Legislature(1997 - 1998)
03/05/1997 01:40 PM House FIN
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL 113
"An Act extending lapse dates for certain prior year
appropriations; making supplemental, capital, and
special appropriations; and providing for an effective
date."
DEPARTMENT OF NATURAL RESOURCES
Section 4(e)
$200.0 thousand dollars - Perseverance Trail
NICO BUS, CHIEF, FINANCIAL SERVICES, DEPARTMENT OF NATURAL
RESOURCES, stated that the requested funding would provide
emergency repairs to the severely storm damaged Perseverance
Trail. Though the trail is closed, use continues under
extreme hazardous conditions. The work needs to be done
before the summer season, to capture the high use period.
Delaying the work until the Fall would expose workers to
dangerous avalanche and weather conditions and would
increase project costs by limiting the time and access.
Co-Chair Therriault inquired if any of the trail rested on
private property. Mr. Bus noted that the entire trail
system was an "easement into perpetuity", belonging to the
State of Alaska.
Mr. Bus advised that no permits would be needed for
blasting. Co-Chair Hanley voiced concern with the impact of
the blasting on the streams. He requested that a letter of
response be provided by the Department of Fish and Game,
which would address the impacts of blasting on the streams,
in order that consistency could be created in use for other
requests. Mr. Bus replied that no permit is needed because
a concrete flume exists at the bottom of the area and that
no salmon can run up.
Mr. Bus spoke to the breakdown of the request; $120 thousand
dollars would be used for the blasting work and $80 thousand
dollars would be used for the bridge repair and tread work
from the beginning of the trail to the last bridge. Mr. Bus
provided Committee members a handout illustrating the
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Perseverance trail emergency repairs. [Copy on file]. He
provided an overview of that handout.
Representative Kohring questioned the "emergency" need of
the project. He urged that the request be addressed in the
Capital Budget Request (CBR). Mr. Bus reminded
Representative Kohring that over 35,000 people use the
trail. It is necessary to begin the work in May to be able
to address summer tourism. Representative Kohring noted
that the trail is used for recreation purposes only.
Representative J. Davies argued that the timing of the
project places it into the Supplemental Request category and
that the impact of not doing the work now, would close the
trail for the entire summer.
Representative Martin asked if tourism raised enough money
to address the concern and future repairs of the area. Mr.
Bus replied that the user fee for tourism was $250 dollars a
year. He argued that the State of Alaska is the land owner,
whose responsibility it is to keep the area safe.
Representative Martin asked if the City of Juneau would
participate in covering the costs. Mr. Bus noted that the
City's budget was limited as a result of many areas
experiencing significant storm damage this year. Mr. Bus
spoke to the timing of the repair work noting that if it
commenced on May 1st, it would be ready for the summer
tourists in early June.
Representative J. Davies asked if the commercial use fees
were placed into the General Fund. Mr. Bus informed members
that those fees are placed into the Division of Parks
budget, and then used for operation purposes.
Section 9(a)
$3,788.3 thousand dollars - Fire Suppression
Mr. Bus noted that the request would address the fire
suppression budget from January through June, 1997. Last
year, the Department spent $7.8 million dollars and carried
forward $2.1 million dollars, leaving a balance of $1.5
million dollars. Costs between now and June, 1997, are
estimated to be $5.3 million dollars.
Co-Chair Hanley asked the amount of fixed costs in the
request. Mr. Bus replied that the fixed costs from January
through July, would be $2.3 million dollars. Co-Chair
Hanley understood that the fixed costs would be addressed in
the Operating Budget and that the "non-fixed costs" would be
addressed in the Supplemental Budget Request. Mr. Bus
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replied that the fixed costs to the Department were $4.6
million dollars, and were divided into two time segments.
Mr. Bus added that the increase to the fixed cost budget
resulted from long term contracts coming up for renewal at
higher amounts than originally contracted for.
Section 9(c)
$100.0 thousand dollars - Old Eagle School Site
Mr. Bus informed Committee members that this supplemental
request would fund the removal of existing buildings and
facilities at the Old Eagle School site and would allow for
eventual remediation of contaminated soils at the site so to
reduce health and safety hazards. The request had resulted
from a lawsuit which was filed by the Village of Eagle. The
judge ordered that the money be appropriated by July, 1996.
Co-Chair Hanley asked who built the school. Mr. Bus stated
that it was purchased from the Bureau of Indian Affairs
(BIA). To make the site useable, the buildings will need to
be cleaned up and the soil contamination addressed. The
Village of Eagle sued the U.S. Government and the State of
Alaska.
BARBARA RITCHIE, DEPUTY ATTORNEY GENERAL, CIVIL DIVISION,
DEPARTMENT OF LAW, noted that the settlement was adopted as
an order of the Court. The U.S. government is not
contributing to the removal costs. There is no evidence to
indicate that the contamination existed in 1967 when the
State took title of the property. She stated, the State of
Alaska is responsible for the clean-up costs and all hazards
on the property.
Ms. Ritchie continued, the Village of Eagle brought their
law suit against the State in order to bring the property
back to it's original state. The U.S. government and the
State of Alaska moved to dismiss the case based on sovereign
immunity. There exists a statute stipulating that a suit
can be brought forward, if the complaint is filed by the
same entity who owned the property before the contamination.
The United States dismissed it, noting that they were not
the former owner of the property. The judge denied that
action and requested a briefing in order to check the Alaska
Native Claims Settlement Act (ANCSA) status of government at
that time.
