell, Commissioner, Department of Fish and Game;
Kevin Brooks, Deputy Commissioner, Department of Fish and
Game; Major General Thomas H. Katkus, Commissioner,
Department of Military and Veterans Affairs; McHugh Pierre,
Deputy Commissioner, Department of Military and Veterans
Affairs; Craig Campbell, President and Chief Executive
Officer, Alaska Aerospace Corporation, Department of
Military and Veterans Affairs.
SUMMARY
FY 14 GOVERNOR'S BUDGET OVERVIEWS:
Department of Fish and Game
Department of Military and Veterans Affairs
HB 65 APPROP: OPERATING BUDGET/LOANS/FUNDS
HB 65 was HEARD and HELD in committee for further
consideration.
HB 66 APPROP: MENTAL HEALTH BUDGET
HB 66 was HEARD and HELD in committee for further
consideration.
HOUSE BILL NO. 65
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs, capitalizing funds, amending
appropriations, and making reappropriations; and
providing for an effective date."
HOUSE BILL NO. 66
"An Act making appropriations for the operating and
capital expenses of the state's integrated
comprehensive mental health program; and providing for
an effective date."
1:32:26 PM
^FY 14 GOVERNOR'S BUDGET OVERVIEW: DEPARTMENT OF FISH AND
GAME
CORA CAMPBELL, COMMISSIONER, DEPARTMENT OF FISH AND GAME
(DFG), introduced department staff. She provided a
PowerPoint presentation titled "Alaska Department of Fish
and Game Overview" dated January 30, 2013 (copy on file).
She pointed to the department's mission statement on slide
2; slide 3 included statutory sections the mission
statement had been derived from. She highlighted the
department's six core services on slide 4: (1) harvest
management, which was measured by commercial harvests, the
purchase of hunting and fishing licenses, angler days, and
user success; (2) stock assessment, which was measured by
whether or not escapement goals were met and the completion
of wildlife surveys; (3) customer service was measured
primarily through angler-skills and hunter heritage
programs, wildlife education, and information provided to
the public; (4) public involvement was aimed at ensuring
that the public participated in the Board of Fish and Board
of Game regulatory processes and that the public was
involved in decisions made by DFG; (5) state sovereignty,
included the department's participation in federal land
management planning processes, its support of the
Department of Law (DOL) in lawsuits (e.g. DFG involvement
in processes such as the Endangered Species Act, listings
decisions, and the Federal Subsistence Board); (6) habitat
protection, which was measured by ensuring that developers
were in compliance with DFG permits issued through its
Division of Habitat.
Commissioner Campbell pointed to several graphs on harvest
management (slide 5) as an example of metrics DFG used to
measure performance including sport fishing licenses sold,
hunting and trapping sales, and value of commercial
harvest. She turned to an organizational chart on slide 6
that showed the department's six divisions, one section,
and two independent agencies that were attached to the
department for administrative purposes. Slide 7 included a
map of the department's permanent statewide offices; the
map did not include the numerous seasonal locations.
Commissioner Campbell discussed that the Commissioner's
Office accounted for approximately 1 percent of the
department's operating budget. There were three large
management divisions including Commercial Fisheries, Sport
Fisheries, and Wildlife Conservation. The Division of
Commercial Fisheries was the largest and accounted for
approximately 34 percent of the DFG operating budget; it
was responsible for the management of commercial fisheries
and many personal-use and subsistence fisheries throughout
the state, in addition to the permitting of aquaculture and
mariculture operations. The Division of Sport Fish
accounted for approximately 23 percent of the DFG operating
budget (slide 10); it was responsible for managing the
state's sport fisheries, the operation of the state's two
sport hatcheries (located in Anchorage and Fairbanks), and
for providing boater and angler access.
1:37:32 PM
Commissioner Campbell continued with her overview of the
department's divisions (slide 11). The Division of Wildlife
Conservation was responsible for managing wildlife
populations, hunter opportunity, and three shooting ranges;
it also provided a number of hunter education and safety
programs. The Subsistence Division accounted for 4 percent
of the DFG operating budget and was responsible for
conducting research to document Alaskans' customary and
traditional use of fish and wildlife resources. The
division provided the information to decision makers,
particularly to the Board of Fish and Board of Game. The
Habitat Division was accounted for 3 percent of the total
budget and was primarily a permitting office for activities
in anadromous waters, other fish bearing waters, and in
legislatively designated special areas (slide 13). The
Administrative Services Division accounted for 6 percent of
the budget and was responsible for accounting, budget,
procurement, human resources, and other (slide 14). The
Boards Support Section made up 1 percent of the DFG budget
and primarily provided logistical support to the Board of
Fish and Board of Game processes.
1:39:15 PM
Co-Chair Stoltze asked about the status of various
questions he had listed in a DFG subcommittee meeting.
Commissioner Campbell replied that the department was
working on the questions and would follow up.
Commissioner Campbell highlighted the department's two
independent agencies including the Commercial Fisheries
Entry Commission and the Exxon Valdez Oil Spill Trustee
Council (slide 16). She moved to slide 17 that showed the
FY 14 budget by division and fund source. She reiterated
her earlier testimony that the three large management
divisions accounted for the bulk of the department's
budget. Primary fund sources included the general fund,
federal funds, and the Fish and Game Fund. She turned to
slide 18 that showed FY 14 budgeted positions. There were
933 full-time and 1,719 total positions; DFG had a large
number of seasonal and part-time employees due to seasonal
fieldwork.
KEVIN BROOKS, DEPUTY COMMISSIONER, DEPARTMENT OF FISH AND
GAME, relayed that slides 19 through 22 had been prepared
by the Legislative Finance Division. Slide 19 included a
bar chart that depicted General Fund (GF) growth from FY 05
through FY 14; the DFG budget had increased by
approximately $50 million during the time period and had
remained at approximately 1.7 percent of the state's total
agency budget. He explained that approximately half of the
department's growth was due contractual increases resulting
from salaries negotiated with collective bargaining units,
health insurance increases, and other. The other half of
the growth was made up of initiatives requested by the
governor (29 percent) and by the legislature (16 percent).
