HOUSE FINANCE COMMITTEE February 15, 1996 1:41 P.M. TAPE HFC 96-38, Side 1, #000 - end. TAPE HFC 96-38, Side 2, #000 - end. CALL TO ORDER Co-Chair Mark Hanley called the House Finance Committee meeting to order at 1:41 p.m. PRESENT Co-Chair Hanley Representative Martin Co-Chair Foster Representative Navarre Representative Grussendorf Representative Parnell Representative Kelly Representative Therriault Representative Kohring Representatives Brown and Mulder were absent from the meeting. ALSO PRESENT Representative Gene Kubina; Joe Perkins, Commissioner, Department of Transportation and Public Facilities; Nancy Slagle, Director, Division of Budget Review, Office of the Management and Budget, Office of the Governor; Remond Henderson, Director, Division of Administrative Service, Department of Community and Regional Affairs; Sharon Barton, Director, Division of Administrative Services, Department of Administration. SUMMARY HB 361 An Act relating to municipal capital project matching grants for a municipality organized under federal law as an Indian reserve; and providing for an effective date. HB 361 was reported out of Committee with a "do pass" recommendation and with two zero fiscal notes; one by the Department of Community and Regional Affairs, dated 2/9/96; and one by the Department of Administration, dated 1/19/96. HB 468 An Act making supplemental appropriations for the expenses of state government and making and amending appropriations; ratifying certain state 1 expenditures; and providing for an effective date. HB 468 was HELD in Committee for further discussion. HOUSE BILL NO. 468 "An Act making supplemental appropriations for the expenses of state government and making and amending appropriations; ratifying certain state expenditures; and providing for an effective date." JOE PERKINS, COMMISSIONER, DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES testified in regards to Section 4(a), highway and bridge repair costs related to Southcentral flood disaster. He gave a brief history of the condition of the Copper River Bridge. It was built in 1910. The bridge has achieved recognition as the biggest and most complicated engineering structure in the state of Alaska. The bridge was damaged in 1964 by the earthquake. One span fell into the river. The bridge was partially repaired in 1968. The damaged pier is on the far left hand side. He discussed repairs made to the bridge. He observed that the bridge was further damaged in the fall of 1995. One pilot was destroyed, possibly by an iceberg. The bridge settled back on the pier. It is cracked and leaning at a 15 percent angle. The bridge is in danger of falling into the river. A national group of experts on bridges compiled a report on what should be done to stabilize the bridge. The report predicted that if the damaged pier fails the span will probably collapse and telescope the bridge into the river. If the bridge goes into the river it might be impossible to remove it. The bridge would probably block the river sufficiently to divert the river. If the river is diverted visitor facilities at Child's Glacier would be flooded along with several miles of the Copper River Highway. Commissioner Perkins observed that federal funds will pay for the first stage of repairs. The first stage is the replacement of the bent pile. The State will receive $2.2 million dollars in federal disaster funds. The State matching funds of $400.0 thousand dollars will be required to capture the federal funds. The bridge repairs will also help stabilize the river by removing obstructions. Commissioner Perkins emphasized the importance of the bridge. He stressed that the loss of the bridge would probably preclude road access to Cordova. It would cost between $20 and $40 million dollars to replace the bridge. Recreation activities on the other side of the bridge are increasing. He noted that reconstruction would start in April if funds are approved. The initial repair would make 2 the bridge safe and stable. In response to a question by Representative Therriault, Commissioner Perkins noted that the other two piers and the base of the bridge is in excellent condition. A hanging bridge will be constructed across the down span to provide access to the other side. In response to a question by Co-Chair Hanley, Commissioner Perkins clarified that there are no plans to upgrade the bridge beyond stabilization. He noted that it would cost another $2.0 million dollars to lift the span and replace the lost steel. An additional $1.0 million dollars could be spent to reinforce the other existing piers. Co-Chair Hanley stated that he did not want to authorize funds beyond what is necessary to stabilize the bridge so that it will not be washed out in another flood or minor earthquake. In response to a question by Co-Chair Hanley, Commissioner Perkins noted that the study cost $10.0 thousand dollars. He observed that time was donated. In response to a question by Representative Therriault, Commissioner Perkins stated that Copper River Highway Settlement money cannot be diverted to the bridge repair. REPRESENTATIVE GENE KUBINA testified in support of the appropriation. He stressed the tourism value associated with the area. Co-Chair Foster expressed support for the appropriation. HOUSE BILL NO. 361 "An Act relating to municipal capital project matching grants for a municipality organized under federal law as an Indian reserve; and providing for an effective date." REPRESENTATIVE JERRY Mackie, sponsor HB 361, testified in support of HB 361. He noted that the legislation was introduced at the request of the Metlakatla Indian Community. He explained that it was not clearly defined that Metlakatla which was established as an Indian Reserve under law would qualify for the Municipal Assistance Matching Grant Program. He noted that the Community received Municipal Assistance Matching Grants until FY 95. He stressed that it was the intent of the Program that Metlakatla would qualify. He observed that HB 361 establishes in statute that Metlakatla qualifies as an organized municipality for a municipal assistance matching 3 grant under AS 37.06. The legislation would clarify that Metlakatla does not qualify for a grant as an unincorporated community. He observed that they received unincorporated grants in prior years. Representative Mackie provided members with a letter from the Department of Community and Regional Affairs, dated 1/18/94 detailing grants received by Metlakatla (Attachment 1). Representative