Legislature(1993 - 1994)
04/09/1994 01:00 PM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
April 9, 1994
1:00 p.m.
TAPES
SFC-94, #65, Side 1 (000-end)
SFC-94, #65, Side 2 (end-000)
SFC-94, #67, Side 1 (000-250)
CALL TO ORDER
Senator Drue Pearce, Co-chair, reconvened the meeting at
approximately 1:00 p.m.
PRESENT
In addition to Co-chairs Pearce and Frank, Senators Rieger,
and Kelly were present. Senators Sharp, Kerttula, and Jacko
joined the meeting after it was in progress.
ALSO ATTENDING: Senator Suzanne Little; Commissioner Bruce
Campbell, Department of Transportation & Public Facilities;
Ron Lind, Director, Administrative Services, Department of
Transportation & Public Facilities; Roger Allington,
Planning Director, Department of Transportation & Public
Facilities; Helvi Sandvik, Deputy Commissioner, Department
of Transportation & Public Facilities; Larry Meyers,
Director, Income & Excise Audit Division, Department of
Revenue; Fred Fisher, fiscal analyst, Legislative Finance
Division; representatives of the media, aides to committee
members and other members of the legislature.
SUMMARY INFORMATION
SB 311: An Act authorizing a credit against the fishery
resource landing tax for certain contributions
made by taxpayers not harvesting fisheries
resources under a community development quota and
for contributions based on fishery resources not
harvested under a quota made by taxpayers
harvesting fisheries resources under a community
development quota, amending the manner of
calculating the amount available for revenue
sharing by operation of this credit, and
expediting agency review of the credit
applications under that tax; and providing for an
effective date.
Larry Meyers, Director, Income & Excise Audit
Division, Department of Revenue, spoke to SB 311.
Amendments 2 and 3 were ADOPTED. CSSB 311(FIN)
was REPORTED OUT of committee with a "do pass",
and a zero fiscal note for Department of Revenue.
SB 363: An Act making appropriations for capital project
matching grant funds and for capital projects; and
providing for an effective date.
Commissioner Bruce Campbell; Ron Lind, Director,
Administrative Services; Roger Allington, Planning
Director; Helvi Sandvik, Deputy Commissioner; all
from the Department of Transportation & Public
Facilities came before the committee for an
overview of the department's capital budget.
SENATE BILL NO. 363:
An Act making appropriations for capital project
matching grant funds and for capital projects; and
providing for an effective date.
Co-chair Pearce invited Commissioner Bruce Campbell; Ron
Lind, Director, Administrative Services; Roger Allington,
Planning Director; Helvi Sandvik, Deputy Commissioner; all
from the Department of Transportation & Public Facilities
(DOT&PF) to join the committee for an overview of the
department's capital budget.
COMMISSIONER BRUCE CAMPBELL said that he had given a
briefing a month ago and would not repeat that presentation.
He asked Co-chair Pearce how she would like him to proceed.
Co-chair Pearce asked for a review of the separate programs
and how those related to the seasonal requests,
authorizations and allocations. She noted that the
legislature was uncomfortable with the way some projects had
been authorized but never completed.
Mr. Campbell related that the time frame and cost of many
projects were determined by factors exterior to DOT&PF and
the state, and this made a realistic forecasting very
difficult. What had been done was a forecast for the next
two construction years to the best of the department's
ability. (He referred to the binders provided to the
committee.)
Discussion followed by Senators Rieger, Little, and Co-chair
Pearce regarding phases of authorization and the priorities
of various projects. Senator Rieger stated that he would
prefer projects listed individually. Co-chair Pearce agreed
that authorization would be done by individual project.
Mr. Campbell stated that if allocations were done by
project, the over-appropriation of $1.3 billion would not be
addressed, but would continue to grow. He said October 1 to
September 30 was the federal time period for authorization,
and, if a project was delayed, another one must be
authorized and available to fill that slot or federal funds
would be lost. Co-chair Pearce said she understood this
problem but there was not a consensus by the legislature to
give DOT&PF a single lump-sum appropriation. Mr. Campbell
offered the list for the next two years as DOT&PF's
limitation. He said he had no desire to pull a project out
of no where and substitute it for another. Co-chair Pearce
reiterated the legislature's desire to authorize specific
projects. Mr. Campbell said that short of lying to
legislature, it was not possible to project specifically
because of the complex process for projects.
In answer to Senator Rieger regarding the Minnesota
overpass, Mr. Campbell observed that there was some
misunderstanding but it had been planned only as a railroad
overpass.
Senator Sharp offered the suggestion that some projects
should be de-authorized and that would help clean up the
over-authorization of $1.3 billion. Mr. Campbell agreed
with that comment and said the department had phrased a
request in the budget to read "no appropriation of federal
funds" so the department would "live off" old
appropriations. He said the department was in the process
of analyzing all its projects but it would take time.