1:42:52 PM
Mr. Brooks moved to slide 20, which showed the relative
share of DFG budget fund sources; the FY 14 request totaled
approximately $215 million. He noted that federal funds had
increased in dollar amount, but their overall budget share
had decreased from 40 percent down to 30 percent whereas;
the GF share had grown from 20 percent to approximately 40
percent. He discussed that the divisions of Sport Fish and
Wildlife Conservation had not historically received GF;
however, due to cost increases the budget request included
approximately $7 million in GF for each division (the total
budget for Sport Fish was $50 million and the Wildlife
Conservation budget was $45 million). He directed attention
a line chart showing look at budget growth from FY 05 to FY
23. The green line showed the continuation of (9.6 percent)
annual growth out to FY 23.
Mr. Brooks communicated that the dotted black line showed
the department's projection with an inflation rate of 2.75
percent on non-personal services. He explained that the
department's projection did not include any estimated
growth on personal services because future cost of living
allowances (COLA) were unknown. He elaborated that COLA
increases accounted for a significant portion of growth in
personal services. He noted that COLA would most
appropriately be done on a statewide level. The
department's estimate also included a potential loss of $1
million per year in federal funds in the upcoming three
years; DFG would need replacement funds. He discussed that
there were numerous federally funded projects the
department ended when funds were no longer available;
however, some core functions were supported by federal
funds. He relayed that one of the FY 14 budget requests was
to replace federal funds that were ending for one of the
department's core management projects. Based on historical
data from the past 10 years the department's projection
included $1.6 million in potential growth to account for
any governor or legislative initiatives.
1:46:48 PM
Mr. Brooks briefly highlighted slide 22, which included a
line chart representing continued budget growth (all
funds). He noted that compared to slide 21, a much tighter
convergence existed between the department's projection
(dotted black line) and the continuation of 4.3 percent in
annual growth (green line).
Commissioner Campbell looked at FY 13 department
accomplishments on slide 23; the list included some items
the department had requested funding for in the past. She
discussed improvements to information available as a result
of salmon research. The most notable improvement was the
completion of the Western Alaska Salmon Stock
Identification Program, which was the largest genetic stock
identification program DFG had undertaken. She expounded
that nine reports had resulted from the program for use by
the Board of Fish to aid in its decision making process.
She noted that the salmon research program had also been
improved in other areas of the state. Another program
supported by the legislature in the past was the DFG
intensive management programs. The programs were currently
being implemented in various game management units;
subsequently, increases had been seen in caribou and moose
populations that were available for harvest. She believed
the programs were beneficial for Alaskans. She highlighted
that the programs continued to be reviewed through the
Board of Game process on a regular basis to ensure their
effectiveness.
Commissioner Campbell communicated that in 2012 an
appropriation had been made to assist subsistence harvest
surveys. She explained that the Subsistence Division had
been dealing with customary and traditional harvest data
that was decades old. The department was working with the
Department of Transportation and Public Facilities (DOT)
and the Department of Natural Resources (DNR) when
development projects or road proposals required subsistence
data for permitting decisions. The department's involvement
allowed for the updating of its database for use by the
Board of Fish and Board of Game in determining amounts
necessary for subsistence and simultaneously expediting the
permitting process for some development projects. She
relayed that the division had made significant progress in
surveying various communities that had not been surveyed in
many years.
Commissioner Campbell continued to discuss FY 13
accomplishments on slide 23. She pointed to past funding
for the Habitat Division used to keep up with permit
requests and to enable the division's involvement in the
pre-permitting design phase to make the process smooth
going forward. She relayed that the Fairbanks and Anchorage
sport fish hatcheries were producing fish, restocking them
into lakes and streams, and providing angler opportunity at
the historic levels that existed prior to the loss of heat
from the old Elmendorf facility. She shared that DFG was
happy with improvements in the size and quality of fish
produced in the hatcheries.
1:51:10 PM
Commissioner Campbell addressed current issues and
challenges (slide 24). She spoke to Chinook salmon
abundance and productivity and the hardship that low
returns and resulting fishery restrictions had caused
throughout the state. Subsequently, DFG had spent
considerable time and resources developing a Chinook salmon
research plan; the plan implementation was included in the
DFG FY 14 capital budget request. She detailed that the
plan targeted 12 indicator stocks throughout the state and
included juvenile and adult stock work, increased coated
wire tagging, genetics work, and biometric support in order
to help DFG determine causes for low populations. She
communicated that the plan implementation was the
department's largest capital request and one of its largest
priorities (to ensure that the research program was robust
and comprehensive).
Commissioner Campbell continued to discuss issues and
challenges on slide 24. She highlighted the second item
"increased fishing and economic opportunities." She
detailed that due to the department's absorption of cost
increases or the existence of inflationary pressures it may
not have the resources to conduct a stock assessment that
was as complete as it would like; the scenario could lead
to more conservative management and a loss of opportunity.
Subsequently, DFG had been looking for areas where a small
investment could result in a large increase in opportunity
for Alaskans. Some of the items had been funded in FY 13
and others were included in the FY 14 request, specifically
in the salmon fisheries. Additional funding would help DFG
to increase its understanding of how much salmon was
available to harvest and the ability to provide
opportunity. She spoke to the state's need to dedicate time
and resources protecting its authority to manage fish and
wildlife. She referred to a number of Endangered Species
Act (ESA) issues facing the department and the staff
resources needed to engage in the various processes. She
relayed that the department had received funding in the
past that was targeted at helping to increase research on
stocks that were future endangered species candidates; the
goal was to bring state science to the table to inform the
decision making. She added that DFG worked closely with DOL
on the issues. She stated that DOL had been successful on
some ESA issues; however, DFG had tremendous concern that
federal agencies were listing healthy, stable animal
populations with no immediate threat in the near future.
She relayed that the agencies were using future data that
speculated on climate impacts that would affect animals.
She believed that listing species based on speculation of
what could happen in the future was not a very high bar; in
some cases the federal government asserted control over a
species that had been managed by the state or over lands
that may be designated as critical habitat.
1:56:13 PM
Commissioner Campbell discussed that DFG had been spending
an increased amount of time on invasive species (slide 24).
