Legislature(2013 - 2014)HOUSE FINANCE 519

01/28/2013 01:30 PM FINANCE

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01:31:21 PM Start
01:34:21 PM Fy 14 Governor's Department Overview: Department of Natural Resources
02:43:38 PM Fy 14 Governor's Budget Overview: Department of Transportation and Public Facilities
03:24:32 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
Heard & Held
+ Governor's FY14 Budget Overview: TELECONFERENCED
- Dept. of Natural Resources
- Dept. of Transportation & Public Facilities
+ Bills Previously Heard/Scheduled TELECONFERENCED
HOUSE BILL NO. 65                                                                                                             
     "An  Act making  appropriations for  the operating  and                                                                    
     loan  program  expenses  of state  government  and  for                                                                    
     certain   programs,    capitalizing   funds,   amending                                                                    
     appropriations,   and   making  reappropriations;   and                                                                    
     providing for an effective date."                                                                                          
HOUSE BILL NO. 66                                                                                                             
     "An  Act making  appropriations for  the operating  and                                                                    
     capital    expenses   of    the   state's    integrated                                                                    
     comprehensive mental health  program; and providing for                                                                    
     an effective date."                                                                                                        
Co-Chair   Austerman   stated   that   the   House   Finance                                                                    
Subcommittee  on Health  and Social  Services had  met as  a                                                                    
committee  as a  whole on  January 23  for the  Department's                                                                    
budget overview. He related that  because all the members of                                                                    
the House  Finance Committee  sat on  the Health  and Social                                                                    
Services  (DHSS) Subcommittee,  the  overview  would not  be                                                                    
repeated;  however,  the  minutes  from  the  House  Finance                                                                    
Subcommittee's  DHSS Budget  Overview would  be included  in                                                                    
the  current  meetings  minutes.  [Note:  Minutes  from  the                                                                    
January 23,  2013 Department of  Health and  Social Services                                                                    
Subcommittee DHSS  Budget Overview  are attached at  the end                                                                    
of this meeting.]                                                                                                               
^FY  14   GOVERNOR'S  DEPARTMENT  OVERVIEW:   DEPARTMENT  OF                                                                    
NATURAL RESOURCES                                                                                                               
1:34:21 PM                                                                                                                    
ED  FOGELS,  DEPUTY   COMMISSIONER,  DEPARTMENT  OF  NATURAL                                                                    
RESOURCES,  began  the  budget overview,  "State  of  Alaska                                                                    
Department  of  Natural Resources"(copy  on  file).discussed                                                                    
slide 4  "State of Alaska Department  of Natural Resources."                                                                    
The  slide  detailed  the  department's  core  services  and                                                                    
included the mission statement:                                                                                                 
     Article  8,  Section  1   of  the  Alaska  Constitution                                                                  
     •"It  is  the policy  of  the  State to  encourage  the                                                                    
     settlement  of  its land  and  the  development of  its                                                                    
     resources  by making  them  available  for maximum  use                                                                    
     consistent with the public interest."                                                                                      
     DNR Mission Statement:                                                                                                   
     •Responsibly develop Alaska's  resources by making them                                                                    
     available for  maximum use and benefit  consistent with                                                                    
     the public interest.                                                                                                       
     DNR Core Services:                                                                                                       
     1.  Foster responsible  commercial development  and use                                                                    
     of state  land and  natural resources,  consistent with                                                                    
     the   public  interest,   for   long-term  wealth   and                                                                    
     2.  Provide  access  to  state  lands  for  public  and                                                                    
     private use, settlement, and recreation                                                                                    
     3.  Ensure sufficient  data acquisition  and assessment                                                                    
     of land  and resources  to foster  responsible resource                                                                    
     4. Mitigate  threat to the public  from natural hazards                                                                    
     by providing comprehensive  fire protection services on                                                                    
     state,  private,  and   municipal  lands,  and  through                                                                    
     identifying significant geological hazards                                                                                 
1:36:19 PM                                                                                                                    
Mr. Fogels spoke to slide 5, which provided the                                                                                 
department's land management details:                                                                                           
     Land Ownership                                                                                                           
     •Federal Land: More than 200 million acres                                                                                 
     •State Land:  Approx. 100 million acres  of uplands, 60                                                                    
     million acres of tidelands,  shore lands, and submerged                                                                    
     lands, and 40,000 miles of coastline                                                                                       
     •Native Corporation Land: 44 million acres                                                                                 
     •Manages  one of  the largest  portfolios of  oil, gas,                                                                    
     minerals, renewable  resources, water, and land  in the                                                                    
     •Manages  all  oil  and  gas   fields  on  state  land,                                                                    
     including  two of  the largest  oil and  gas fields  in                                                                    
     North America                                                                                                              
     •Oversees all activities that occur on state land                                                                          
Mr.  Fogels pointed  to slide  6, "Alaska  as a  Storehouse:                                                                    
Hydrocarbons."   Compared   to   most  basins,   Alaska   is                                                                    
relatively underexplored, with 500  exploration wells on the                                                                    
North  Slope,  compared  to   Wyoming's  19,000.  The  slide                                                                    
further detailed:                                                                                                               
     North Slope                                                                                                              
     USGS estimates  that Alaska's North Slope  has more oil                                                                    
     than any other Arctic nation                                                                                               
        · OIL: Est. 40 billion barrels of conventional oil                                                                    
          (USGS & BOEMRE)                                                                                                       
        · GAS: Est. over 200 trillion cubic feet of                                                                           
          conventional natural gas (USGS)                                                                                       
