Legislature(2001 - 2002)

03/28/2001 01:38 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
 GENERAL SUBJECT(S):                                                                                                          
 HB  47-APPROP: GOVERNOR'S CAPITAL BUDGET                                                                                       
     Department of Environmental Conservation                                                                                   
     Department of Transportation and Public Facilities                                                                         
The following overview was taken in log note format.  Tapes                                                                     
and handouts will be on file with the House Finance                                                                             
Committee through the 22nd Legislative Session, contact 465-                                                                    
2156. After the 22nd Legislative Session they will be                                                                           
available through the Legislative Library at 465-3808.                                                                          
 LOG SPEAKER                DISCUSSION                                                                                      
      TAPE HFC 00 - 65                                                                                                        
      SIDE A                                                                                                                  
 000                        DEPARTMENT OF ENVIRONMENTAL CONSERVATION                                                          
 37   Representative        Stressed the need to account for use of                                                             
      Hudson                the AHFC dividend in the operating budget                                                           
                            so that they are not overspent.                                                                   
 101 STEVE HILDEBRAND,      Clarified that of the $103 million AHFC                                                             
      FISCAL ANALYST,       dividend dollars for FY02, $53 million                                                              
      OFFICE OF MANAGEMENT dollars was set aside for capital                                                                    
      AND BUDGET, OFFICE    projects. Another $6 million dollars was                                                            
      OF THE GOVERNOR       originally included in the Governor's                                                               
                            request to fund debt retirement. The                                                                
                            Governor's request accounts for the full                                                            
                            $103 million dollars.                                                                             
 185 ROB CARPENTER,         Explained that the House has appropriated                                                           
     FISCAL ANALYST,       $2.8 million dollars for operating                                                                   
     LEGISLATIVE FINANCE purposes. There is still $3 million                                                                    
      DIVISION              dollars unaccounted for.                                                                          
 243 Mr. Hildebrand         Observed that HB 103 and HB 104 did not                                                             
                            appropriate $6 million dollars into the                                                             
                            Debt Retirement Fund as proposed by the                                                             
 258 Representative Croft Summarized that HB 103/HB 104                                                                         
                            appropriated $2.8 million dollars and                                                               
                            there is $52 million dollars proposed in                                                            
                            the capital budget.                                                                               
287 Mr. Carpenter          Noted that the governor originally                                                                   
                           proposed $58 million dollars capital                                                                 
                           projects. The House allocated $52 million                                                            
                           dollars in the capital budget. The                                                                   
                           remaining, minus $3.1 million dollars, is                                                            
                           obligated to debt service payments for                                                               
                           AHFC bonds issued in prior years.                                                                  
406 Representative Croft Of the original there was $45 million for                                                              
                           debt retirement, leaving $58 million                                                                 
                           dollars. The $58 million for capital                                                                 
                           projects was reduced to $52 million                                                                  
                           dollars, leaving $6 million dollars. The                                                             
                           Governor's plan would have used the $6                                                               
                           million for debt retirement. The House                                                               
                           uses $2.8 million dollars of this amount                                                             
                           for operating allocations, leaving $3.2                                                              
                           million dollars.                                                                                   
      Mr. Hildebrand       Explained that the Governor has                                                                      
                           discretion to spend dividends from state                                                             
                           corporations. Alaska Housing Finance                                                                 
                           Corporation (AHFC) supports housing and                                                              
                           infrastructure. He stressed that it is                                                               
                           appropriate to apply the dividend for the                                                            
                           Department of Environmental                                                                          
                           Conservation's Village Safe Water                                                                    
                           Projects program and municipal matching                                                              
                           grants as infrastructure building.                                                                 
627 Mr. Easton             Stated that the department's mission is                                                              
                           to assist communities in improving                                                                   
                           sanitation conditions. The department                                                                
                           achieves this goal through grants and low                                                            
                           interest loans to communities to build                                                               
                           water, sewer and solid waste facilities.                                                             
                           He pointed out that the budget                                                                       
                           composition has changed over the past few                                                            
                           years. In FY 99 the state invested $44                                                               