Mackie maintained that the legislation would not open the program for other tribes to receive municipal assistance matching grants. He referred to page 1, lines 7 & 8. He stated that this language would limit qualification to Metlakatla. He pointed out similarities to other communities of corresponding size. REMOND HENDERSON, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS stated that the legislation will provide authorization for previous grants. Representative Mackie noted that Metlakatla will not receive a grant in FY 97 unless the legislation is passed. He stressed that Metlakatla has utilized previous grants. He pointed out that Metlakatla did not receive an organized municipal grant for FY 96. Representative Parnell asked if Metlakatla receives federal funds based on being an unincorporated city. Representative Mackie stated that Metlakatla receives PL874 Funds as do other communities with Native populations. He stated that Metlakatla received a grant for $60.0 thousand dollars in FY 94 for a fire hall and $58.0 thousand dollars in FY 95 for a police department project. Their FY 96 organized municipal grant for $59.0 thousand dollars was not approved. Representative Navarre MOVED to report HB 361 out of Committee with individual recommendations and with the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. HB 361 was reported out of Committee with a "do pass" recommendation and with two zero fiscal notes; one by the Department of Community and Regional Affairs, dated 2/9/96; and one by the Department of Administration, dated 1/19/96. HOUSE BILL NO. 468 "An Act making supplemental appropriations for the expenses of state government and making and amending appropriations; ratifying certain state expenditures; and providing for an effective date." 4 NANCY SLAGLE, DIRECTOR, DIVISION OF BUDGET REVIEW, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR continued her review of HB 468 from 2/14/96. She provided members with a spreadsheet of HB 468 (see Attachment 1, 2/14/96). OFFICE OF THE GOVERNOR Ms. Slagle reviewed Section 16, $1.5 million dollars to the Office of Management and Budget for a small reserve to allow immediate response to anticipated FY 96 & FY 97 disasters and fires. She maintained that there is a potential that funds would not be available to respond to a small disaster. She stressed that appropriations from the Disaster Relief Fund have to go through the disaster relief process. She assured the Committee that funds spent by the Office of the Governor for disaster relief will be scrutinized by the Office of Management and Budget. She added that the Office of Management and Budget would provide the Legislature with status reports on any expenditures. Co-Chair Hanley asked if the Disaster Relief Fund is in the Office of the Governor. Ms. Slagle observed that the Department of Military and Veterans Affairs has control of the Disaster Relief Fund. He questioned why the request would place the appropriation in the Office of Management and Budget. Ms. Slagle replied that it was placed in the Office of Management and Budget to allow funding for small fire suppression activity. She suggested that a portion of the funds could be placed in the Department of Military and Veterans Affairs Disaster Relief Fund. Co-Chair Hanley observed that the Disaster Relief Fund allows appropriations for fire suppression. He asked for clarification as to why the appropriation should be made to the Office of the Governor. Ms. Slagle spoke in support of the placement under the Office of the Governor. She stressed that there may be conflicting priorities. Co-Chair Hanley pointed out that appropriations must follow guidelines under the Disaster Relief Fund. He spoke in support of making the appropriation to the Disaster Relief Fund. Representative Martin noted that the Disaster Relief Fund was placed under the Department of Military and Veterans Affairs because it was deemed that the Department was best able to act immediately. He noted that the Department of Military and Veterans Affairs supervises the National Guard. Co-Chair Hanley questioned what emergencies were not funded by the Department of Military and Veterans Affairs that the 5 Governor felt should have been funded. He summarized that the Governor does not think there is enough flexibility in the Disaster Relief Fund. Ms. Slagle stressed that there needs to be a mechanism to take care of disasters. She emphasized that the Office of the Governor has cleared previous appropriations. She observed that it would be difficult to find $150.0 thousand dollars to cover a small disaster from the remaining appropriations. She noted that a portion of the request would cover a past disaster. (Tape Change, HFC 96-38, Side 2) ALL DEPARTMENTS Ms. Slagle reviewed Sections 17(a), Miscellaneous Claims - general funds & Section 17(b), Miscellaneous Claims - other funds. She noted that statutes require that bills, invoices and obligations of the State that are over two years old must be approved by the Legislature. Ms. Slagle reviewed Section 18, Prior Year Ratification. She noted that this section straightens accounting records. She stated that the Division of Audit and Management Services has reviewed the items in this section. She stressed that many of the problems stem from the conversion of the accounting system in 1985. She emphasized that the only way these old records can be closed out is through ratification by the Legislature. She assured the Committee that problems are being resolved administratively when possible. DEPARTMENT OF PUBLIC SAFETY Ms. Slagle added that the Administration has requested a new section be included in HB 468. She explained that the Department of Public Safety's FY 92, 93 and 94 capital requests for driver's manuals, license plates and equipment were combined and the amount reduced. In FY 95 the language identifying equipment as part of the capital request was inadvertently deleted. The Administration requested that the FY 95 capital appropriation be amended to include "equipment". The FY 96 capital request did include equipment. She explained that the equipment is specifically related to the issuance of driver's licenses. Co-Chair Hanley reviewed HB 468. He identified sections that would not be included in the proposed committee substitute. He noted that his office would prepare a spreadsheet comparing the proposed committee substitute to the original legislation. (See Attachment 2). 6 ADJOURNMENT The meeting adjourned at 2:55 p.m. 7