Legislature(1993 - 1994)

02/19/1993 01:30 PM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
  HOUSE BILL 60                                                                
       "An Act making appropriations for capital projects; and                 
       providing for an effective date."                                       
  (DNR), provided the Committee with handouts addressing DNR's                 
  Capital Improvement Projects (CIP) requests.  [Attachment #1                 
  - #5].                                                                       
  Commissioner Olds  introduced the Governor's  priorities for                 
       1.   Implement responsibilities of an Owners' State.                    
       2.   Stimulate sustainable economic development.                        
       3.   Implement efficiencies.                                            
       4.   Deliver essential services.                                        
       5.   Stimulate    local    initiative    and   personal                 
  Commissioner  Olds  discussed  the   Department's  strategic                 
  missions.   As Alaska  moves into  the 21st  century, it  is                 
  facing a time  of serious economic  stress.  In response  to                 
  the Governor's priorities, the missions of the DNR are:                      
       1.   To vigorously fulfill  and implement the Statehood                 
            compact  and  pioneer effective  leadership  of an                 
            Owners' State through the integration of State and                 
            federal interests, cooperation, and  protect State                 
       2.   To  stimulate  resource-based   economic  activity                 
            while   conserving   Alaska's  wild,   scenic  and                 
            cultural values as  a major player in  an evolving                 
       3.   To  simplify  and accelerate  regulatory processes                 
            and  organizational  structures  to  allow  rapid,                 
            sustained economic growth.                                         
       4.   To  raise  public  awareness of  Alaska's  natural                 
            resource asset base,  its market potential  within                 
            Alaska and  the world,  how it  effects our  daily                 
            lives, and how  to implement  its promise for  our                 
            common future.                                                     
  Commissioner  Olds listed DNR's  priority ranking of Capitol                 
  Improvement Projects contained in HB 60.                                     
       1.   Owner State Assertions and Land Selection  request                 
            for $2,265.0 million dollars.                                      
            a.   Land  Selection  Audit  request for  $1,800.0                 
                 million dollars.   The deliverables are clear                 
                 title  to  the last  twenty million  acres of                 
                 land from the federal government and  updates                 
                 to the State's Land Records.                                  
  Representative Hanley  asked if  this request  would be  the                 
  last  amount  requested  by  DNR in  order  to  finish these                 
  projects.  Commissioner Olds stated the requested allocation                 
  would finish the selection process.  He added there would be                 
  a second stage to go to patent.  Representative Hanley asked                 
  if  the  requested amount  would address  all of  this years                 
  needs.  Commissioner  Olds stated it would.   Representative                 
  Hanley questioned if any land would  be lost if all criteria                 
  was not met.                                                                 
  that the Congressional deadline for the selection is 1/4/94.                 
  Past  that date, the State of  Alaska can not select any new                 
  lands.  Currently, there  are 140 million acres of  which 86                 
  million are  patented or tentatively  approved.  Once  it is                 
  patented, it can be developed.  The total entitlement is 105                 
  million acres.   The  State of  Alaska is  allowed to  over-                 
  select  the  entitlement  by  twenty   five  percent.    The                 
  requested allocation will allow DNR  to review an additional                 
  45 million acres currently in  selection status, then decide                 
  which has the highest  value, moving them into an  expedited                 
  process with the Bureau of Land Management.                                  
  Commissioner Olds listed additional CIP requests:                            
            b.   Navigability determinations request  for $290                 
                 thousand dollars.  Many of the state's rivers                 
                 and  streams  and   subsequent  securing   of                 
                 ownership and management  of submerged  lands                 
                 have not  yet been evaluated  regarding their                 
            c.   The state needs  to settle many of  the right                 
                 of ways  for their  value to  the public  for                 
                 transportation   and   resource   development                 
                 request for $175 thousand dollars.                            