                           million state dollars in sanitation. The                                                             
                           FY01 budget would invest $29 million                                                                 
                           state dollars. Total funding has                                                                     
                           increased by $11 million dollars through                                                             
                           additional federal funding. This is the                                                              
                           result of a change of the state/federal                                                              
                           match ratio to 1/3 from 1/1.                                                                       
796 Mr. Easton             Noted that statute change has allowed                                                                
                           better capitalization of the loan fund.                                                            
821 Mr. Easton             Discussed the village safe water program.                                                          
874 Mr. Easton             Discussed the Village Safe Water Project                                                             
                           Administration request of $1,961,100                                                                 
                           million dollars. This request is a                                                                   
                           transfer from the operating budget to pay                                                            
                           for engineers and other costs of managing                                                            
                           the program.                                                                                       
899 Mr. Easton             Reviewed the request for Village Safe                                                              
                            Water Feasibility Studies. The request                                                              
                            funds subsequent allocations for                                                                    
                            feasibility studies. They are engineering                                                           
                            studies to look at options for water,                                                               
                            sewer, and solid waste facilities.                                                                
 940 Mr. Easton             Discussed Village Safe Water Projects.                                                              
                            The request funds water and sewer                                                                   
 966 Mr. Easton             In response to a question by                                                                        
                            Representative Croft, Mr. Easton                                                                    
                            explained that the $29 million dollar                                                               
                            figure did not include all of the AHFC                                                              
                            projects and was only for sanitation. The                                                           
                            four appropriations and capitalization of                                                           
                            the clean water loan fund add to $29                                                                
                            million dollars.                                                                                  
 1169 Mr. Easton            Reviewed the Municipal Water, Sewer, and                                                            
                            Solid Waste Matching Grant request. This                                                            
                            program makes grants to larger                                                                      
                            communities. Applications are ranked.                                                               
                            There is a local match requirement of 10                                                            
                            - 15 percent. It is primarily funded                                                                
                            through state funds. There are federal                                                              
                            grant funds for projects off the road                                                               
                            system at 75 percent federal and 25                                                                 
                            percent state funds.                                                                              
 1248 Representative Croft Referred to municipal grants. The grants                                                             
                            should be all state or 25 state/75                                                                  
 1299 Mr. Easton            Noted that federal funds could only be                                                              
                            used in rural communities or Alaska                                                                 
                            Native villages. The department defines                                                             
                            rural as off the road system.                                                                     
 1326 Representative Croft  Questioned why general funds are being                                                              
                            used for the Environmental Health Food                                                              
                            Safety Laboratory Construction.                                                                   
 1388 Mr. Easton            Did not know the answer and offered to                                                              
                            provide further information.                                                                      
 1405 Representative        Questioned if the department cooperated                                                             
      Hudson                with the Denali Commission on underground                                                           
                            storage tank removal and who is                                                                     
                            responsible. He noted that 470 funds are                                                            
                            being used.                                                                                       
 1433 Mr. Easton            Referred to Small Drinking Water System                                                             
                            Operator Certification Project. This is a                                                           
                            one time new appropriation. It would be                                                             
                            used to train and certify operators of                                                              
                            small drinking water systems as the                                                                 
                            result of a change in federal rules. The                                                            
                            federal rule changed the requirement for                                                            
                            a certified operator for systems serving                                                            
                            50 people to 25 people. Operators of 600                                                            
                            systems will have to be trained and                                                               
                           certified. There is no state match. Most                                                             
                           of the funds would be used to contract                                                               
                           with the University of Alaska. There are                                                             
                           federal funds to cover the cost after the                                                            