     •Alaska   has  world-class   unconventional  resources,                                                                    
     including  tens of  billions of  barrels of  heavy oil,                                                                    
     shale oil,  and viscous oil, and  hundreds of trillions                                                                    
     of  cubic  feet  of  shale  gas,  tight  gas,  and  gas                                                                    
        · Positive methane hydrate test production                                                                              
     Cook Inlet                                                                                                               
     USGS  estimates that  significant undiscovered  volumes                                                                    
     of hydrocarbons remain to be found in the Cook Inlet:                                                                      
     •19 trillion cubic feet of natural gas                                                                                     
     •600 million barrels of oil                                                                                                
     •46 million barrels of natural gas liquids                                                                                 
1:36:36 PM                                                                                                                    
Mr. Fogels discussed slide 7, "Alaska as a Storehouse-                                                                          
Strategic & Critical Minerals":                                                                                                 
     The State of  Alaska Ranks in the Top Ten  in the World                                                                  
     for Important Minerals, Including:                                                                                       
     •Coal: 17 percent of the  world's coal; 2nd most in the                                                                  
     •Copper: 6 percent  of the world's copper;  3rd most in                                                                  
     the world                                                                                                                  
     •Lead: 2 percent of the world's lead; 6th most in the                                                                    
     •Gold: 3 percent of the world's gold; 7th most in the                                                                    
     •Zinc: 3 percent of the world's zinc; 8th most in the                                                                    
     •Silver: 2 percent of the world's silver; 8th most in                                                                    
     the world USGS estimates                                                                                                   
     According to the USGS, Alaska has over 70 occurrences                                                                    
     of Rare Earth Elements (REE).                                                                                            
1:36:42 PM                                                                                                                    
Mr. Fogels spoke to slides 8 through 11, "State of Alaska-                                                                      
DNR has 7 divisions":                                                                                                           
     1. Division of Agriculture (DoA)                                                                                       
          •Franci Havemeister, Director                                                                                         
         •47 full and part-time budgeted positions                                                                              
          •4.6% of DNR's FY14 Operating Budget Request                                                                          
          •$7,760.8 budget request (all sources)                                                                                
          •Promotes   and  encourages   development  of   an                                                                    
          agriculture industry in Alaska                                                                                        
     2. Division of Forestry (DoF)                                                                                          
          •Chris Maisch, Director                                                                                               
          •276 full  and part-time budgeted  positions (does                                                                    
          not include the hundreds of fire season crews)                                                                        
          •27.5% of DNR's FY14 Operating Budget Request                                                                         
          •$46,737.3 budget request (all sources)                                                                               
          •Serves  Alaskans  through forest  management  and                                                                    
          wildland fire protection                                                                                              
     3. Division of Geological & Geophysical Surveys (DGGS)                                                                 
          •Bob Swenson, Director                                                                                                
         •55 full and part-time budgeted positions                                                                              
          •5.6% of DNR's FY14 Operating Budget Request                                                                          
          •$9,468.5 budget request (all sources)                                                                                
          •Determines  the  potential  of Alaskan  land  for                                                                    
          production   of  metals,   minerals,  fuels,   and                                                                    
          geothermal resources,  the locations  and supplies                                                                    
          of groundwater and  construction material, and the                                                                    
          potential  geologic hazards  to buildings,  roads,                                                                    
          bridges, and other installations                                                                                      
          State of Alaska                                                                                                       
          DNR has 7 Divisions                                                                                                   
     4. Mining Land and Water                                                                                               
          •Brent Goodrum, Director                                                                                              
          •227 full and part-time budgeted positions                                                                            
          •16.8% of DNR's FY14 Operating Budget Request                                                                         
          •$28,631.2 budget request (all sources)                                                                               
          •Provides for  the appropriate use  and management                                                                    
          of  Alaska's state  owned land  and water,  aiming                                                                    
          toward  maximum  use  consistent with  the  public                                                                    
     5. Oil & Gas                                                                                                           
          •Bill Barron, Director                                                                                                
          •100 full and part-time budgeted positions                                                                            
          •10.1% of DNR's FY14 Operating Budget Request                                                                         
          •$17,138.5 budget request (all sources)                                                                               
          •Responsible for  the leasing  of state  lands for                                                                    
          oil, gas, and geothermal exploration                                                                                  
     6. Parks & Outdoor Recreation                                                                                          
          •Ben Ellis, Director                                                                                                  
          •185 full and part-time budgeted positions                                                                            
          •9.6% of DNR's FY14 Operating Budget Request                                                                          
          •$16,399.1 budget request (all sources)                                                                               
          •Provides  outdoor  recreation  opportunities  and                                                                    
          conserves  and interprets  natural, cultural,  and                                                                    
          historic  resources for  the  use, enjoyment,  and                                                                    
          welfare of the people                                                                                                 
     7. Support Services                                                                                                    
          •Jean Davis, Director                                                                                                 
          •130 full and part-time budgeted positions                                                                            
          •7.7% of DNR's FY14 Operating Budget Request                                                                          
