Legislature(2015 - 2016)SENATE FINANCE 532
04/10/2015 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB71 | |
| HB140 | |
| SB70 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 140 | TELECONFERENCED | |
| + | SB 70 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 71 | TELECONFERENCED | |
SENATE FINANCE COMMITTEE
April 10, 2015
9:04 a.m.
9:04:16 AM
CALL TO ORDER
Co-Chair MacKinnon called the Senate Finance Committee
meeting to order at 9:04 a.m.
MEMBERS PRESENT
Senator Anna MacKinnon, Co-Chair
Senator Pete Kelly, Co-Chair
Senator Peter Micciche, Vice-Chair
Senator Click Bishop
Senator Mike Dunleavy
Senator Lyman Hoffman
Senator Donny Olson
MEMBERS ABSENT
None
ALSO PRESENT
Senator Cathy Giessel, Sponsor; Representative Steve
Thompson, Sponsor; Bill O'Leary, CEO, Alaska Railroad; Ben
Ellis, Director, Division of Parks and Recreation,
Department of Natural Resources; John Hutchins, Attorney,
Department of Law.
PRESENT VIA TELECONFERENCE
Chad Hope, Pharmacist, Department of Health and Social
Services, Anchorage; Don Perrin, Director, Pipeline
Coordination Office, Department of Natural Resources; Frank
Richards, Manager of Pipeline Engineering and Government
Affairs Alaska Gasline Development Corporation.
SUMMARY
SB 70 GAS PIPELINE RIGHT-OF-WAY;PARKS;REFUGES
SB 70 was HEARD and HELD in committee for further
consideration.
SB 71 VACCINE CERTIFICATION FOR PHARMACISTS
SB 71 was REPORTED out of committee with a "do
pass" recommendation and with one new zero fiscal
note from Department of Health and Social
Services, and a previously published zero fiscal
note: FN1 (CED).
HB 140 LEG. APPROVAL: AK RAILROAD REVENUE BONDS
HB 140 was HEARD and HELD in committee for
further consideration.
SENATE BILL NO. 71
"An Act relating to the practice of pharmacy; and
relating to the administration of vaccines and related
emergency medications."
9:05:44 AM
Co-Chair MacKinnon read the title of the legislation.
SENATOR CATHY GIESSEL, SPONSOR, stated that she had no
closing comments, and stated that there were individuals
waiting to discuss the fiscal notes.
9:06:26 AM
AT EASE
9:07:19 AM
RECONVENED
9:07:25 AM
Vice-Chair Micciche stated that there was a fiscal note
from Department of Health and Social Services (DHSS), with
an appropriation for Health Care Services, and allocation
for Medical Assistance Administration with an OMB component
number of 242. He stated that the fiscal impact was zero
from FY 16 through FY 21. There was no estimated capital or
supplemental costs. The fiscal note previously had a
requested amount, but DHSS determined that it could absorb
any anticipated operating costs within the department.
CHAD HOPE, PHARMACIST, DEPARTMENT OF HEALTH AND SOCIAL
SERVICES, ANCHORAGE (via teleconference), stated that he
was available for questions related to the fiscal note.
Senator Dunleavy asked for an explanation of the fiscal
note.
9:09:08 AM
AT EASE
9:09:24 AM
RECONVENED
Senator Dunleavy wondered if the fiscal note was a zero
fiscal note. Co-Chair MacKinnon replied in the affirmative.
Co-Chair MacKinnon asked why and how the fiscal note became
a zero fiscal note. Mr. Hope replied that the bill required
DHSS to enroll pharmacists as providers, as required under
the Affordable Care Act. Initially the work would enhance
the system at approximately $50,000, but DHSS would not
incur additional money. The department would use Children's
Health Insurance Program (CHIP) money to offset additional
costs associated with enrolling a new type of provider.
Co-Chair MacKinnon wondered if there would be anticipated
CHIP revenue for future years. Mr. Hope replied that that
he did not know about the CHIP funding. He furthered that
the system implementation was a one-time process. There
would not be ongoing future enhancements to that system.
Vice-Chair Micciche looked at the next fiscal note from the
Department of Commerce, Community and Economic Development
(DCCED), with an appropriation and allocation for
Corporations, Business, and Professional Licensing. The
appropriation request was for $2,500 in FY 16, and zero
request for FY 17 through FY 21.
Vice-Chair Micciche MOVED to REPORT SB 71 out of committee
with individual recommendations and the accompanying fiscal
notes. There being NO OBJECTION, it was so ordered.