                           one-time funds are exhausted.                                                                      
1587 LARRY DIETRICK,       Responded to questions by Representative                                                             
      PROGRAM MANAGER,     Hudson. He explained that the state and                                                              
      PREVENTION AND       federal programs are coordinated on rural                                                            
      EMERGENCY RESPONSE   bulk fuel replacements. The projects are                                                             
     PROGRAM, DEPARTMENT funded through Trans-Alaska Pipeline                                                                   
      OF ENVIRONMENTAL     Liability (TAPL) funds. He noted that a                                                              
      CONSERVATION         portion of the TAPL funds are                                                                        
                           appropriated through AIDEA and a portion                                                             
                           comes from the federal government through                                                            
                           the Denali Commission. Those projects                                                                
                           that are furthest from compliance are                                                                
                           addressed first. The project list is run                                                             
                          through AIDEA.                                                                                      
1703 Mr. Dietrick          Reviewed the request for Statewide                                                                   
                           Contaminated Sites Cleanup. The request                                                              
                           is for $5 million dollars from the Oil                                                               
                           and Hazardous Substance Release                                                                      
                           Prevention and Response Fund. This                                                                   
                           request addresses problems at state owned                                                            
                           facilities, state leaking underground                                                                
                           sites and orphaned sites.                                                                          
1736 Mr. Dietrick          Discussed the request for Hazardous                                                                  
                           Material Response Capabilities for Local                                                             
                           Government. The funding source is the Oil                                                            
                           and Hazardous Substance Release                                                                      
                           Prevention and Response Fund. The funds                                                              
                           go to local communities to equip them to                                                             
                           assist the state response. The funding                                                               
                           goes to the hazmat teams in Anchorage and                                                            
                           Fairbanks. These teams can leave their                                                               
                           jurisdiction to go to any area in the                                                                
1827 Representative        Asked if there are many occasions where                                                              
      Hudson               the state has to assist.                                                                           
1856 Mr. Dietrick          Responded that there have been three                                                                 
                           ammonia releases in the last 18 months to                                                            
                           2 years.                                                                                           
1872 Representative        Questioned if overhead costs are tracked                                                             
      Hudson               for the site cleanup.                                                                              
1889 Mr. Dietrick          The $5 million dollars for state cleanup                                                             
                           goes entirely to cleanup.                                                                          
1900 Mr. Dietrick          Discussed the request for Grants and                                                                 
                           Loans for Underground Storage Tanks. The                                                             
                           funding source for the $1 million dollars                                                            
                           request is the Storage Tank Assistance                                                               
                           Fund. He observed that SB 128 imposed new                                                            
                           network requirement, which reduced the                                                               
                           number of eligible applicants. This would                                                          
                            fund grants under SB 128. Applicants were                                                           
                            reduced from 200 down to 51.                                                                      
 1988 Mr. Dietrick          Discussed the request for Oil and Gas                                                               
                            Transportation: Aging Infrastructure                                                                
                            Issues. The request for $500 thousand                                                               
                            dollars would be funded from the Oil and                                                            
                            Hazardous Substance Release Prevention                                                              
                            and Response Fund. He noted that the                                                                
                            infrastructure would have to support on                                                             
                            going production of oil. Issues need to                                                             
                            be addressed to prevent spills. He noted                                                            
                            that a Cook Inlet risk assessment would                                                             
                            occur. The department is also looking at                                                            
                            corrosion and erosion and evaluating the                                                            
                            best available technology to be used in                                                             
                            spill prevention.                                                                                 
 2059 Mr. Dietrick          In response to a question by Vice-Chair                                                             
                            Bunde, Mr. Dietrick explained that                                                                  
                            erosion is occurring due to the sand.                                                             
                            Discussion ensued regarding the 2 cents                                                             
                            tax. The tax has been shut off since                                                                
                            1995. There is approximately $59 million                                                            
                            in the Oil and Hazardous Substance                                                                  