       2.   Seismic  Data  Acquisition/Evaluation  request for                 
            $580 thousand  dollars.   The purchase of  seismic                 
            data is important for the pre-evaluation  of areas                 
            proposed for leasing in the  State's five year oil                 
            and gas lease schedule.                                            
  Representative  Grussendorf  questioned  the request  for  a                 
  student intern position.                                                     
  position  would enter  most  of the  required data  into the                 
  system and then manipulate that information.                                 
       3.   Basin Analysis packets requests for $330  thousand                 
            dollars.  This project funds the preparation under                 
            contract  of  a  series   of  promotional  packets                 
            consisting  of   non-proprietary  geological   and                 
            geophysical maps of  selected under explored areas                 
            of the State having oil and gas potential.                         
       4.   Geological/Geophysical Inventory request  for $1.5                 
            million  dollars.   The  State's  most prospective                 
            mineral  lands   must  be  delineated   and  their                 
            potential   clearly   understood  by   sources  of                 
            investment  capital.   This  is  the  second  year                 
            funding of a multi-year project.                                   
  Representative Brown asked if the above request would be for                 
  mineral inventory  rather than  oil and  gas.   Commissioner                 
  Olds   replied  that  the  Oil  and  Gas  Division  and  the                 
  Geophysical Division would  converge on the selectivity  for                 
  all resources including oil, gas and other minerals.                         
  Representative Brown asked  if non petroleum areas  would be                 
  selected for mineral  focus.  Commissioner Olds  stated this                 
  was not an accurate assessment.  The component addresses all                 
  aspects of which oil  and gas are included.   Representative                 
  Brown  asked if the Department expected  to discover new oil                 
  and gas basins in the State.  Commissioner Olds replied that                 
  the Department  has  surface information  about the  basins,                 
  however, the real  potential is not known  until an analysis                 
  has been completed.                                                          
       5.   Land Status GIS request for $330 thousand dollars.                 
            The conversion of  the State's  ownership maps  to                 
            digital format  has been  accelerated in the  last                 
            two  years.    The  plan   was  to  complete  this                 
            conversion  in  the  next three  years.    At this                 
            request level the project can  not be expedited as                 
            originally intended.                                               
       6.   Parks-Water,  Toilets,  Dump-stations  request for                 
            $750 thousand dollars.  Many  of the State's parks                 
            units do not meet the new water quality standards.                 
       7.   Rehabilitation    of     Existing    Parks/Tourist                 
            Facilities  request  for  $750  thousand  dollars.                 
            Many of the  State park areas and  facilities have                 
            deteriorated due to years of deferred maintenance.                 
       8.   OGRA  system  software  upgrade  request  for  $25                 
            thousand dollars.   The Royalty Accounting section                 
            computer's annual hardware and  software upgrades.                 
       9.   Land Settlement Projects request for $175 thousand                 
            dollars.   The  Land  Settlement  project  removes                 
            obstacles to the sale,  lease, and development  of                 
            lands by providing  funds for the survey  of those                 
            lands,  or  providing  access to  land  ready  for                 
       10.  Forest   Inventory   request  for   $350  thousand                 
            dollars.  This  project will fund the  first phase                 
            inventory of  the Valdez/Copper  River and  Tanana                 
       11.  Forest   Health   Initiatives  request   for  $450                 
            thousand dollars.    This  request  continues  the                 
            Forest   Health   Initiative  by   expanding  into                 
            Valdez/Copper  River,  Mat-su  and  Tanana  Valley                 
            providing for  public involvement  in forest  from                 
            insects and disease, determining  alternatives for                 
            forest  health  restoration and  finally providing                 
            for decisions which could range  from no action to                 
            prescribed burning, harvest, reforestation  and so                 
       12.  Tanana  Valley  Resources Development  request for                 
            $405 thousand dollars.  This  project pays for the                 
            work to have  timber sales  in the Tanana  Valley.                 
            It is a scaled down version of the total need.                     