The department had active programs working to eradicate
various invasive species including the tunicate in Whiting
Harbor near Sitka and Pike in Southcentral; it was working
on prevention rather than reacting when a species was
detected. The department also recognized that Alaska was
very fortunate in the number of invasive species it was
dealing with in comparison to other states. She noted the
need for licensing modernization, which was reflected in
the department's capital budget request. Paper was
primarily used in the antiquated licensing system. The
department sold approximately 700,000 hunting, fishing, and
trapping licenses annually; all of the reporting from
vendors was paper reporting, which included a tremendous
amount of data entry. The goal was to develop tools to
allow for online reporting for personal-use harvests,
electronic logbooks, and other.
Commissioner Campbell moved to slide 25 to discuss
highlights in the FY 14 operating budget. She explained
that DFG had to react to shifts in the availability of
federal funds. She elaborated that when federal funds were
discontinued DFG looked carefully at projects to determine
their necessity and whether they fell under its core
mission. In some cases core services were federally funded
including the Southeast salmon management programs (an
operating budget request had been made for FY 14 due to a
decline in the federal funds of these programs). She
relayed that the Division of Sport Fish relied heavily on
federal funding and income from license sales; non-resident
license sales had decreased in recent years, but the trend
was beginning to flatten most likely due to economic
recovery in the Lower 48. A decline in federal funding had
also impacted the division; therefore, DFG proposed
shifting the Aquatic Resources Project to GF. She detailed
that the project benefited many Alaskans far beyond the
recreational angling sector; the project included water
reservations to protect fish in the event of proposals for
water withdrawal from streams.
Commissioner Campbell continued to provide an overview of
slide 25. She addressed that the Division of Wildlife
Conservation relied heavily on federal funding derived from
excise taxes on sales of guns and ammunition; due to an
increase in sales there was significantly more funding
available than in the past. The division was hoping to
access the funds to work on scientific programs, biometric
support, and education programs. She noted that the $2.5
million listed on the slide was comprised of $500,000 in GF
that would leverage $2 million in federal funds. Federal
funds under the Forest Resources Practices Act and the
Alaska Coastal Management Program (ACMP) [ACMP ended on
July 1, 2011] had been reduced for the Division of Habitat;
therefore, GF funding was needed for work on Title 16 and
41 pre-project reviews and permitting (the funding had been
included as a one-time increment the prior year). She
discussed additional salmon projects where DFG believed
additional knowledge would lead to increased opportunity
and a better understanding of stocks; GF funding for each
of the state's regions had been requested.
Commissioner Campbell reviewed FY 14 capital project
requests on slide 26. She noted new projects she had
previously mentioned including the Chinook Salmon
Initiative, the sport fishing in Alaska survey, and
licensing modernization. Another new request was for aerial
photo census equipment; the program was one of the Division
of Wildlife's main tools for caribou stock assessment. The
division could no longer get film for its 10-year old
camera that the program relied on. She relayed that a
digital system would improve the division's ability to
analyze photographs. She pointed the department's funding
request to conduct an economic impact sport fishing study
for the 2012 fishing year. The previous study had been done
in 2007; the study had been designed to reoccur every five
years in order to track trends over time. She touched on
recurring capital projects including sport fish
recreational boating access; deferred maintenance (part of
the governor's 5-year deferred maintenance plan); and
repair and upgrades to facilities, vessels, and aircrafts.
2:04:34 PM
Co-Chair Austerman requested information that provided a
basic look at the department's core services, federal funds
provided for each of the services, and a historical look
showing how the items had been funded. Commissioner
Campbell agreed to provide the information.
Representative Costello noted that the department's rate of
growth was approximately twice the rate of growth shown by
other departments. She pointed to slide 21 and observed
that under the current rate of growth the rate would have
quadrupled from FY 05 to FY 23. She added that the figures
did not include salary increases. She discussed the need to
keep the budget growth to approximately 1 percent. She
asked about the department's plan to arrest the
department's rate of growth moving forward.
Commissioner Campbell answered that there was a very
different picture prior to 2005, which she believed was
true for a number of departments; there had not been much
budget growth in prior years. She explained that prior to
2005, oil prices had been low and there had been pressure
on budgets; therefore, some of the department's core
responsibilities were shifted to federal funds. She
believed there had been an over reliance on federal funding
for core state responsibilities. The department made an
effort to weed out projects for elimination when federal
funds were no longer available. Another factor in the
growth rate related to GF funds requested for the Division
of Wildlife. The funds were necessary in part because the
administration, legislature, and public had an interest in
the department doing intensive wildlife management; the
management programs could not be completed with federal
funding. She opined that some of the growth would not occur
in the future because a portion of it was due to the
funding of items that had not been funded in the past. She
touched on work that was underway to increase hunter and
angler license sales in order to help the department become
self-supporting with the funds. She relayed that DFG was
applying a careful, internal test before requesting a back-
fill in federal funds.
2:09:05 PM
Mr. Brooks agreed that it was significant to note that FY
05 was the last year of flat budgets. He elaborated that
the decade had been one of growth and that different
environments dictated different decisions by the department
and legislature. He believed that going back an additional
ten years prior to FY 05 would change the dynamic and
potentially the discussion. He stated that ultimately it
came down to the department's responsibility to closely
review projects it proposed to the legislature for funding.
Representative Costello asked Commissioner Campbell to give
the department a letter grade for its overall activity,
river and commercial fish management, and management of
game.
Commissioner Campbell commented on the potential limitation
of a letter grading system for understanding the subtleties
of performance. She believed that the department was doing
very well in its success on the wildlife side; it had
increased heard sizes relied upon by Alaskans, additional
opportunity was provided, and it was spending significant
resources to increase hunter recruitment and retention. She
believed that it was more difficult to talk about the
management of fisheries as a success subsequent to the past
fishing season. She remarked that it was important to
recognize that DFG was not solely responsible for every
aspect of salmon abundance; many times the department had
to react to what was put before it related to management
challenges. She did not believe that Alaskans would be as
happy if they were asked to grade the department on
fisheries management given increased restrictions that had
been implemented the prior season. She opined that DFG
biologists were doing the best they could to protect the
resource while balancing the need to provide opportunity.