SB 71 was REPORTED out of committee with a "do pass"
recommendation and with one new zero fiscal note from
Department of Health and Social Services, and a previously
published zero fiscal note: FN 1(CED).
9:13:43 AM
AT EASE
9:15:46 AM
RECONVENED
HOUSE BILL NO. 140
"An Act authorizing the Alaska Railroad Corporation to
issue revenue bonds to finance a positive train
control rail transportation safety project that
qualifies for federal financial participation; and
providing for an effective date."
9:16:11 AM
REPRESENTATIVE STEVE THOMPSON, SPONSOR, introduced the
legislation. He explained that HB 140 will authorize the
Alaska Railroad Corporation (ARRC) to issue up to $37
million in tax-exempt bonds backed by Federal Transit
Administration (FTA) formula funds received annually by
ARRC. Bond proceeds will be used to finance Positive Train
Control (PTC): a safety program mandated by the federal
government without any correlating funding, which is
estimated to cost ARRC approximately $158 million. ARRC
proposes to refinance $66 million in existing bonds and
extend the repayment date in order to issue an additional
$37 million in bonds to pay for a major portion of the
remaining $55 million in PTC costs. Under AS.42.40.285 ARRC
is required to receive legislative approval to issue bonds.
In no event will the general credit of the State of Alaska
or ARRC be pledged for the repayment of these bonds.
AS.42.40.500 requires that all liabilities incurred by ARRC
shall be satisfied "exclusively" from the assets or revenue
of ARRC and not the State. Debt payment for the bonds will
come from a portion of Federal Transit Administration (FTA)
formula funds which are statutorily mandated by Federal law
and received annually by ARRC. Issuing debt backed by FTA
formula funds is authorized through FTA regulation and has
already been used by ARRC to issue bonds. PTC is technology
designed to stop or slow a train before human-error causes
an accident to occur. In 2008, the federal Rail Safety
Improvement Act required certain railroads to install a
fully functional PTC system by the end of 2015; by virtue
of its passenger service, ARRC is subject to this
requirement. A failure to implement PTC will force ARRC to
severely curtail or eliminate passenger service and/or face
severe fines for non-compliance. Estimates for this large
research and development project indicate that it will cost
approximately $158 million to implement. Since 1997, ARRC
has invested $68.9 million to develop a PTC system. In 2013
and 2014, ARRC received an additional $19.1 million and $15
million respectively from the State of Alaska to continue
work on PTC. Between 2016 and 2018, an additional $55
million will be required for ARRC to complete the
development and installation of PTC by 2018. This figure
does not include the estimated $5 million to $7 million per
year of operating and capital maintenance costs related to
the system that ARRC will fund after PTC is installed.
Vice-Chair Micciche shared that he was not in support of
PTC, but understood that the state did not have a choice.
He expressed support for the legislation.
Senator Dunleavy appreciated the legislation.
Co-Chair MacKinnon CLOSED public testimony.
9:21:36 AM
Senator Hoffman wondered how much unutilized land was owned
by the Alaska Railroad.
BILL O'LEARY, CEO, ALASKA RAILROAD, explained that there
was roughly 36,000 acres of land owned by the corporation.
Approximately 18,000 acres of that land was used directly
in rail operations, such as right-of-way. Therefore, there
was a remaining 18,000 acres available for other use. He
recalled that there was approximately 2600 acres that were
under lease or permit.
Senator Hoffman queried the future plans of the remaining
15,000 acres. Mr. O'Leary replied that there was a hope to
develop the unused land. There were some plans in
Fairbanks, Anchorage, and Seward with the hopes to move
forward.
Senator Hoffman wondered if the undeveloped acres would be
available to create jobs to incur investment. Mr. O'Leary
replied that it was of great concern to the corporation,
and was a part of the financial picture. He stated that
there was a hope to utilize the railroad land.
Senator Hoffman queried the corporation's position on
selling any of the land. Mr. O'Leary replied that the
corporation was not often interested in selling the land,
because the ownership of the land was a key piece in the
financial structure.
Senator Hoffman wondered if the corporation would sell the
land upon threat of closing the railroad operations, as
they are with the PTC federal requirement. Mr. O'Leary
responded that the corporation was not in favor of selling
the land, because of the possibility of the need for
continuous revenue stream. He felt that the selling of the
land would not produce enough funds in the short time that
the funds were needed for the project.
Senator Hoffman surmised that the railroad would rather
close down operations, than sell the land to keep the
railroad operating. Mr. O'Leary disagreed.