          •$13,162.6 budget request (all sources)                                                                               
          •Provides  client-focused,   efficient  and  cost-                                                                    
          effective  financial,  budget, procurement,  human                                                                    
          resource,  information  technology  and  recording                                                                    
          services to DNR and the public                                                                                        
          State of Alaska DNR has 7 Divisions                                                                                   
     Office of the Commissioner                                                                                             
          •Dan Sullivan, Commissioner                                                                                           
          •10 full-time budgeted positions                                                                                      
          •1.00% of DNR's FY14 Operating Budget Request                                                                         
          •$1,712.3 budget request (all sources)                                                                                
1:38:16 PM                                                                                                                    
Mr. Fogels pointed to slides 12 and 13, "State of Alaska-                                                                       
DNR Offices":                                                                                                                   
     Gas Pipeline Project Office                                                                                            
     •Eric Hatleberg, Acting Director                                                                                           
     •7 full-time budgeted positions                                                                                            
     •1.8% of DNR's FY14 Operating Budget Request                                                                               
     •$2,997.8 budget request (all sources)                                                                                     
     •Monitors efforts by the  Alaska Pipeline Project (APP)                                                                    
     to  design, develop,  construct and  operate a  48-inch                                                                    
     natural  gas  pipeline  to  commercialize  North  Slope                                                                    
     natural gas                                                                                                                
     State Pipeline Coordinator's Office                                                                                      
     •Mike Thompson, State Pipeline Coordinator                                                                                 
     •30 full and part-time budgeted positions                                                                                  
     •4.6% of DNR's FY13 Operating Budget Request                                                                               
     •$7,870.1 budget request (all sources)                                                                                     
     •Issues leases  of state  land for  pipeline rights-of-                                                                    
     ways  and implements  the state's  policy set  forth in                                                                    
     Alaska   Statute   (AS)    38.35.010   concerning   the                                                                    
     development,   use,   and   control   of   a   pipeline                                                                    
     transportation system within the state                                                                                     
     Office of Project Management & Permitting                                                                              
     •Tom Crafford, Director                                                                                                    
     •16 full-time budgeted positions                                                                                           
     •4.7% of DNR's FY14 Operating Budget Request                                                                               
     •$7,964.3 budget request (all sources)                                                                                     
     •Coordinates  the review  of larger  scale projects  in                                                                    
     the state                                                                                                                  
     Alaska Mental Health Trust Land Office                                                                                 
     •Greg Jones, Executive Director                                                                                            
     •18 full and part-time budgeted positions                                                                                  
     •2.4% of DNR's FY14 Operating Budget Request                                                                               
     •$3,996.1 budget request (all sources)                                                                                     
     •Protecting and  enhancing the  value of  Alaska Mental                                                                    
     Health  Trust  Lands  while  maximizing  revenues  from                                                                    
     those lands over time                                                                                                      
1:39:47 PM                                                                                                                    
Mr. Fogels  addressed slide 14, "Key  Performance Measures."                                                                    
The  slide showed  the  increase in  the  Dollars that  were                                                                    
committed to  memorandums of  understanding with  the Office                                                                    
of  Project  Management  and Permitting  for  large  project                                                                    
coordination. With each  year that passed by  there was more                                                                    
activity in  the state  and the  department served  a useful                                                                    
and  valuable  service  in coordinating  the  permitting  of                                                                    
Mr. Fogels  spoke to slide  15, "Key  Performance Measures."                                                                    
The  slide illustrated  the monetary  value of  agricultural                                                                    
products sold  in Millions. The Division  of Agriculture was                                                                    
not  directly  responsible   for  the  performance  measure;                                                                    
however, the  department looked to  it in order  to increase                                                                    
awareness of  Alaska Grown products  and market  options, as                                                                    
well as to expand gross product sales.                                                                                          
1:41:08 PM                                                                                                                    
Mr. Fogels  discussed slide 16, "Key  Performance Measures."                                                                    
The  slide charted  Alaska boating  fatalities. the  boating                                                                    
safety program had reduced the  number of boating fatalities                                                                    
in the state.                                                                                                                   
1:41:32 PM                                                                                                                    
JOE  BALASH,  DEPUTY  COMMISSIONER,  DEPARTMENT  OF  NATURAL                                                                    
RESOURCES,  discussed  slide  18, "Secure  Alaska's  Future:                                                                    
Oil." He  related that  declining oil  through TAPS  was the                                                                    
most critical economic issue facing the state:                                                                                  
     •TAPS has transported over 16.3  billion barrels of oil                                                                    
     and natural gas liquids  since June of 1977. Production                                                                    
     peaked  at 2.2  million  barrels per  day  in the  late                                                                    
    1980s, representing 25% of U.S. domestic production                                                                         
     •Since  its  peak,  however,  throughput  has  steadily                                                                    
     declined; today, TAPS is 2/3  empty and declining at 6%                                                                    
     per year                                                                                                                   
     •TAPS throughput decline  threatens economic disruption                                                                    
     and the very existence of our pipeline                                                                                     
     •We must  encourage industry  to invest  in exploration                                                                    
     and  development  of  conventional  and  unconventional                                                                    
     resources  on  state  and  federal  land,  onshore  and                                                                    