Co-Chair Therriault pointed out that the building was
"laced" with asbestos before the State took ownership from
the federal government. Ms. Ritchie assessed that the
asbestos tiles were in the floor and were not in and of
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themselves illegal. If they were well maintained, there
would not be a release of fiber. The problem developed when
the State purchased the property, and it was no longer
maintained.
Co-Chair Hanley voiced his frustration that the State is
held liable for an REAA responsibility. Ms. Ritchie
reiterated that this is State property and that it is not
being operated by an REAA at this time.
Mr. Nico advised that the requested funding would only
address Phase I of the project. Following completion of
that, the oil contamination problem would need to be
addressed. This request has been expedited because of the
Court settlement order completion by July 1, 1997.
Ms. Ritchie reiterated that there are no facts indicating
that a problem existed before the State took over ownership
of the property. Committee members noted their surprise
that the federal government would not be responsible for any
of the costs.
(Tape Change HFC 97-47, Side 2).
DEPARTMENT OF LAW
Section 6(a)
0.0 - Oil and gas audits & legal
proceedings
FRED FISHER, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,
DEPARTMENT OF LAW, pointed out that in most years since
FY79, the Department has received more than one
appropriation per year for oil and gas litigation purposes.
Beginning in FY92, the Legislature changed that policy by
making only one appropriation per year. Consequently, from
the years FY92 through FY95, the Department requested
supplemental appropriations, although, had difficultly
spending those appropriations by the end of the fiscal year.
As a result, management policy was to encumber the funds
received late in the fiscal year and spend those funds
during the following fiscal year. This practice was
questioned last year by the Division of Budget and Audit, at
which time, the Department requested a lapse date extension
which was granted by the Legislature.
Mr. Fisher spoke to the available options. He noted that
concerns had been expressed with tapping the Constitutional
Budget Reserve (CBR) fund 3/4 vote. Ms. Ritchie noted her
surprise by handout provided from the Governor's Office
recommending deletion of the request. [Copy on file].
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Mr. Fisher referenced another option which would request a
General Fund supplemental in leu of the last date extension.
An additional option would be deleting the entire section.
He believed, to discontinue the current practice would place
the Department in a situation requiring future supplemental
appropriations.
Co-Chair Hanley agreed that there have been carry-forwards
for many years. He suggested that the Department provide a
budget which clarifies what they anticipate the need will be
for litigation. Should the Department have unforseen
circumstances, they will then come to the Legislature for a
supplemental. Co-Chair Hanley requested no more carry-
forwards.
Mr. Fisher advised, of the $7 million dollars allocated, the
Department has spent $6.1 million dollars and anticipates
using the remainder before the end of the fiscal year. He
pointed out that the request had been made in order to clear
potential audit questions.
Co-Chair Hanley noted that a split supplemental would not
create problems; carry-forwards create problems. Mr. Fisher
pointed out that prior year costs to the budget generally
are representative of actual expenditures and encumbrances
as of the end of the fiscal year. That action has created
confusion to oil and gas litigation costs.
Co-Chair Hanley requested a spread-sheet of the "actual"
costs as well as anticipated "actual" costs to be spent by
the Department over the year. The chart should indicate the
$7 million dollars that was encumbered in the previous
fiscal year and spent in this fiscal year.
Section 6(b)
$97.1 thousand dollars - Civil
Ms. Ritchie provided Committee with a handout identifying
additional FY97 judgments from the General Fund. [Copy on
file]. The list contains a total itemized request of $235.1
thousand General Fund dollars.
Co-Chair Hanley asked if the Venetie versus State case was a
judgement or settlement. Ms. Ritchie stated that request
was for $11.7 thousand dollar costs awarded to the plaintive
by the federal District Court arising from the trial of that
case. The request does not cover attorney fees or
settlement costs. No payment was involved in the
settlement.
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She commented that this was not the Venetie case that the
State is currently taking to the Supreme Court. The case
referenced in Section 6(b) originated in November, 1986,
when the IRA Councils of Venetie sued the State and the
Commissioner of the Department of Health and Social Services
for an injunctive and declaratory relief addressing
substitute birth certificates. The State declined to issue
the birth certificates on the basis that the Tribal Courts
did not have the authority to undertake the adoption.
Mr. Ritchie continued, the case went to the 9th Circuit
Court and then remanded back to the District Court for a
trial on the Tribal status issue. When the case was
remanded, it was consolidated for the purposes of a trial.
Eventually, the judge issued a decision on tribal status and
Indian country.
Ms. Ritchie noted that the request would cover costs accrued
by the plaintiffs in that case. They also sought attorney
fees which Judge Holland denied. The issue of case
addressed Tribal status and costs were awarded.
Co-Chair Hanley noted that Alaska Legal Services was
representing the Venetie case. Ms. Ritchie interjected that
case was being represented by Alaska Legal Services,
although, the tax case was represented by the Native
American Rights Fund. Alaska Legal Services is a private,
non-profit, established by federal law, and recipient of
funding under the Legal Service's Act appropriated by
Congress. Legal Services is allowed under federal law, to
represent any sort of group or association if that group is
composed of people eligible for that assistance under the
Legal Services Corporation Act. That criteria is based upon
income.
Representative J. Davies asked if the interest column would
increase. Ms. Ritchie replied that the interest column had
been calculated through June 30, 1997.
Ms. Ritchie noted that in 1996, Congress amended the Legal
Services Act to prohibit recipients of Legal Services
funding from collecting attorney's fees. That prohibition
applies to all cases after the enactment date, although,
would not apply to cases with pending issues prior to that
time.
HB 113 was HELD in Committee for further discussion.
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