                            Release Prevention and Response Fund.                                                             
 2139 TOM CHAPPLE,          Discussed the Fine Particulate Monitoring                                                           
      DIRECTOR, DIVISION    Project request. It is in response to a                                                             
      OF AIR AND WATER      new federal air-monitoring standard. The                                                            
      QUALITY, DEPARTMENT project determines if the state meets the                                                             
      OF ENVIRONMENTAL      standard.                                                                                         
 2192 Mr. Chapple           Reviewed the Environmental Monitoring and                                                           
                            Assessment Program request. The request                                                             
                            would fund a baseline study of conditions                                                           
                            along the coastline for contaminates. The                                                           
                            project is a random sampling and is 100                                                             
                            percent federally funded.                                                                         
 2252 Mr. Chapple           Discussed the Amchikta Workers Health                                                               
                            Assessment Project request. The project                                                             
                            would focus on the health of workers that                                                           
                            were present during the testing. The                                                                
                            Department of Environmental Conservation                                                            
                            is working with the Department of Labor                                                             
                            and Workforce Development. It is a three-                                                           
                          year project.                                                                                       
 2306 Representative        Clarified that this would be the first                                                              
      Hudson                year of the project. He questioned if the                                                           
                            project would be through contract.                                                                
 2326 Mr. Chapple           Responded that the project is almost                                                                
                            entirely done outside of the department                                                             
                            through contract. The department has a                                                              
                            minor role in the steering committee.                                                             
 2347 Representative        Questioned why the federal government                                                               
      Lancaster             does not do the project.                                                                          
2359 Mr. Chapple           Observed that it has been difficult to                                                               
                           get Congressional funding. Alaska is                                                                 
                           pushing the project.                                                                               
2375 Representative John Summarized that that state prefers to                                                                  
      Davies               handle the project.                                                                                
      TAPE HFC 01 - 65,                                                                                                       
      Side B                                                                                                                  
                           DEPARTMENT OF TRANSPORTATION AND PUBLIC                                                              
30    NANCY SLAGLE,        Discussed the safety Inspection of State                                                             
      DIRECTOR, DIVISION   Owned High Risk Facilities request. She                                                              
      OF ADMINISTRATIVE    noted that there have been incidents,                                                                
     SERVICES, DEPARTMENT which have indicated that there are                                                                   
      OF TRANSPORTATION    structural issues. There are 50 state-                                                               
      AND PUBLIC           owned buildings in the high or moderate                                                              
      FACILITIES           risk category. 10 - 15 buildings could be                                                            
221 Ms. Slagle             Discussed the Material Stockpiles for the                                                            
                           Dalton Highway request. The request would                                                            
                           allow the state to maintain the road                                                                 
                           where it is not federally eligible.                                                                
317 Ms. Slagle             Reviewed the Harborview Development                                                                  
                           Center request. The request would allow                                                              
                           continuation of the mothballing of the                                                               
                           portion of the facility that is not being                                                            
      Representative       Noted that there has not been a plan by                                                              
      Harris               the city. The hospital is still housed in                                                            
                           the building and the city has some                                                                   
540 Representative John Questioned if the state would have an on-                                                               
      Davies               going cost.                                                                                        
555 Ms. Slagle             Responded that the city would cover the                                                              
                           cost of the used portion. The state would                                                            
                           watch over the mouth-balled area at a                                                                
                           minor cost. The city is contemplating                                                                
                           building a new hospital, in which case                                                               
                           the state would address the building as a                                                            
636 Ms. Slagle             Discussed the Weights and Measures                                                                   
                           Testing Unit Replacement request. She                                                                
                           observed that a control and testing unit                                                             
                           needs to be replaced. The current vehicle                                                            
                           is 30 years old.                                                                                   
738 Representative John Questioned if the vehicles were part of                                                                 
      Davies               the state equipment fleet.                                                                         
788 Ms. Slagle             Responded that they are not part of the                                                              
                           fleet. Both are old vehicles and                                                                     