       13.  Reforestation request for $250 thousand dollars  -                 
            GF/$200 thousand dollars Reforestation Fund.  This                 
            project funds the reforestation  of some parts  of                 
            the Tanana  Valley, Tyonek,  and Kenai  Peninsula,                 
            and the South West area.                                           
       14.  Recorder's Office -  Records Preservation  request                 
            for  $200 thousand  dollars.  The  State Ombudsman                 
            has recommended that the State refilm and preserve                 
            itsrecords as  they have  deteriorated to a  point                 
            where they are no longer usable.                                   
  (Tape Change, HFC 93-27, Side 2).                                            
  Representative  Hanley  asked  if  any  of  the  land  being                 
  developed belongs to the Mental  Health Trust.  Commissioner                 
  Olds replied that the  disputed land has tied up  over seven                 
  million acres.   Representative  Hanley  asked that  further                 
  details be provided to the Committee.                                        
  Commissioner Olds continued  discussing the department's CIP                 
       15.  Fire  Radio  Communications equipment  request for                 
            $150 thousand dollars.   The fire  fighters depend                 
            on good communication equipment.   BLM wants their                 
            equipment  back  and  the   State  needs  to   buy                 
       16.  Information  Systems  Efficiencies  downsizing for                 
            $100 thousand  dollars has  been deleted  from the                 
            budget request.                                                    
       17.  New Recreational  Tourist Facilities  Construction                 
            request  for $250 thousand  dollars.   Eagle River                 
            Green  Belt access  construction on  Chugach State                 
       18.  Coal-bed   Methane   Programs  request   for  $300                 
            thousand dollars.   Alaska's high coal  resources,                 
            distributed across  many areas of the State, could                 
            top  5.5  trillion tons--1/3  to  1/2 of  the U.S.                 
            total.  Indirect  evidence indicates Alaska  could                 
            have an in-place coal bed  methane resource of two                 
            thousand  trillion cubic  feet.   This project  is                 
            designed to assess the potential of this resource.                 
       19.  Commercial Recreational Offerings request for $150                 
            thousand dollars.   In order to  have recreational                 
            developments  of State  land  money is  needed  to                 
            upgrade roads and to market projects for Northeast                 
       20.  Hydrologic  Network  Evaluation  request for  $275                 
            thousand  dollars.    A State/Federal  cooperative                 
            effort to  carefully review Alaska's  water stream                 
            gaging network and determine the best location for                 
            gages.    This is  the  most fundamental  of water                 
            quantitative evaluation tools.   These State funds                 
            will trigger an  equal amount of matching  federal                 
  Commissioner Olds  commented on  the DNR-USGS  stream gaging                 
  coop  program.  Stream flows  will be measured for community                 
  and  public   water  systems,   highway/bridge  design   and                 
  construction,    water    permitting   and    water   rights                 
  applications, public  health and  safety.   This  is also  a                 
  State/Federal  cooperative effort  and  it  will trigger  an                 
  equal amount of matching funds.                                              
       21.  Completion of the STORET  System request for  $125                 
            thousand dollars.  This project will significantly                 
            enhance permit application processes and eliminate                 
            much manual effort.                                                
       22.  Agricultural  Land  Disposal   request  for   $100                 
            thousand  dollars.   This  funds  the  disposal of                 
            agricultural    parcels    per    the   Governor's                 
            Agricultural  Task  Force.     Providing  economic                 
            opportunities to new agricultural producers was  a                 
            major focus of the task force.                                     
  REPRESENTATIVE PAT  CARNEY recommended  that the  Department                 
  reconsider involvement with long term  development loans for                 
  farmers.    He  noted this  would  be  a  disservice to  the                 
  Representative  Brown questioned  placing  item #22  in  the                 
  capital budget  rather than the  operating budget.   Mr. Bus                 
  stated  these positions were all new surveys and noted there                 
  is  not  enough money  in  the  operating  budget  from  CIP                 
  receipts.    Representative  Brown asked  if  these services                 
  would  be  contracted out.   Mr.  Bus  stated they  would be                 
  contractual monies.                                                          
       23.  Plant   Material   Center   equipment  replacement                 
            request for $80 thousand dollars.  Much of the PMC                 
            equipment  is  in  very  bad  shape or  no  longer                 
            functional.    This  results in  much  wasted time                 
            fixing or maintaining equipment.                                   