In reference to Commissioner Campbell's remark, ROGER
ALLINGTON said specific projects were not detailed as yet.
A list of the appropriations was complete but individual
allocations had not been identified. The department had
more work to do on that report. Commissioner Campbell
pointed out some projects went back to 1976.
Co-chair Pearce asked the committee to bring up any
questions as they went through information presented in the
binders.
HELVI SANDVIK, Deputy Commissioner, referred to the Corp. of
Engineers Program that showed an original request of $6.9M
reduced by the Governor's request to $3.2M. Since the
department's original request, the Corp of Engineers had
modified its expected program for 1995, reducing the match
needed. She expected $20M of matched funds for the Corp. of
Engineers. She said feasibility studies could not be done
at the $3.2M request level which was $800,000 short of
needed funds.
Discussion followed regarding match requirements on
projects. Mr. Allington said that historically, the state
had funded the match for municipalities but it did vary
depending on the project. Mr. Campbell added that a match
also could be met by in-kind or other work rather than cash.
In reference to Larson Bay, it was suggested that possibly
the land was donated or some similar reason accounted for
the low match. Several other projects were discussed.
In regard to the Sitka Harbor, Mr. Allington said the city
would have to come up with the additional money needed to
complete the project.
In regard to the Ketchikan shipyard, Ms. Sandvik said funds
requested would provide safety and environmental
improvements needed to keep the shipyard operational for the
short term. It did not include any management fees or money
for utilities. In the future, an additional investment
would need to be made to keep the shipyard available for
commercial use. Co-chair Pearce stated the Ketchikan
shipyard was a black hole. Mr. Campbell said the shipyard
was owned by the state and a contractual arrangement had
been made on a lease basis with TY-MATT, Inc. He hoped this
lease would be extended, but, if the commercial venture did
not work out, he would propose closing the shipyard.
Mr. Campbell said the Malaspina was in repair at the
Ketchikan shipyard. He felt the state had a vested interest
to keep the yard open while that work was completed. He
said the marine highway vessel maintenance was a higher
priority than keeping the Ketchikan shipyard open, and
decisions would be made after the budget was complete since
all areas of the department were being cut.
Senator Little strongly suggested funding the maintenance
budget rather than allocating funds to a shipyard that may
not stay open. Mr. Campbell said the shipyard was being
tried as a commercial venture and Ketchikan hoped it would
succeed for their local economy's sake. Senator Kerttula
suspected that if the state had not put the ferry in for
maintenance at the shipyard at a 25 percent increase in
cost, the shipyard would not have stayed open. Ms. Sandvik
quoted the current director of the Marine Highway System,
stating there was sufficient activity to support the
shipyard on its own and did not have to be dependent on the
Marine ferries. In answer to Senator Kerttula, Ms. Sandvik
believed that it cost approximately $80,000 more to service
the ferry in Ketchikan than down south. Mr. Campbell added
that the department was under tremendous pressure to keep
work in Alaska but did not appreciate criticism of that
decision when local hire did increase the cost to the state.
Discussion continued by Senators Rieger, Little, Kerttula,
Co-chair Pearce and Mr. Campbell regarding the Ketchikan
shipyard. Mr. Campbell pointed out that the other shipyard
used by the state was Seward and a certain offset was
allowed for local hire. It was noted that the Seward
shipyard only could service small vessels which only
included the Tustimena and Bartlett. The other ferries
would have to go south for maintenance if the Ketchikan
shipyard closed.
End SFC-93 #65, Side 1
Begin SFC-93 #65, Side 2
Ms. Sandvik agreed to provide more complete figures to the
committee regarding expenses by the Ketchikan shipyard.
Discussion then turned to Facilities Energy and Code
Upgrades which the Governor cut from $2.5M to $1.25M.
Senator Rieger requested a detailed list for the $2.5M. Ms.
Sandvik referred the committee to page 7 for a proposed
list.
In answer to Senator Rieger, Mr. Campbell said the state
office building elevator project had to do with providing a
safe exit on the 9th, 10th and 11th floor of the state
office building.
Ms. Sandvik explained the statewide advance project
definition for up-front work needed to determine project
feasibility was preparation of cost estimates, preliminary
environmental work, minor reconnaissance studies, and
definitions of project scopes. In answer to Co-chair
Pearce, she said she did not have a list of projects but one
example was a request by a community for a cross wind
runway.
Ms. Sandvik said that railroad planning would identify
potential local rail freight assistance projects. Under
this program, each state received $36,000 a year to identify
projects.
In answer to Co-chair Pearce, in regard to equipment fleet
replacement, Mr. Sandvik said that agency leases would show
up in the agency's budget. Co-chair Pearce asked for list
of all leased vehicles from the state equipment fleet.