     •TAPS has plenty of capacity for increased throughput                                                                      
     •Most  near-term  critical  economic issue  facing  the                                                                    
     •Less oil  in the pipeline  year after year  takes away                                                                    
     revenue from future generations-the ultimate giveaway                                                                      
1:43:17 PM                                                                                                                    
Mr. Balash addressed slide 19, "Secure Alaska's Future:                                                                         
Oil." The slide listed the state's comprehensive strategy                                                                       
to increase TAPS throughput to one million barrels per day:                                                                     
     I.   Enhance   Alaska's  global   competitiveness   and                                                                    
     investment climate                                                                                                         
     II.  Ensure the  permitting process  is structured  and                                                                    
     III.  Facilitate and  incentivize  the  next phases  of                                                                    
     North Slope development                                                                                                    
     IV. Promote Alaska's  resources and positive investment                                                                    
     climate to world markets                                                                                                   
1:44:20 PM                                                                                                                    
Mr. Balash pointed to slide 20, "Cook Inlet, NS & Beaufort                                                                      
Sea Lease Sales." He related that the strategy was proving                                                                      
     Cook Inlet, 2011 & 2012 Lease Sales                                                                                      
     •In June  2011, the  state received the  highest number                                                                    
     of Cook  Inlet lease  sale bids  in 28  years, totaling                                                                    
     over $11 million                                                                                                           
          oTotal tracts sold: 108                                                                                               
          oTotal high bonus bids: $10,986,826.20                                                                                
     •In May 2012,  Cook Inlet lease sale  bids totaled more                                                                    
     than $6.8 million                                                                                                          
          oTotal tracts sold: 44                                                                                                
          oTotal high bonus bids: $6,865,835                                                                                    
     NS & Beaufort Sea, 2011 & 2012 Lease Sales                                                                               
     •In  December  2011,  the  Division   of  Oil  and  Gas                                                                    
     received more than 300 bids  from more than 15 bidders,                                                                    
     totaling more  than $21 million, signifying  one of the                                                                    
     most successful sales in recent Alaska history                                                                             
          oTotal tracts sold: 239                                                                                               
          oTotal high bonus bids: $18,712,945.98                                                                                
     •In November 2012, bids for all areas totaled more                                                                         
     than $14 million with tracts sold in the Foothills                                                                         
     area for the first time since 2009                                                                                         
          oTotal tracts sold: 122                                                                                               
          oTotal high bonus bids: $14,240,333.73                                                                                
     •State needs billions of dollars in new investment to                                                                      
    meet the Governor's one-million-barrels-a-day goal                                                                          
1:45:13 PM                                                                                                                    
Mr.  Balash discussed  slide 21,  "North  Slope: Recent  and                                                                    
Proposed Activity."  The slide  illustrated North  Slope oil                                                                    
and  gas activity  in 2012.  He relayed  that the  state had                                                                    
parties  looking into  the full  range of  resources on  the                                                                    
slope,  both in  the  legacy  fields and  in  new areas.  He                                                                    
pointed out that a very  small improvement in a legacy filed                                                                    
far surpassed the  arrival of new production  in new fields.                                                                    
He stressed that the state's  legacy partners were important                                                                    
and should not be forgotten.                                                                                                    
Mr. Balash pointed to slide 22,  "Next Phases & New Areas of                                                                    
Exploration for  NS Oil and  Gas." He noted that  while some                                                                    
fields  were  maturing,  the  basin  itself  was  relatively                                                                    
underexplored.  The  slide   listed  opportunities  for  the                                                                    
     •Shale oil exploration - ongoing                                                                                           
          oJuly 31st conference in Anchorage on Shale Oil                                                                       
     •Shell finally was able to drill its first exploratory                                                                     
     wells in the Beaufort and Chukchi Seas                                                                                     
     •Record of federal permitting delays should be a                                                                           
     continued source of concern for the State                                                                                  
     •Eastern North Slope open, PT settled                                                                                      
          oPT permits issued by the State and the Corps of                                                                      
     •Linc Energy drilling operations at Umiat are moving                                                                       
     •New players, operators and exploration on state land                                                                      
          oShell, Repsol, Brooks Range, Great Bear, Savant                                                                      
          oExxon Mobil, Conoco Phillips                                                                                         
     •These   developments,   while   positive,   are   just                                                                    
     scratching the surface of our overall potential                                                                            
1:47:45 PM                                                                                                                    
Mr. Balash  spoke to slides  23 and 24, "Cook  Inlet-Oil and                                                                    
Gas Activity":                                                                                                                  
     •Legislative tax and investment incentives are working                                                                     
     •Old and  new players exploring and  investing: Apache,                                                                    
     Hilcorp,  Armstrong,  Linc, Buccaneer,  Nordaq,  Furie,                                                                    
     Cook Inlet Energy, ConocoPhillips, CIRI                                                                                    
     •Hundreds of millions invested in 2012                                                                                     
     •Dramatic increase in  number of drill rigs  in inlet -                                                                    
     either idle, available or stacked                                                                                          
          oIn November 2006, 9 rigs                                                                                             
          oIn November 2009, 12 rigs                                                                                            
          oIn November 2012, 17 rigs (includes 2 jack-up                                                                        
     •Companies shooting major 3-D  seismic over large areas                                                                    
     of the basin                                                                                                               