                           expensive to replace.                                                                              
826 Ms. Slagle             Reviewed the Alaska Marine Highway System                                                            
                           Overhaul, Rehabilitation and Mandatory                                                               
                           Training request. This is an annual                                                                
                            request to keep the vessels safe. The                                                               
                            vessels receive 5 - 6 weeks of overhaul                                                             
                            on an annual bases. There are also funds                                                            
                            for repairs at the Ketchikan warehouse                                                              
 924 Ms. Slagle             Discussed the Facilities Deferred                                                                   
                            Maintenance and Critical Repairs request.                                                           
                            There are $40 million dollars in deferred                                                           
                            maintenance needs. She observed that the                                                            
                            top priorities are addressed.                                                                     
 1017 Ms. Slagle            In response to a question by                                                                        
                            Representative Harris, Ms. Slagle noted                                                             
                            that over the last 4 years the department                                                           
                            has received from $600 thousand dollars                                                             
                            to $1 million dollars for deferred                                                                  
                            maintenance. The request has generally                                                              
                            been $1 to $1.5 million dollars.                                                                  
 1108 Representative Croft Observed that the state is falling                                                                   
                            further behind each year.                                                                         
 1164 Ms. Slagle            Agreed and noted that some stations are                                                             
                            becoming so bad that they need to be                                                                
 1185 Ms. Slagle            Discussed the Emergency and Non-Routine                                                             
                            Repairs request. She observed that the                                                              
                            repairs could affect harbors, airport or                                                            
                            roads. Juneau / Haines storm damage was                                                             
                            funded from this component.                                                                       
 1293 Ms. Slagle            Reviewed the Corps of Engineers Harbors                                                             
                            Program. She observed that the Unalaska                                                             
                            project is included and would use a local                                                           
                            match. These projects are separate from                                                             
                            the Governor's bill. They would provide                                                             
 1364 Ms. Slagle            Discussed the Harbor Deferred Maintenance                                                           
                            request. The request would address                                                                  
                            harbors that are not ready for local                                                                
                            ownership in the Governor's bill.                                                                 
 1415 Representative        Clarified that the state has not had to                                                             
      Harris                continue funding repairs at harbors that                                                            
                            have been turned over to local                                                                      
                            communities. Local communities can set                                                              
                            their own fees. He concluded that                                                                   
                            deferred maintenance is an important                                                                
 1516 Ms. Slagle            Reviewed the Airport Deferred Maintenance                                                           
 1558 Ms. Slagle            Discussed the Highway Deferred                                                                      
                            Maintenance request. This is an annual                                                              
                            request that addresses items that are not                                                           
                            covered with federal funds.                                                                       
 1579 Ms. Slagle            Reviewed the State Equipment Fleet                                                                  
                            Replacement request. The state owns                                                               
                           75,000 vehicles. This allows for                                                                     
1627 Representative        Questioned if the vehicles are bought in                                                             
      Lancaster            state.                                                                                             
1639 Ms. Slagle            Noted that the vehicles are sent to bid.                                                             
                           They are awarded to the low bidder.                                                                
1674 THOMAS BRIGHAM,       Noted that there are 102 federally funded                                                            
      DIRECTOR, DIVISION   aviation projects. There is $154 million                                                             
      OF STATEWIDE         dollars for aviation improvement, $43.5                                                              
      PLANNING, DEPARTMENT million dollars international airport                                                                
    OF TRANSPORTATION    funds, and $113.2 million dollars in                                                                   
      AND PUBLIC           bonds. The typical match is 6 percent for                                                            
      FACILITIES           aviation. Surface transportation projects                                                            
                           typically have a 9 - 10 percent state                                                                
                           match: a total of $41 million dollars.                                                             
1780 Representative John Pointed out that $41 million dollars is a                                                              
    Davies               large portion of the state's capital                                                                   
1815 Vice-Chair Bunde      Stated that the state could refuse the                                                               
                           federal funds and use the state match for                                                            
                           deferred maintenance.                                                                              
1844 ADJOURNMENT           The meeting was adjourned at 3:05 p.m.                                                             

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