Senator Kerttula thought an audit would be a good idea in
this area. Mr. Campbell said that some agencies could lease
without going through this program.
Ms. Sandvik said that a Federal Transit Administration
Grants appropriation allowed the department to apply for and
receive annual grants from the Federal Transit
Administration on behalf of local governments or private
non-profit groups engaged in transporting the elderly or
disabled. She noted that Anchorage received a direct grant.
Section 18 covered operating costs.
Ms. Sandvik said non-routine Maintenance Emergency Repairs
(agency requested $1M and the Governor allowed $.5M) funded
projects to replace DOT&PF facilities damaged by weather,
winter floods, etc. Co-chair Pearce requested the amount of
the balance left in that account. Senator Kerttula
suggested some kind of donation per employee to fund this
emergency fund.
Discussion followed on appropriations by region.
In regard to the Alaska Marine Highway System, Ms. Sandvik
said this appropriation would fund the repair or
replacement, preservation, and improvements of the systems,
ferries and terminals. Projects were identified for 1994
and 1995. Senator Kelly questioned the high price of a
baggage cart, $75,000. Ms. Sandvik agreed to provide
details. Discussion followed by Senator Sharp, Co-chairs
Pearce, and Frank regarding various projects and related
federal matching funds. It was noted by Commissioner
Campbell that routine maintenance was not eligible for
federal funds.
In answer to Senator Rieger, RON LIND explained that the
portion of the front section that said "reduction in
authority" referred to old remaining balances of matching
funds and to the match only. He went on to explain that a
lump sum appropriation would work better for the department
than the very complicated system in place now.
In answer to Senator Sharp, the Supreme Court decision on
the Dalton Highway had not been made as yet.
Discussion was had by Co-chair Frank, Mr. Allington, and
Commissioner Campbell regarding the roof on the Haines ferry
building, and the life span of roofs in general.
In answer to Co-chair Pearce, Commissioner Campbell said the
department had about $130M of remaining 1994 funds that
would partially fund the 1994 list. These funds plus new
funds would fund the construction list. He noted that ISTEA
carried more pressure than in prior years and six management
systems must be in place to qualify for federal funds. He
said that he was not able to tell the committee realistic
numbers for various projects because of all the factors
involved.
Co-chair Pearce announced that SB 363 would be HELD in
committee.
Recess 2:30pm
Reconvene 3:00pm
End SFC-93 #65, Side 2
Begin SFC-93 #67, Side 1
SENATE BILL NO. 311:
An Act authorizing a credit against the fishery
resource landing tax for certain contributions made by
taxpayers not harvesting fisheries resources under a
community development quota and for contributions based
on fishery resources not harvested under a quota made
by taxpayers harvesting fisheries resources under a
community development quota, amending the manner of
calculating the amount available for revenue sharing by
operation of this credit, and expediting agency review
of the credit applications under that tax; and
providing for an effective date.
Co-chair Pearce announced that SB 311 was before the
committee. She said that discussion had suggested limiting
the use of the tax credits for programs already in statute
and the new one added by SB 311. The credits would still be
available for training, scholarships, and awarding grants
for research projects which was the primary use of the
funds. She said this option was contained in amendment 2 if
anyone wished to offer it.
Senator Sharp MOVED amendment 2. Senator Jacko noted that
it was commendable to get people involved with the fisheries
by training and scholarships but there was much more to
commercial fishing than scrubbing a deck. Allowing the
money to be used for other options like processing projects
would be beneficial even though it was not a large amount of
money.
Co-chair Pearce was opposed to non-profit groups receiving
state dollars for a tax credit and then, in turn, loaning
out those tax dollars and receiving interest on that money.
She said there were loan programs already in existence.
Senator Jacko said there were many needs in this area.
Co-chair Pearce called for a show of hands and amendment 2
was ADOPTED on a vote of 3 to 1 (Co-chairs Pearce, Frank and
Senator Sharp were in support. Senator Jacko was opposed.).
Co-chair Pearce invited Larry Meyers to join the members at
the table to speak to amendment 3.
LARRY MEYERS, Director, Income & Excise Audit Division,
Department of Revenue, said SB 311 provided a public hearing
to grant a credit. The department proposed all language be
deleted in Section 1, page 2, line 5-11, and replace with
the wording in amendment 3.
Senator Jacko MOVED amendment 3. No objection being heard,
it was ADOPTED.
Senator Jacko MOVED for passage of CSSB 311(FIN) from
committee with individual recommendations. No objection
being heard, it was REPORTED OUT of committee with a "do
pass," and a zero fiscal note for the Department of Revenue.
Co-chairs Pearce, Frank, Senators Kelly and Jacko signed "do
pass." Senator Sharp signed "no recommendation."
ADJOURNMENT
The meeting was adjourned at approximately 3:30 p.m.
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