Representative Costello guessed that the department's
overall grade was perhaps an average of B-. She pointed to
the department's capital request for Chinook salmon
research; she struggled with the idea of funding core
services with capital appropriations. She offered to
discuss the issue at a later time.
Commissioner Campbell answered that there were a blend of
projects in the Chinook salmon research plan. Some of the
projects were short-term; however, at the end of the 5-year
plan DFG may decide that others have value for continuation
in the long-term. In the future there may be a request for
the continuation of the long-term value projects in the
operating budget.
2:13:13 PM
Co-Chair Stoltze wondered whether the department would
categorize its performance as outstanding, satisfactory, or
needs improvement. He noted that DFG was asking for large
increments and should be able to assess itself.
Commissioner Campbell replied that the department had done
an outstanding job on wildlife management. She believed DFG
had done a satisfactory job in fisheries management related
to its reaction to the prior fishing season.
Co-Chair Stoltze asked whether the department had any areas
that fell under the "needs improvement" category.
Commissioner Campbell replied that there were areas the
department had identified that needed improvement. She
added that DFG had worked to identify the areas in its
budget process and the need to address them going forward.
Co-Chair Stoltze asked how the economic impact study for
sport fish would be used if funding was provided. He
wondered whether the study would influence improved
economic related decisions by the department and the Board
of Fish.
Commissioner Campbell responded that the study would be
used in a variety of ways. Economics was one of the
criteria considered by the Board of Fish when making
decisions. Additionally, DFG used the study for planning
purposes for stocking and enhancement programs; the study
showed the department where the angler interest was located
and where angler activity would contribute to the economy
if opportunity was boosted.
Co-Chair Stoltze asked whether economic impact and economic
benefit should have a greater role in allocation decisions.
Commissioner Campbell answered that the issue was one of
the criteria considered by the boards. She believed that
different weight was placed on the criteria based on the
circumstance.
2:16:43 PM
Representative Kawasaki referred to the prior ACMP and
asked if a particular GF increment for the Division of
Habitat was related to assuming responsibility for some
activities that had occurred under the previous program.
Commissioner Campbell replied that DFG had received
documents from DNR for some of the work that went along
with permitting projects in Alaska's coastal zone. She
detailed that the process was slightly different; however,
the work remained for DFG, which explained the funding
increment.
Representative Kawasaki was happy that the Fairbanks
hatchery had begun producing fish. He discussed an original
plan to use heated wastewater from the power plant, which
had not worked out. The facility was currently using oil
heat and he wondered whether the operational cost was
reflected in the budget. Commissioner Campbell replied that
the sport fish budget included a separate component to
easily identify the hatchery operating costs. She
elaborated that there was not an increment in the FY 14
budget to account for increased operating costs. She
offered to provide the information.
Representative Kawasaki affirmed his interest in receiving
the budget information regarding hatchery operating costs.
Vice-Chair Neuman pointed to the 9.6 percent budget growth
rate on slide 21. He understood that a growth rate of 3
percent to 4 percent was inevitable due to contractual
obligations and inflation. He read the department's core
mission statement from slide 2:
To protect, maintain, and improve the fish, game, and
aquatic plant resources of the state, and manage their
uses and development in the best interest of the
economy and the well-being of the people of the state,
consistent with the sustained yield principle.
Vice-Chair Neuman recognized that fish was a difficult area
to manage and that the state did not have control of what
went on in the ocean. He wondered whether the state had
increased the total allowable harvest of game from 2005.
Commissioner Campbell replied that she had not looked at
the issue on an aggregate basis since 2005. She did believe
there was an increased hunting opportunity available for
Alaskans at present as a result of the department's
activities. She pointed to the South Alaska Peninsula
caribou heard that had been shut down in the past; the
department had removed some predators in the area and the
heard increased by 50 percent. Subsequently, the area had
been reopened to hunters. She pointed to other elevated
harvest levels that accounted for 27 percent of the total
statewide harvest. She expressed confidence that the
programs had resulted in increased hunting opportunities.
Vice-Chair Neuman asked for verification that Commissioner
Campbell believed there was currently more game harvested
[than in 2005]. Commissioner Campbell replied that she
would have to look at total harvests from 2005 compared to
current harvests. She strongly believed there was more game
harvest currently based on the department's intensive
management.
Vice-Chair Neuman asked about areas that could use
improvement. He believed the intensive management was a
significant factor in the increased harvest of game. He
noted that the harvest of moose had declined for many
Alaskans. He was interested in management decisions made by
the department.
Commissioner Campbell replied that some of the management
programs were reviewed and refined by the Board of Game on
an annual basis. She pointed to Title 16(b), where wolf and
bear control provisions were located and noted that even
though the moose population was getting close to
objectives, harvest objectives were not being met. She
relayed that a discussion regarding how to refine and
improve the program would take place at the upcoming Board
of Game meeting. The department was in the process of
implementing additional work on habitat improvement
projects to increase moose availability.
2:24:55 PM
Vice-Chair Neuman He wondered whether economics should be
addressed when measuring how allocations were appropriated.
He pointed back to the DFG mission statement. He discussed
whether economics should play a larger part in management
decisions made by the board. He addressed the interest of
Alaska's economy and relayed that Mat-Su had seen a
decrease in revenue of over $100 million due to the lack of
salmon; it had been devastating to the community, Kenai,
and other locations.
Commissioner Campbell replied that DFG did consider
economics in its decision making and in its budget process.
She elaborated that the department was currently looking at
areas where economic opportunity could be increased through
better decision making. She detailed that better
information would enable the department to make more
informed decisions in order to increase economic
opportunity. She elaborated that DFG worked within the
allocation and management plan adopted by the board, but it
still had the responsibility and opportunity to consider
the economics of fisheries it managed.
Vice-Chair Neuman restated Commissioner Campbell's
statement that the department did have the opportunity [to
consider economics in DFG decision making process].
Representative Gara referred to slide 26 and addressed
concern about dwindling stocks of King salmon statewide.