          oNever previously done at this scale with this                                                                        
          sophisticated technology                                                                                              
          oPresents huge opportunities for development                                                                          
     •New gas storage project on  line; important for supply                                                                    
     security  and more  steady  year-round production,  and                                                                    
     peak availability                                                                                                          
     •Attractive price for gas relative  to Lower 48 markets                                                                    
     - but challenged by a relatively small market                                                                              
     •State   continues  to   focus  on   safe,  responsible                                                                    
     development and operations                                                                                                 
Mr. Balash  stated that the state  owed a lot to  Cook Inlet                                                                    
Sedimentary Basin; it  paved the way to statehood  and was a                                                                    
hotbed of activity  during the 1950's and  1960's, until the                                                                    
discovery of  Prudhoe Bay in  1968. Consequentially,  all of                                                                    
the  attention was  redirected to  the North  Slope and  for                                                                    
three decades  Cook Inlet was  forgotten. In recent  years a                                                                    
consolidation had been seen in  the existing assets with the                                                                    
arrival of new and credible players attracted by incentives                                                                     
created by the legislature.                                                                                                     
1:50:23 PM                                                                                                                    
Mr. Balash addressed slide 25, "Commercializing NS Gas:                                                                         
2012 State of the State and Benchmarks":                                                                                        
     Key principles for any project                                                                                         
     •Gas to  address Alaska's  in-state needs  for abundant                                                                    
     supplies of low-cost energy and economic growth                                                                            
     •Gas  that  will  maximize the  value  of  the  state's                                                                    
     massive  resource base  through high-volume  and export                                                                    
     •A   project   that    incentivizes   exploration   and                                                                    
     investment in continued oil and gas development                                                                            
     Governor's Roadmap to Gasline                                                                                          
     1. Resolve Point Thomson                                                                                                   
     2. Align during the first quarter of 2012                                                                                  
     3.   Two   projects-under    AGIA   and   AGDC-complete                                                                    
     discussions by  third quarter of 2012  determining what                                                                    
     potential exists to consolidate projects                                                                                   
     4.  Harden numbers  on  an Alaska  LNG  project by  the                                                                    
     third quarter of 2012, and  identify a pipeline project                                                                    
     and associated work schedule                                                                                               
     5. If  milestones are met,  the 2013  Legislature takes                                                                    
     up  gas tax  legislation designed  to move  the project                                                                    
1:52:04 PM                                                                                                                    
Mr. Balash discussed slides  26 through 29, "Commercializing                                                                    
NS Gas Significant Progress." Slide  26 showed a letter from                                                                    
the Chief  Executive Officers of  ExxonMobil, ConocoPhillips                                                                    
and  British Petroleum.  He noted  the call  out box  on the                                                                    
slide which highlighted key points:                                                                                             
          "Serious discussions between our companies have                                                                       
     taken place  over the past  several months,  along with                                                                    
     the  Alaska  Pipeline  Project (APP)  parties  who  are                                                                    
     supporting  the  AGIA License.  We  have  aligned on  a                                                                    
     structured, steward able  and transparent approach with                                                                    
     the  aim  to  commercialize  North  Slope  natural  gas                                                                    
     resources within an AGIA framework.  As a result of the                                                                    
     rapidly evolving  global market,  large-scale liquefied                                                                    
     natural  gas (LNG)  exports  from south-central  Alaska                                                                    
     will be assessed as an  alternative to gas lone exports                                                                    
     through  Alberta.  In  addition  to  broadening  market                                                                    
     access, a south-central Alaska  LNG approach could more                                                                    
     closely align  with in-state  energy demand  and needs.                                                                    
     We   are    now   working    together   on    the   gas                                                                    
     commercialization  project   concept  selection,  which                                                                    
     would include an associated  timeline and an assessment                                                                    
     of   major   project  components   including   in-state                                                                    
     pipeline routes and capacities,  global LNG trends, and                                                                    
     LNG tidewater site locations, among others."                                                                               
Mr. Balash spoke to slide 27, which contained a second                                                                          
letter from the same three companies. He noted key points:                                                                      
          "On March 30, 2012, ExxonMobil, ConocoPhillips                                                                        
     and BP submitted a letter  informing you of progress in                                                                    
     working together on the next  generation of North Slope                                                                    
     resource  development.  Since   that  time,  the  three                                                                    
     producer   companies  and   TransCanada,  through   its                                                                    
     participation  in the  Alaska  Pipeline Project  (APP),                                                                    
     have maintained  momentum and executed  important early                                                                    
     work  to  select  leading   concepts  for  a  potential                                                                    
     project. We are  writing to update you  on the progress                                                                    
     that has been made to date.                                                                                                
     We  have  narrowed  the   broad  range  of  alternative                                                                    
     development   concepts  and   assessed  major   project                                                                    
     components, including that  gas pipeline, gas treatment                                                                    
     to  remove  CO2  and   other  impurities,  natural  gas                                                                    
     liquefaction,   LNG   storage,  and   marine   terminal                                                                    
     facilities as described  on Attachment 2. Individually,                                                                    
     each of these components  would represent a world-class                                                                    
     project.  Combined, they  result in  a mega-project  of                                                                    
