Legislature(1999 - 2000)
04/07/2000 09:09 AM Senate FIN
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* first hearing in first committee of referral
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SENATE BILL NO. 192
"An Act making and amending capital appropriations and
reappropriations and capitalizing funds; and providing
for an effective date."
Co-Chair Torgerson announced the Committee would be hearing
a report from the Capital Budget Subcommittee and if the
report were adopted, a committee substitute would be
drafted and distributed. He continued saying the deadline
for amendments to the capital budget legislation would be
the following Monday at 3:00 PM.
Senator Donley, chair of the Capital Budget Subcommittee,
talked about the relatively new process of addressing
capital budget requests in a subcommittee setting. He
listed the membership of the subcommittee as Senator
Torgerson, Senator Wilken, Senator Adams and himself. He
stated that Senator Leman also participated in some of the
subcommittee meetings in the place of Senator Adams.
Senator Donley shared that the proposal from the
subcommittee was to utilize $138,474,201. Those funds are a
combination of approximately $80 million general funds,
$18.5 million Alaska Industrial Development and Export
Authority (AIDEA) dividend funds and $39 million Alaska
Housing Finance Corporation (AHFC) funds, he said. He noted
that the total amount is $15,679,932 less than the previous
year's enacted capital spending and over $33 million less
than the governor's requested funding level.
Senator Donley told that the subcommittee was assigned the
task of assisting in making reductions to the operating
budget to reach the targeted goal of $30 million. He
stressed that the subcommittee was faced with reducing the
governor's requested budget increase as well as reducing
the amount of funds spent in the previous fiscal year.
Senator Donley conveyed the priorities and criteria
established by the subcommittee for project evaluation of
the proposed capital items. These, he said, included
whether the project was life, safety or health related,
school education related, was eligible for unique and
special federal funding sources and met deferred
maintenance needs. He continued listing criteria as whether
the funding request was for essential completion of a
phased project, met critical administrative needs, and
whether the project would have a high level of use to
maximize benefit to the greatest number of users. He stated
that none of the criteria was considered by itself and that
the criteria had changed some from the previous year.
Senator Donley added that the subcommittee attempted to not
include projects that were not requested by the State Of
Alaska and also to avoid projects where the state was asked
to provide funding for projects requested by other
governmental entities.
Senator Donley qualified that the subcommittee did try to
approve funding for projects that could reduce future
operating budget expenses. He gave examples of capital
projects that provided more efficient record keeping and
case-management tracking.
Senator Donley continued that to stay within the funding
allocation goals, the subcommittee could not approve all
the requested projects that met those criteria. He stressed
that the subcommittee did attempt to rate the projects to
include those that would have the most benefit.
Senator Donley relayed that the subcommittee did not
attempt to remedy the on-going problems with the Department
of Transportation and Public Facilities Statewide
Transportation Improvement Program (STIP) process. He said
this was because it was felt that decisions related to
these projects should be made by the full Senate Finance
Committee.
Senator Donley also reported that the subcommittee did not
consider Grant Anticipation Revenue Vehicles (GARVEE) bonds
as a funding source for capital projects.
SENATOR LYMAN HOFFMAN was invited to join the Committee to
speak for the Senate Minority on behalf of Senator Adams
who was not present.
Senator Hoffman spoke to an issue raised at the
subcommittee level concerning the stated intent to try to
obtain the maximum amount of federal matching funds as
possible. He regarded most of the projects meeting this
criteria were economic development projects. He believed
this year was the first in five or six years that this
criterion was not applied to consideration of funding
projects.
Senator Hoffman then expressed concerns about the confusion
over which document the subcommittee was working from. He
came to the conclusion that the original version of SB 192
was what the subcommittee was using. He reached this
conclusion after asking the subcommittee chair the direct
question and was told on the record that the original SB
192 was before the subcommittee. He stated that he would
have objected to the adoption of the governor's amended
version of SB 192 due to the omission of several rural
projects.
Senator Hoffman talked about the impacts on rural projects
contained in each version. He wanted to make sure all of
the important projects receive funding.
Senator Hoffman spoke to the governor's amended request
saying he did not think that the added STIP projects
followed a fair public process in being included in the
updated version.
Co-Chair Torgerson stated that he had a side-by-side
spreadsheet prepared by the Division of Legislative Finance
that compared GARVEE bonds related to the STIP. He said he
was trying to obtain information from the Administration as
to what projects properly belong in the STIP.
Co-Chair Torgerson spoke to frustrations the Committee has
had with the Department of Transportation and Public
Facilities in having the directions given by the
legislature followed. He shared that he intended to remedy
the situation. He went into detail about the federal
funding allocated by the legislature to certain projects
that the department refuses to undertake saying they do not
rank high enough.
Senator Leman clarified that Senator Hoffman suggested that
if certain projects were not funded this year they would
"drop off the list" of eligibility for federal funding. He
understood that they would not be dropped, but only be
delayed a year or so.
Senator Hoffman conceded these projects could get funding
in the future but that it was not fair that they be dropped
after six years and supplanted by other projects that have
not been on the STIP.
Co-Chair Torgerson told Senator Hoffman that he hoped the
Minority member would share those concerns with the
Department of Transportation and Public Facilities, who
made those decisions.
Senator Donley emphasized the serious concerns with the
entire STIP process as implemented by the Department of
Transportation and Public Facilities. He questioned the
constitutionality of the process. He stressed that the
matter was more complicated than it seemed and expressed
his desire that the Committee work to change the process.
Co-Chair Torgerson announced that a committee substitute
would be drafted to incorporate the recommendations of the
subcommittee. He stated his intent to use AIDEA funds to
pay for a portion of the capital projects.
Co-Chair Torgerson ordered the bill HELD in Committee.
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