The numbers were down in the Yukon, Kodiak, Southcentral,
and other. He wondered whether the $10 million requested
for the Chinook Salmon Initiative would provide answers
about why the state was in danger of losing the wild
fishery in all areas or in particular areas.
Commissioner Campbell responded in the affirmative. The
plan was designed to provide answers about why the
predicament existed. She detailed that the initiative and
research plan focused on 12 stocks throughout the state
(from Southeast to the Yukon). She communicated the
proposed increment would fund smolt out-migration work,
which would provide a sense of what was going into the
marine environment. The work was critical to understanding
whether the productivity problem was related to something
occurring in freshwater (i.e. conditions, habitat,
predators, or other) or something related to survival in
the marine environment.
2:29:21 PM
Representative Gara wanted to ensure streams would not be
left out. He noted that the Mat-Su area had been devastated
and asked whether it along with the Susitna and Kenai
Peninsula streams were covered under the research plan.
Commissioner Campbell responded that the plan included work
on the Yukon, Kuskokwim, Chignik, Kodiak areas; and the
Susitna drainage, Kenai Peninsula, Copper River, and
Southeast.
Representative Gara asked what the department could do if
the initiative pointed to high seas interception of salmon.
Commissioner Campbell responded that it depended on whether
the mortality was in domestic federal water fisheries
between 3 and 200 miles, beyond 200 miles, or as a result
of illegal fishing. In any of the cases DFG had a mechanism
to address the issues. She was a member of the North
Pacific Fishery Management Council, which managed the
fisheries from 3 to 200 miles; the position allowed her to
influence what occurred in federal fisheries. She added
that the department was involved in a number of
international bodies that negotiated on items such as high
seas driftnet enforcement with other Pacific Rim countries.
Additionally, there was an international commission that
discussed management of Pollock fisheries (Pollock stock
crossed the Alaska/Russian border). She relayed that the
department had some ability to influence enforcement on the
high seas and was involved in scientific exchange to
understand activity taking place outside of the 200-mile
border.
2:31:37 PM
Representative Gara thought that the answers for the
initiative would take time. He stated that it was known
that King salmon were being intercepted and dumped dead
back into the water on the high seas level. He wondered
whether DFG would be able to provide the number of King
salmon that were intercepted and the locations the practice
was occurring. He asked for confirmation that the fish were
thrown overboard.
Commissioner Campbell answered that the department the
information for domestic fisheries (3 to 200 mile from
shore range) and would provide it. She had been working on
implementing caps and controls on bycatch in fisheries that
had none (e.g. the Gulf of Alaska fisheries had no limits
on Chinook salmon bycatch). The issue had been a major
focus the North Pacific Fishery Management Council had been
working on. She would provide information on areas where
limits had been put in place versus areas the council was
working to implement a limit.
2:32:58 PM
Representative Edgmon asked for comment on ocean
acidification. He appreciated the commissioner's concise
presentation. Additionally, he thanked the commissioner for
her role in getting the Board of Fish out to Bristol Bay.
He believed it was important for the Board of Fish and
Board of Game to have a presence in outlying regions.
Commissioner Campbell responded that ocean acidification
was of great concern to the fishing industry in Alaska. She
detailed that specific concern related to how a change in
the ocean's pH levels could impact shell-forming organisms
and primary prey species for salmon. She communicated that
the University of Alaska had taken the lead in developing
research to monitor Alaska's ocean acidity levels that
would provide baseline information and early detection of
potentially harmful trends. She relayed that DFG had a
cooperative relationship with the Alaska Ocean Observing
System that provided sea conditions and some of the
information.
Representative Wilson pointed to DFG testimony that hunting
opportunities had increased. She wondered why the guide
concession program was needed and why DFG should not be
running it because it was about the number of animals and
not necessarily the land. She understood the issue was
complicated.
Commissioner Campbell answered that the development of the
guide concession program had been primarily through DNR
because it was related to access and use of state lands;
however, the effort had been cooperative between DNR and
DFG. She agreed that a critical component of the program
was related to wildlife harvest. She elaborated that DFG
had been involved in the development of the program as it
related to harvest opportunities and impacts on wildlife.
She stated that although heard sizes and hunting
opportunity had increased, every conflict that existed had
not been eliminated. She noted that there were areas where
there was not enough harvest opportunity for both resident
and non-resident hunters. The Board of Game had determined
that if there was not a program developed to regulate the
guide industry and opportunity, an alternative way to limit
non-resident hunting opportunity would need to be devised.
The reaction from the guide industry was that alternative
options could be extremely destabilizing (e.g. reliance on
a draw permit or other). The department was working to
support the process where it could.
Co-Chair Stoltze asked members to take advantage of working
with the co-chairs offices on issues they would like to see
addressed.
2:38:35 PM
AT EASE
2:41:26 PM
RECONVENED
^FY 14 GOVERNOR'S BUDGET OVERVIEW: DEPARTMENT OF MILITARY
AND VETERANS AFFAIRS
2:41:39 PM
MAJOR GENERAL THOMAS H. KATKUS, COMMISSIONER, DEPARTMENT OF
MILITARY AND VETERANS AFFAIRS (DMVA), introduced his staff.
MCHUGH PIERRE, DEPUTY COMMISSIONER, DEPARTMENT OF MILITARY
AND VETERANS AFFAIRS, communicated that planned to share a
video related to department activities.
Commissioner Katkus added that the video had been put
together by young members of the military. The video titled
"2012 Year in Review" was shown.
2:53:44 PM
Commissioner Katkus provided a PowerPoint presentation
titled "Alaska Department of Military and Veterans Affairs
FY 2014 Overview" dated January 30, 2013 (copy on file). He
shared the department's mission (slide 2):
To provide military forces to accomplish military
missions in the state or around the world; provide
homeland security and defense; emergency response;
veterans services; and youth military style training
and education.