Vice-Chair Micciche shared that he was supporting the bill,
because the state would not have bond liability. He asked
for further explanation of the bond. Mr. O'Leary replied
that the debts to the Alaska Railroad were not liabilities
of the state. There would be no recourse to the state for
the bond, as was explicitly outlined in the bond documents.
There was also no recourse to the general credit of the
Alaska Railroad. The only security for the bonds, as
proposed, was from the Federal Transit Administration
formula funding.
HB 140 was HEARD and HELD in committee for further
consideration.
SENATE BILL NO. 70
"An Act relating to exceptions from designation as a
special purpose site under art. VIII, sec. 7 of the
Constitution of the State of Alaska for portions of
Denali State Park, Captain Cook State Recreation Area,
Nancy Lake State Recreation Area, and Willow Creek
State Recreation Area to allow leasing a right-of-way
for a natural gas pipeline."
9:29:09 AM
Co-Chair MacKinnon addressed the legislation.
BEN ELLIS, DIRECTOR, DIVISION OF PARKS AND RECREATION,
DEPARTMENT OF NATURAL RESOURCES, explained the legislation.
He looked at the SB 70 Briefing Paper (copy on file):
SB 70 is necessary to open a corridor through four
state legislatively designated areas (Denali State
Park and Willow Creek, Nancy Lake, and Captain Cook
State Recreation Areas) to the right of way leasing
act for the purpose of construction a natural gas
pipeline from the North Slope of Alaska.
The bill would accomplish the following primary
objectives:
1) Authorize the issuance of a right of way lease
under AS38.35, the Pipeline Right of Way Leasing
Act for a gas pipeline in an identified corridor
through Denali State Park and Willow Creek, Nancy
Lake, and Captain Cook State Recreation Areas.
2) Require the corridor to be managed as parkland
and recreation areas until leased under 38.35 and
returned to original park and recreation area
management upon termination of the lease.
3) Provides supplemental requirements to reserve
traditional means of public access and minimize
the impact of a pipeline on the specific values
of park and recreation areas.
4) Clarifies the DNR Commissioner's power to
delegate condemnation authority to the lessee
does not apply within the bounds of the park and
recreation areas.
5) Requires the gas pipeline lease be issued
before January 1, 2020
Why the bill is needed:
The parks at issue are special use sites,
reserved from the public domain by the
legislature pursuant to Article VIII, Sec. 7 of
the Alaska Constitution. As a result, they are
not, without legislative action, open for leasing
under AS 38.35.
Why this bill does not include State game refuges and
DNR Susitna Basin Rec Rivers:
Although some restrictions on multiple use are
imposed on the state game refuges and rivers,
these areas are not closed to leasing under AS
38.35 where a lease would be compatible with the
purposes of the reserves.
Does the corridor specified in the bill suffice for
both the ASAP and AKLNG Projects:
AGDC and AKLNG have worked cooperatively to
select a common alignment for both projects. AGDC
has completed its route revision to the common
alignment and are now calling it Rev. 6.1. Field
efforts for both projects have changed to reflect
the common alignment as evidenced in the geo-
technical site locations currently being
conducted within Denali State Park.
9:35:06 AM
Senator Dunleavy wondered if the proposed parcels were
within the parks, or were any outside of the parks. Mr.
Ellis replied that each proposed parcel within the bill
were in one of the four parks mentioned. He stated that a
portion would go outside of the park, but was not included
in the legislation.
Vice-Chair Micciche asked for assurance that, other than
during the construction, the public use was previously
permitted and the park corridors would not be interrupted
in the future. Mr. Ellis replied that the land would remain
park land, and available for public use under park statutes
during the early phase. The pipeline construction would
still allow some recreational usage.
Vice-Chair Micciche remarked that the right-of-way may
improve recreational access.
9:38:02 AM
AT EASE
9:40:21 AM
RECONVENED
9:40:25 AM
Senator Dunleavy wondered if it was advisable to require
that the right-of-way leases had definable and enforceable
obligation for restoration and revegetation. Mr. Ellis
replied that the intention was to fully return to the state
prior to any land disturbance.
JOHN HUTCHINS, ATTORNEY, DEPARTMENT OF LAW, explained that
any pipeline right-of-way leases under the statute was
required to include a set of covenants that included an
assurance that the lessee would restore the land to a
condition acceptable by the commissioner.
Vice-Chair Micciche wondered if the legislation would
conclude the pipeline right-of-way needs from Prudhoe Bay
to the terminus in Nikiski. Mr. Ellis deferred to Mr.