     unprecedented scale  and challenge;  up to  1.7 million                                                                    
     tons of steel,  a peek construction workforce  of up to                                                                    
     15,000, a permanent workforce of  over 1,000 in Alaska,                                                                    
     and an estimated  total cost in today's  dollars of $45                                                                    
     to $65+ billion."                                                                                                          
Mr. Balash continued to Slide 28 which discussed the key                                                                        
factor of commercializing the development of Point Thomson:                                                                     
     The State  of Alaska  has made significant  progress on                                                                  
     commercializing North Slope gas                                                                                          
     •Much of the upstream infrastructure is in place                                                                           
     •There  is a  renewed  focus from  key stakeholders  on                                                                    
    monetizing the massive reserves of North Slope gas                                                                          
     •Hundreds  of millions  of dollars  have been  spent on                                                                    
     critical engineering  and environmental  regulatory and                                                                    
     commercial work required for a gas project                                                                                 
     WSJ: Alaska, Gas Firms Clear Way For Pipeline                                                                            
     Point  Thomson   settlement  "…paves  the  way   for  a                                                                    
     pipeline  project to  ship natural  gas from  the North                                                                    
     Slope, unleashing the state's  massive gas reserves." -                                                                    
     WSJ, 3/30/12                                                                                                               
     FT: Oil Groups Agree on $40bn Alaska Gas Project                                                                         
     "ExxonMobil,   BP  and   ConocoPhillips  have   reached                                                                    
     agreement  with   the  state   of  Alaska  to   take  a                                                                    
     significant  step forward  on a  $40bn-plus project  to                                                                    
     export  liquefied  natural  gas to  Asia,  resolving  a                                                                    
     long-running  lease dispute  that had  been holding  up                                                                    
     In a  joint letter, the  chief executives of  the three                                                                    
     companies  said  they  were  "aligned"  on  a  plan  to                                                                    
     develop the huge gas reserves  of Alaska's North Slope,                                                                    
     which until now  have been stranded without  a route to                                                                    
     market." - Financial Times, 3/30/12                                                                                        
Mr.  Balash continued  to slide  29, which  further detailed                                                                    
the  progress that  had been  made in  commercializing North                                                                    
Slope gas. He  turned to slides 30  and 31, "Commercializing                                                                    
NS Gas Point Thomson":                                                                                                          
     •Point Thomson is a multi-billion dollar project                                                                           
     •Beginning construction now                                                                                                
     •Producing  Point Thomson  liquid condensate  into TAPS                                                                    
     as part of Phase 1                                                                                                         
     •Big prize - gas commercialization for LNG                                                                                 
     •Significant portion of  infrastructure being built for                                                                    
    Phase 1 is applicable to a gas line or LNG project                                                                          
     •Three     phases    of     development    in     2012:                                                                    
     explaining/defending   settlement;    permitting;   and                                                                    
     getting to work                                                                                                            
1:56:06 PM                                                                                                                    
Mr. Balash spoke to slide  32 titled "Commercializing NS Gas                                                                    
Comparative  Advantages."   He  said  that   the  department                                                                    
believed  that these  were  advantages  that positioned  the                                                                    
state well in the marketplace:                                                                                                  
     •The North  Slope of Alaska  is estimated to  have over                                                                    
     200 trillion cubic feet of conventional gas                                                                                
     •Conventional  gas is  not controversial-unconventional                                                                    
     gas in the Lower 48 U.S. states remains controversial                                                                      
     •35 trillion cubic feet of known reserves                                                                                  
     •Prudhoe Bay reinjects 8 billion  cubic feet of gas per                                                                    
     day, which is enough to meet Canada's daily gas needs                                                                      
     •These numbers  do not include  the trillions  of cubic                                                                    
     feet  of  shale  gas,  tight   gas,  and  gas  hydrates                                                                    
     estimated for the North Slope                                                                                              
     •This  is an  almost inexhaustible  supply of  gas with                                                                    
     new technology                                                                                                             
     •North  Slope  gas is  "wet"  gas  with a  high  energy                                                                    
     content (BTU value)                                                                                                        
     •An  Alaska  LNG  project  has  complete  certainty  of                                                                    
     supply; not all other projects do                                                                                          
Mr. Balash stressed that it was important that Alaska LNG                                                                       
be in high demand in the global market. He listed other                                                                         
comparative advantages of Alaska LNG:                                                                                           
     •Existing  oil  and  gas infrastructure  on  the  North                                                                    
    Slope can be utilized for a large-scale LNG project                                                                         
     •The route for  a large-scale LNG project  would be the                                                                    
     same  or  similar  to  the  existing  Trans-Alaska  Oil                                                                    
     Pipeline route,  which will  save on  costs and  have a                                                                    
     limited impact on the environment                                                                                          
     •Alaska  has  a   longstanding  tradition  of  reliably                                                                    
     exporting LNG to Asia                                                                                                      
          oAlaska has been exporting LNG to Japan for over                                                                      
          40 years                                                                                                              
          oAlaska has transported 2.5 trillion cubic feet                                                                       
          of gas to Asia (the majority to Japan) over this                                                                      
          oAlaska has never missed a LNG cargo shipment to                                                                      
     •  Alaska  is  the  only place  in  the  United  States                                                                    
     exporting LNG                                                                                                              