Commissioner Katkus pointed to the department's Core
Services (slide 3):
· Defend and Protect Alaska and the United States
· Disaster Preparedness/Response and Recovery
· Youth Intervention
· Outreach to Veterans and Military Families
Commissioner Katkus discussed measures and results on
slides 4 and 5. He shared that the department had met all
of its state and federal emergency response requirements
for training and deployments. He discussed a significant
number of at-risk youths who had graduated from the
military youth academy; the graph on slide 4 showed a
graduating class of approximately 300 students in 2012. He
detailed that benefits outweighed the program cost, given
that many of the youths could have ended up in the state's
correctional system. He believed the program had been and
continued to be very successful. He spoke to the one-time
benefit payments for the state's veterans. He expounded
that veterans were hard to track in Alaska because many
felt that their need for services was not as great as
others. The department continued its efforts to register
every veteran, which drove additional federal resources for
veteran support. He touched on the department's outreach
programs to register veterans with the help of veterans
service officers and community volunteers; he pointed to
the significant increase in paid benefits from 2005 to 2012
(slide 5).
Commissioner Katkus addressed the department's general fund
budget on slide 6. He shared that the DMVA budget accounted
for 0.44 percent of the state's overall budget. He pointed
to all of the actions shown in the video that represented
work funded by state dollars.
2:57:46 PM
Commissioner Katkus moved on to discuss the department's
budget by fund and source (slide 7). He directed attention
to the left chart and noted that the general fund (GF) was
the only fund source that had grown in the past two years.
He explained that the GF increase had resulted from the
department's new oversight of the Alaska Aerospace
Corporation (AAC). The graphs on the right showed a
breakout of the AAC budget and the department's budget
without AAC, which illustrated that without AAC the DMVA
general fund budget had remained consistent over time. He
emphasized that DMVA had not expanded its programs. He
believed the department used its general funds very well.
Commissioner Katkus turned to the department's 10-year plan
(slide 8).
Mr. Pierre added that the projection on slide 8 pertained
to the DMVA 10-year plan for all funds.
Commissioner Katkus continued to discuss slide 8. He
pointed to large federal funding increases projected for
future projects including a USPFO [United States Property
and Fiscal Office] facility that would capture all control
of federal equipment coming into the state, AAC projects,
and the Fairbanks Armory. He relayed that the department's
current level of service would remain constant. He
addressed the 10-year plan general funds projection on
slide 9. He pointed out that potential GF increases would
occur to match federal funds if facilities were constructed
in the future.
Commissioner Katkus pointed to priority issues on slide 10:
· Federal Funding and Sequestration
· Base Realignment and Closure (BRAC)
· Alaska Military Youth Academy Formula Funding
· Alaska Aerospace Corporation Contracts
· Fairbanks Cemetery Land
Commissioner Katkus elaborated that federal sequestration
was the department's highest priority; it was working to
evaluate how sequestration would impact the state and how
the DMVA would continue with its programs. He believed it
would be very manageable for the state.
3:01:24 PM
Co-Chair Austerman looked at the chart's gray line on slide
8 reflecting the current level of service plus initiative.
He surmised that the data partially incorporated ongoing
AAC development. Commissioner Katkus agreed that the line
included the projected anticipated development of AAC.
Co-Chair Austerman remarked that he did not see the same
growth pattern reflected on slide 9. He believed there were
anticipated GF requests and expenditures for AAC in the
next few years.
CRAIG CAMPBELL, PRESIDENT AND CHIEF EXECUTIVE OFFICER,
ALASKA AEROSPACE CORPORATION, DEPARTMENT OF MILITARY AND
VETERANS AFFAIRS, looked at the top right chart on slide 7,
which included the $8 million AAC request from the prior
year and the current year. Subsequent slides showed the
peak that DMVA was required to cover, which was created by
the addition of AAC to the department. He explained that
the addition of AAC skewed the DMVA chart.
Mr. Pierre added that DMVA was doing its best to reflect
match requirements of GF to the projects on slides 8 and 9.
He elaborated that goal was to show the anticipated [GF]
spending that would be required in addition to the total
federal and outside partner money. He relayed that the
projected spending may change as AAC pursued the third
launch pad for the medium lift rocket capability; if a
change occurred DMVA would provide the legislature with
updated information.
Mr. Campbell noted that the bottom line on slide 8
represented an AAC project baseline. He stated that $25
million had been allocated the prior year, but only $1
million had been spent to date; AAC was waiting on contract
agreements with Lockheed Martin. The gray peaks represented
projected funds for the USPFO and Fairbanks Armory.
3:04:43 PM
Co-Chair Austerman remarked that the $25 million was a one-
time expenditure. He did not believe the figure should be
continued across the chart from FY 13 to FY 23. Mr. Pierre
replied that the figure was reflected in the fiscal year
the department anticipated on spending the funds.
Co-Chair Austerman asked if DMVA anticipated spending the
$25 million until FY 23. Mr. Pierre replied in the
affirmative.
Commissioner Katkus communicated that slide 8 showed a
projected 10-year plan for all funds (including federal)
whereas, slide 9 showed the data for GF only.
Co-Chair Austerman asked for verification that that the
gray line on slide 9 did not include the $8 million
requested increment for AAC. Mr. Pierre responded in the
affirmative. The $8 million was not in the long-term
spending plan and was not included in the long-term
projection. He pointed to slide 9 and noted that projected
GF decreased slightly as a result; however, moving farther
out into the future the gray line increased due to large
projects on the horizon.
Representative Kawasaki asked if data used in the graph on
slide 9 had come from the Office of Management and Budget
(OMB). Mr. Pierre responded in the affirmative.
Representative Kawasaki referred to a meeting he had
attended earlier in the day on the AAC that had addressed
anticipated future contracts and potential federal funds
supplanting GF in the future. He did not believe the OMB
10-year projection included the data.
Mr. Campbell replied that the AAC data provided to OMB
reflected $8 million in GF for FY 14, $6 million in FY 15,
$4 million in FY 16, and $2 million in FY 17. The declining
funding requests were based on a projection for increased
contracts and other incoming revenues. The request
flattened to $2 million at the 5-year point due to
anticipated launches and potential federal matching funds.
He was comfortable with the 5-year projection, whereas the
following 5-year period was less clear.
3:08:59 PM
Representative Kawasaki noted that the graph he had
received in the budget subcommittee was zeroed out after FY
17. Mr. Pierre replied that the chart received in
subcommittee may not reflect the most recent information.