Perrin.
DON PERRIN, DIRECTOR, PIPELINE COORDINATION OFFICE,
DEPARTMENT OF NATURAL RESOURCES (via teleconference),
explained that the state agencies had been working in terms
of field work permitting, and coordination with federal
agencies. He stated that the legislation would conclude the
right-of-way needs for the project.
9:44:15 AM
Senator Hoffman queried the percentage of the right-of-way
that the legislation accomplished. He also wondered if
there were further problem areas related to acquisition.
Mr. Perrin replied that the corridor varied in width from
on-half mile to two miles. He explained that the width was
determined to ensure adequate engineering and environmental
reviews.
Senator Hoffman remarked that the line from Prudhoe Bay to
the destination to tidewater. He wondered how much
additional right-of-way was needed for the project. He
queried the anticipated problem areas related to
acquisition. Mr. Perrin replied that the bill would allow
for completion of land as need for the right-of-way on
state land. He noted that the act only applied to state
land, and the legislation would allow for completion.
Senator Hoffman queried the percentage of additional leases
that was required for all right-of-way.
FRANK RICHARDS, MANAGER OF PIPELINE ENGINEERING AND
GOVERNMENT AFFAIRS ALASKA GASLINE DEVELOPMENT CORPORATION
(via teleconference), asked for a restatement of the
question.
Senator Hoffman wondered how much right-of-way was
currently acquired and how much was yet to be acquired. He
also queried the possible problem areas for future
acquisition. Mr. Richards replied that the legislature had
specifically required Department of Natural Resources (DNR)
to provide Alaska Gasline Development Corporation (AGDC)
the Title 38 lands through a state right-of-way in 2011,
which represented approximately 55 percent of the Alaska
Stand Alone Pipeline (ASAP) right-of-way. The addition of
the lands from the legislation gave access through Denali
State Park, Willow Creek, and Nancy Lakes. That mileage was
approximately another 5 percent of state lands. The
completion of the supplemental environmental impact
statement (EIS) would show an outcome of record of decision
by the Department of the Interior Bureau of Land Management
which would provide the federal right-of-way, at 30 percent
right-of-way. The project would be approximately 90
percent, with the remaining 10 percent in municipal,
borough, private land ownership, and native corporation
allotments still yet to be acquired.
9:49:21 AM
Senator Hoffman wondered if there were anticipated problem
areas that would require eminent domain. Mr. Richards
replied that there were very little, if any use of eminent
domain. He explained that the legislature allowed AGDC the
use of eminent domain through HB 4 and in existing
statutes.
Senator Hoffman restated his question as related to the
AKLNG project. Mr. Richards responded that the AKLNG and
ASAP currently shared a common route from Prudhoe Bay to
the Susitna River Bridge. At that point, ASAP traversed to
the east of the river, and the AKLNG headed west toward the
Cook Inlet Crossing. He agreed to provide information for
the actual land ownership requirements for AKLNG.
Senator Hoffman queried the timeframe to acquire the
required additional lands for project construction. Mr.
Richards replied that the private and municipal owned lands
would not be determined until the final investment decision
to advance the project.
Co-Chair MacKinnon wondered if there were any additional
comments on SB 70. Mr. Richards replied that SB 70 would
allow either pipeline project to proceed through the park
lands. The original intent of the legislature provided the
right-of-way across state lands, so the bill allowed for
the land to advance the pipeline project.
Senator Bishop queried the difference on the right-of-way
for the two projects. He understood that the AKLNG was 180
feet, and the ASAP was 120 feet. Mr. Richards responded
that he did not have the specifics for AKLNG. He explained
that moving a large diameter pipe required areas to work
and dispose. He stated that there was likely different
equipment for the different sized pipe.
Co-Chair MacKinnon wondered if the corridor would require
the removal of trees for an extended period of time. Mr.
Ellis replied that the land would return to a natural
state. He stated that there was normally a five to ten year
period of time that would allow for full revegetation.
Co-Chair MacKinnon CLOSED public testimony.
9:54:50 AM
AT EASE
9:56:21 AM
RECONVENED
Vice-Chair Micciche wondered what the right-of-way would
look like at post-construction. Mr. Ellis responded that
that corridor would be clear for construction. The 50 foot
right-of-way for the pipeline would be clear. He stated
that there may be a recreational trail near the pipeline
that would also provide access to the line.
SB 70 was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
9:58:25 AM
The meeting was adjourned at 9:58 a.m.
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