     •Alaska  does  not  use   gas  supplies  for  political                                                                    
     •Avoids  strategic  shipping  choke points  that  other                                                                    
     sources of LNG must traverse                                                                                               
     •Benefits from  American legal and  political stability                                                                    
     and the rule of law                                                                                                        
     •No looming conflicts in the region                                                                                        
     •Proximity/shipping costs are very low                                                                                     
     •Use  of existing  infrastructure  and pipeline  routes                                                                    
     reduces costs                                                                                                              
     •Cold   weather  efficiencies   significantly  decrease                                                                    
     processing costs compared to warmer climates                                                                               
1:57:45 PM                                                                                                                    
Mr. Balash addressed slide 34, which highlighted the                                                                            
difference in distance on the water between Alaska and                                                                          
potential LNG customers.                                                                                                        
Co-Chair Austerman noted for the record that Representative                                                                     
Gara and Representative Wilson had joined the committee.                                                                        
1:58:23 PM                                                                                                                    
Mr. Fogels addressed slide 35, "Secure Alaska's Future:                                                                         
Strategic and Critical Minerals":                                                                                               
     Objective:   To   highlight  Alaska's   potential   for                                                                  
     exploration, development,  and processing  of strategic                                                                  
     and  critical minerals,  including Rare  Earth Elements                                                                  
     "Secure  Alaska's  Future:  Strategic  Minerals"  is  a                                                                  
     comprehensive strategy that will:                                                                                        
     I.  Undertake   a  statewide  assessment   of  Alaska's                                                                    
     strategic mineral potential-millions  budgeted for this                                                                    
     II.  Provide support  for the  development of  known or                                                                    
     highly   prospective   strategic  mineral   occurrences                                                                    
     throughout  Alaska through  infrastructure partnerships                                                                    
     and incentives                                                                                                             
     III.   Improve   the   structure  and   efficiency   of                                                                    
     permitting  processes  in  order  to  expedite  mineral                                                                    
     development, including strategic minerals                                                                                  
     IV.  Deepen   partnership  and  cooperation   with  the                                                                    
     federal    government,   local    governments,   Native                                                                    
     corporations,  and  other  potential  new  entrants  to                                                                    
     encourage   domestic   exploration,  development,   and                                                                    
     processing of REEs and other strategic minerals                                                                            
     V.  Attract new  investment  and  markets for  Alaska's                                                                    
     abundant mineral resources                                                                                                 
1:59:17 PM                                                                                                                    
Mr. Fogels discussed slide 36, "Strategic and Critical                                                                          
Minerals: Recent Mining Activity":                                                                                              
     In  2011,  the  gross  mineral  production  value  from                                                                  
     Alaska  totaled  $3.8  billion,   up  16%  since  2010.                                                                  
     Mineral  ore production  had an  export  value of  $1.8                                                                  
     billion in 2011, nearly 40% of Alaska's total exports.                                                                 
     •Producing Mines in Alaska                                                                                               
        · Red Dog: one of the world's largest zinc mines,                                                                     
          produced over 555k tons of zinc and 78k tons of                                                                       
          lead in 2011                                                                                                          
        · Greens Creek: among the world's top 10 silver                                                                       
          mines, produced over 9.48 million ounces of                                                                           
          silver, 56k ounces of gold, and 73k tons of zinc                                                                      
          in 2011                                                                                                               
       · Pogo: produced 356k ounces of gold in 2011                                                                           
        · Fort Knox: produced 289.8k ounces of gold in 2011                                                                   
        · Usibelli: produced a record 2.2 million tons of                                                                     
          low  sulfur coal  in 2011,  exporting half  of its                                                                    
        · Nixon Fork: gold and copper mine re-opened in                                                                       
          2011  and   still  in   pre-commercial  production                                                                    
        · Kensington: 2011 was first year of production for                                                                   
          this new gold mine-produced 88,420 ounces of gold                                                                     
Mr. Fogels spoke to slide 37, "Strategic and Critical                                                                           
Minerals: Recent Mining Activity":                                                                                              
     In  2011,  mineral  exploration  investment  in  Alaska                                                                  
     totaled $365  million - accounting for  about one-third                                                                  
     of the total spent on exploration in the U.S.                                                                            
     •Advanced exploration projects include:                                                                                    
          ·  Donlin: ~ 42.3 million ounces of gold (the only                                                                  
             project currently in the permitting phase)                                                                         
          ·  Pebble: ~ 80.6 billion pounds  of copper, 107.4                                                                  
             million ounces of gold, and 5.6 billion pounds                                                                     
             of molybdenum                                                                                                      
          ·  Bokan   Mountain:    enriched    in    yttrium,                                                                  
             dysprosium, and critical heavy Rare Earth                                                                          
          · Money Knob: ~20.6 million ounces of gold                                                                          
          ·  Niblack:  ~7.3  million  tons  of  polymetallic                                                                  
             (copper, gold, silver, and zinc) volcanogenic                                                                      
             massive sulfide project                                                                                            
     •30 exploration projects spent over  $1 million each in                                                                    
     •$2.8 billion has been spent  on mineral exploration in                                                                    
     Alaska since 1981                                                                                                          
2:00:30 PM                                                                                                                    