He relayed that the department would provide additional
detail on AAC to the budget subcommittee on February 18,
2013.
Representative Kawasaki asked about the $75,000 request for
maintenance and operation of the Fairbanks Cemetery. He
wondered about the status of the cemetery and whether it
was open.
Mr. Pierre responded that money had been included in the
DMVA capital budget request that would allow for the
purchase of land for the cemetery. The department had
worked to get the land donated and had worked with the
Department of Natural Resources, the University of Alaska,
and private citizens. He explained that 32 out of 34 core
samples taken from the land the department anticipated
using had shown permafrost; therefore, the land was not
usable. The goal was to find approximately 100 acres;
Veterans Affairs (VA) required the land to be larger than
40 acres. The department had reached the point where
purchasing land was the option; it had posted a request for
information (RFI) on properties available for sale and
pricing. The FY 14 capital budget request was $2.5 million
and DMVA anticipated the total land cost to be $3 million.
Once the budget increment had been approved DMVA
anticipated posting a request for proposal in July; once
the land was entitled the VA would provide the funds to
build and the cemetery would open in the last quarter of FY
14. The $75,000 reflected operations for the final quarter
of FY 14. The department believed it would cost $300,000
annually to maintain and operate the cemetery.
Representative Kawasaki referred to the $2.5 million
capital budget request for the purchase of land. He asked
about who owned the land and what its current value was.
3:11:56 PM
Mr. Pierre replied that the department did not know. He
elaborated that there had been multiple responses to the
RFI that had ranged from $800,000 to $15 million depending
on the location and the size of the property. The
department believed it was best to work with the community,
the Interior delegation, and with relator input. The
department hoped to procure least 100 acres to fulfill its
promise to veterans in the Interior region of Alaska.
Representative Gara recognized the importance AAC had for
the community of Kodiak; however, he was concerned about
the corporation. He asked for the total capital and
operating funds that had been appropriated to AAC in FY 13.
Mr. Campbell replied that the FY 13 budget included $8
million in the operating budget for operations and
sustainment of the Kodiak launch complex and AAC for one
year. Additionally, the legislature had funded the
governor's $25 million capital request for the development
of a new medium-lift launch pad. The funding included
several criteria specifying that the corporation could
spend no more than $3 million until a firm launch schedule
was obtained from a customer (Lockheed Martin was expected
to be the customer), once the launch dates were established
AAC could spend $10 million to begin the engineering design
for the facility and it could move forward on a financing
package (the total launch complex would cost approximately
$125 million), once the additional 100 million was secured
the corporation could use the remaining $12 million for the
construction of the complex.
3:14:17 PM
Representative Gara wondered whether AAC would submit
capital funding requests in addition to the operating
requests Mr. Campbell previously mentioned.
Mr. Campbell answered that AAC had a capital request of
approximately $185,000 for the rebuilding of a weather
station and slightly under $1 million for the corporation's
deferred maintenance backlog, which totaled approximately
$4 million to $5 million.
Representative Gara asked for the current total operational
cost for the facility (state GF and non-GF funds) and the
income that had been generated.
Mr. Campbell answered that AAC had no launches scheduled
and no contracts in the current or prior year; the
corporation needed the state's support during the two-year
period while it changed its business development plan and
acquired new customers. He elaborated that the Kodiak
launch complex had been built 15 years earlier; there had
been 16 launches and the state had provided between $30
million and $35 million in support. Additionally, AAC had
received $145 million to $150 million in federal funds to
build the complex and $140 million to $150 million in
launch revenues.
Mr. Campbell summarized that AAC had received slightly
under $300 million against the approximate $30 million
contributed by the state. He expounded that the corporation
had become complacent and relied on working with the
Missile Defense Agency (MDA) between 2006 and 2009; the
agency had been the corporation's only customer and had
paid all of the bills. As a result, AAC had not marketed to
other customers. Subsequently, when MDA moved its program
to the Pacific, AAC had no other customer base. He
explained that AAC had then requested state funds in 2010;
it took two years to prepare for a launch; therefore, the
corporation knew it would have no launch contracts for two
years. He acknowledged that the onus was on the
corporation. The corporation had asked for two annual
appropriations of $8 million; requests would begin
declining the following year, given AAC's aggressive
business development. He shared that the corporation was
actively working with the space and missile defense command
(U.S. Army command) and was close to signing a contract for
a 2014 launch. Additionally, AAC was working with Lockheed
Martin (in the past the company had told the legislature it
had selected Kodiak as a launch site), which was close to
completing contract work on a small launch in late 2014.
The corporation was working with the U.S. Air Force and
other agencies and believed it would have three to four
launches per year in the future. He reiterated that as
revenues increased due to launches, the corporation would
reduce state funding requests. He relayed that the
corporation was confident it would not need $8 million the
next year; fund sources were shifting away from the state
and back to the private sector.
3:18:34 PM
Co-Chair Austerman asked for detailed information about the
$25 million request. He wondered about contracts that were
in progress with Lockheed Martin or other.
Mr. Campbell replied that the $25 million capital
appropriation the prior year had been for the medium launch
lift (launch pad 3), which had been designed to meet a
potential customer need to launch larger rockets (twice the
size of the rockets launched at the small lift); the
facility was not yet available. He elaborated that Lockheed
Martin had been the first customer to approach AAC; it was
working on a medium-lift program called Athena III. The
company had hoped that AAC would begin construction during
the current year, but AAC was waiting to spend money on the
launch pad until the customer contract and launch dates
were secured. The corporation had allocated a portion of
the $25 million to an environmental assessment and
permitting; it was also looking at the initial medium-lift
design. He furthered that AAC had been working with
Lockheed Martin on what its rocket requirements would be.
The plan was to spend less than $1 million of the $25
million until Lockheed Martin provided its launch schedule.
He communicated that another company had visited AAC and
was interested in a medium-lift launch. The company was
currently in the process of an East Coast launch scheduled
to occur in the spring (Antares rocket); it would also need
a West Coast launch location and AAC anticipated that the
company would visit to discuss using the Kodiak facility.