       24.  Wetlands  Investigation  &  Classification request                 
            for $60 thousand  dollars.  The objective  of this                 
            project  is  to  define  the  differences  between                 
            Alaskan wetlands and those of other regions of the                 
  Representative Brown asked why the mining project was placed                 
  in  the  capital budget  rather  than the  operating budget.                 
  Commissioner Olds  stated that  mining projects  were not  a                 
  development  and  wetland  investigation  will  affect   the                 
  outcome  of  land  development.     Ms.  Lyles  added,  that                 
  currently there is  a project  in the State  to examine  the                 
  wetlands classification methodology.  The State of Alaska is                 
  asking that a  hydromorphic methodology be used  which would                 
  allow  more  lands  to  be  appropriately  developed.    The                 
  Division of Water presented this as a  one time job, to gain                 
  the approval and  to establish that methodology.   After the                 
  methodology  is  adopted,  then   it  becomes  an  inventory                 
       25.  Mining Projects request  for $50 thousand dollars.                 
            This is a  pilot program  to demonstrate that  the                 
            mining industry  has very  high revenue  potential                 
            for the State.   Funds will be used to  purchase a                 
            smelter study  and video production.   These funds                 
            will be matched by private industry.                               
  Commissioner  Olds  added  options  not  involved  with  CIP                 
       *    UST  Testing,  Eval.,  Removal   -  $654  thousand                 
            dollars "470" fund.                                                
       *    Mental  Health  Trust Reconstitution  -  $3.773 MH                 
            Trust Fund                                                         
            Commissioner  Olds  provided  the  Committee  with                 
            Attachment #5 describing  the Mental Health  Trust                 
       *    Land & Water Conservation Fund                                     
       *    Historic Preservation Fund                                         
  Representative Therriault asked if the $654 thousand dollars                 
  of the 470 funds were due to a prioritization.  Commissioner                 
  Olds explained  those are  different categories  and do  not                 
  originate  from   general  fund  dollars.     Representative                 
  Therriault questioned the determination  process used in the                 
  decision and asked if the sites  presented a threat to human                 
  health and  public safety.   Commissioner  Olds stated  that                 
  Commissioner  Sandor  has  the main  responsibility  for the                 
  conservation analysis and believes those  items listed to be                 
  critical to health factors.                                                  
  Representative Therriault understood that the State uses the                 
  threat of using the 470 fund to keep private land  owners in                 
  line  to clean up projects.   He felt  that the State should                 
  use  general  funds  for clean  up  rather  than 470  funds.                 
  Representative Brown  stated  that cost  recovery should  be                 
  sought  from   the  responsible  parties.     Representative                 
  Therriault  stated that in many  cases those parties are now                 
  bankrupt.  Commissioner  Olds stated that the  Department of                 
  Law is involved  in all the  above mentioned cases and  will                 
  maximize recovery of all costs.                                              
  Representative Brown questioned spending the proposed budget                 
  to assess unknown  resources.   Commissioner Olds stated  he                 
  was willing to  revisit cost projections,  but noted, it  is                 
  his    responsibility    to    maximize    all    resources.                 
  Representative  Brown   emphasized  her  concern   with  the                 
  determination process used by the Department.                                
  Representative Brown referenced  the GIS System  Project for                 
  $330   thousand   dollars.       She    stated   that    the                 
  Capital/Operational Status Report shows  that DNR still  has                 
  an unexpended  balance of  $753 thousand dollars.   Mr.  Bus                 
  replied that the  1991 appropriation  has been fully  spent.                 
  The 1992 appropriation will be fully spent by the end of the                 
  fiscal  year.   The  documentation  indicates that  there is                 
  anticipated carry  forward of  $175 thousand  dollars.   The                 
  original request  of the  Department was  for $660  thousand                 
  dollars and because of the carry forward it was reduced.                     

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