He added that AAC wanted to optimize the launch complex in
order to meet the needs of all customers. He relayed that
AAC was slowing down on spending in the current year in
anticipation of customer agreements and schedules; it would
move forward with the full design and construction
beginning in the following year.
3:21:05 PM
Co-Chair Austerman asked if the corporation had a time
commitment from Lockheed Martin. Mr. Campbell responded in
the negative.
Representative Gara asked for verification that the
corporation did not have any firm customers. Mr. Campbell
replied that AAC had a federal government customer that
would launch in August 2014. Kodiak had been identified for
small U.S. Air Force launch missions by Lockheed Martin and
Orbital Sciences between 2013 and 2017. The missions had
not been scheduled, but the $1 billion contract had been
awarded to Lockheed Martin and Orbital Sciences; Kodiak
would be the launch site. He noted that the difference
between AAC and a federal agency was that the corporation
was working with private companies (e.g. Lockheed Martin,
Orbital Sciences, Northrop Grumman, Aerojet, and other),
which involved a multiagency plan (AAC, rocket builders,
satellite builder, and a private or government customer).
The corporation looked at the overall program, which in the
current case was $1 billion for small and medium launches
in a five-year period; the program had selected Lockheed
Martin and Orbital Sciences, which had selected Kodiak as
the launch site. He stressed that the plans to launch in
Kodiak were real, but he did not know specifics on which
missions would occur or at what time they would take place.
3:23:28 PM
Representative Gara pointed to the two $8 million
expenditures in the past two years with zero launches. He
asked for the anticipated net revenue for the government
launch in 2014 and what was expected out of the Lockheed
Martin launches. He wondered whether the legislature would
continue to subsidize the corporation when the launches
occurred.
Mr. Campbell replied that the $8 million was needed to
operate and sustain the launch complex and AAC. He
reiterated his earlier testimony that the onus was on the
corporation for not obtaining another customer when MDA
left. The company was building launches and would have a
launch in 2014. He relayed that when the corporation
reached four launches per year it would no longer need
operation sustainment funds from the state. He discussed a
chart the corporation would provide at the February 18
budget subcommittee meeting, which showed the costs per
year. The corporation charged approximately $4 million for
a small launch and $6 million for a medium launch depending
on the needs of the mission. Four launches would bring in
$16 million; half of the money would go towards contractors
and purchased services and the other half would go to the
corporation's workforce and operations.
Representative Munoz asked how launching out of Kodiak
would be more advantageous to a company than launching in a
Lower 48 location. Mr. Campbell discussed East and West
coast launches and relayed that the U.S. only conducted
launches over water. Approximately 60 percent of the
launches were equatorial and were conducted on the East
Coast. Kodiak did not conduct equatorial launches;
therefore it did not compete with the East Coast. West
Coast launches were polar; AAC's only competitor on the
West Coast was the Vandenberg Air Force base in California.
He detailed that the base was federally controlled and had
a high operational cost. The Kodiak site was owned by AAC
had a lower cost of operations. He explained that the owner
could determine the launch priority; the federally
controlled site prioritized government launches over
commercial launches. He stressed that the Kodiak facility
allowed customers to sign a contract to designate the
timeframe of their choice; the method provided customers
with great flexibility and assurance that their launch
would occur at the time they specified.
3:27:53 PM
Representative Munoz asked whether the companies would
locate any permanent employees in the Kodiak region. Mr.
Campbell replied in the affirmative. He elaborated that
Lockheed Martin wanted to develop an aerospace
infrastructure in Alaska. He shared that AAC had partnered
with Lockheed Martin on a contract for Fort Greely four
years earlier; Lockheed Martin had planned to relocate
approximately 150 full-time employees to Alaska; however,
they had not been awarded the contract. Lockheed Martin
wanted to develop a center of excellence in aerospace in
Alaska, which could include light manufacturing, teaming
with the University of Alaska, and workforce development
training. Lockheed Martin had held a suppliers conference
in Anchorage the prior year to determine how to best
support its projects in the Alaska. The corporation was
encouraging companies interested in contracting with AAC to
look at ways that would increase aerospace employment in
Alaska; Lockheed Martin had been forthright in its
interest.
3:30:02 PM
Representative Kawasaki referred to his earlier comment and
corrected that he did see the decline in undesignated GF
funds after the next couple of years. He asked about polar
orbiting and wondered if the corporation would compete on
an international level.
Mr. Campbell replied that the U.S. had priced itself out of
the commercial market in many cases. He elaborated that
most of the truly commercial launches originated in French
Guyana and Russia. He noted that U.S. companies
manufacturing satellites purchased services overseas
because it was cheaper. He explained that Kodiak could
begin lowering launch costs and increasing its
competitiveness in order to attract more of the U.S.
commercial market.
HB 65 was HEARD and HELD in committee for further
consideration.
HB 66 was HEARD and HELD in committee for further
consideration.
Co-Chair Austerman discussed the schedule for the following
day.
ADJOURNMENT
3:31:50 PM
The meeting was adjourned at 3:31 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Sponsor Statement HB30.pdf |
HFIN 1/30/2013 1:30:00 PM |
HB 30 |
| HB 30 Sectional PDF.PDF |
HFIN 1/30/2013 1:30:00 PM |
HB 30 |
| HB 30 FN Attachment.pdf |
HFIN 1/30/2013 1:30:00 PM |
HB 30 |
| HB 30-FN-Leg Audit 1-28-13.pdf |
HFIN 1/30/2013 1:30:00 PM |
HB 30 |
| HB 30-FN-Leg Finance 1-28-13.pdf |
HFIN 1/30/2013 1:30:00 PM |
HB 30 |
| HB030 FN-GOV-OMB-01-25-13.pdf |
HFIN 1/30/2013 1:30:00 PM |
HB 30 |
| HB 30 Sunset in Texas.PDF |
HFIN 1/30/2013 1:30:00 PM |
HB 30 |
| DMVA FY2014 Department Overview_1.30.13.pdf |
HFIN 1/30/2013 1:30:00 PM |
DMVA Overview |
| DFG-HFIN Committee Overview FY2014.pdf |
HFIN 1/30/2013 1:30:00 PM |
DFG HFIN Overview |