Mr. Fogels discussed slide 38, "Strategic and Critical                                                                          
Minerals: Statewide Assessment and Outreach":                                                                                   
     •State  is   undergoing  a  statewide   assessment  for                                                                    
     strategic  and critical  minerals -  $2.7M appropriated                                                                    
     in FY2013  budget (and $2.7M  requested to  continue in                                                                    
          · One of largest undertakings in the country                                                                          
          ·  Looking to work  with other public  and private                                                                    
          · Information will be made available to public                                                                        
     •Held  first  "Alaska  Strategic  &  Critical  Minerals                                                                    
     Summit" in Fairbanks in 2011. The event had:                                                                               
          · Huge turnout                                                                                                        
          · Very favorable national press                                                                                       
2:01:17 PM                                                                                                                    
Mr. Fogels addressed slide 39, "Strategic and Critical                                                                          
Mineral: Statewide Assessment and Outreach":                                                                                    
     •Held  second  annual   "Alaska  Strategic  &  Critical                                                                    
     Minerals Summit" in Fairbanks  on November 30, 2012, at                                                                    
     the Fairbanks Princess Riverside Lodge                                                                                     
     •Speakers included:                                                                                                        
          · State and Federal Government Officials and a                                                                        
             representative from Japan Oil, Gas and Metals                                                                      
             National Corporation (JOGMEC)                                                                                      
          · University of Alaska                                                                                                
          · Native Corporation leaders                                                                                          
          · Private Industry                                                                                                    
Mr. Fogels announced that the summit would be an annual                                                                         
Mr. Fogels spoke to slide 40, "Permitting Reform: Statewide                                                                     
     Objective:  Improve the  State  of Alaska's  permitting                                                                  
     processes in  order to advance  the public  interest by                                                                  
     ensuring   projects   are   permitted  in   a   timely,                                                                  
     predictable  and  efficient manner  while  safeguarding                                                                  
     the environment.                                                                                                         
     DNR has been working with  a team from DNR, DEC, ADF&G,                                                                  
     and LAW to develop and advance strategies that aim to:                                                                   
     I. Improve  agencies' internal permitting  structure to                                                                    
     create a more efficient, timely, and certain process                                                                       
     II.   Enhance  coordination   within  different   state                                                                    
     departments   and    with   different    entities   and                                                                    
     stakeholders throughout the state                                                                                          
     III. Seek  input from the  public about  the permitting                                                                    
     process including  input from  municipalities, industry                                                                    
     and non-governmental organizations                                                                                         
     IV.  Improve coordination  between  the  state and  the                                                                    
     federal  government-federal  permitting issues  have  a                                                                    
     strong influence on state projects                                                                                         
     V. Anticipate  and plan for permitting  the next phases                                                                    
     of resource development, e.g. the Shale Oil Task Force                                                                     
2:03:54 PM                                                                                                                    
Mr. Fogels spoke to slide 41, "Permitting Reform:                                                                               
Significant Progress":                                                                                                          
     ·  In FY12, the Legislature provided approximately $2.7                                                                    
        million in  operating  funds  for  the  Division  of                                                                    
        Mining,  Land   &   Water   to  create   efficiency,                                                                    
        timeliness and certainty in the permitting process                                                                      
     ·  We are  utilizing capital  funding from  FY12 ($2.5M                                                                    
        for  the   Unified  Permit   Project  and   Document                                                                    
        Management) to focus on business management software                                                                    
        and services                                                                                                            
     ·  In FY13, the  Legislature approved  the continuation                                                                    
        of FY12 operating funds as part  of the ongoing base                                                                    
        for permitting  and an  additional  $950.0 to  cover                                                                    
        increased personnel costs and  fill vacant positions                                                                    
        focused on permitting                                                                                                   
          o FY13 capital budget included $3.3M to continue                                                                      
             work on the Unified Permit Project, including                                                                      
             the continuation of IT strategies and Business                                                                     
             Process Management                                                                                                 
     · Permitting Reform Significant Progress                                                                                   
     · We have filled and trained new and vacant positions                                                                      
     ·  We  reclassified  and   updated  over   50  position                                                                    
     ·  Since the beginning  of FY12,  the backlog  has been                                                                    
        reduced by 38.2% (1,015 authorizations)                                                                                 
     ·  We have  conducted  public  meetings  statewide  for                                                                    
        input on state permitting processes                                                                                     
     ·  We are evaluating internal processes to identify and                                                                    
        fix inefficiencies                                                                                                      
Mr. Fogels discussed slide 42, "Permitting Reform:                                                                              
Statutory Changes":                                                                                                             
     2012 Legislature - HB361                                                                                                 
     •The  Division of  Mining,  Land  and Water  identified                                                                    
     over  30  statutory  changes  that  would  help  reduce                                                                    
     applicant    costs,    create   efficiencies,    reduce                                                                    
     redundancies,  and   reduce  opportunities   for  legal                                                                    
     •During  the  2012  Legislative session,  the  Governor                                                                    
     introduced HB 361, which  included the highest priority                                                                    
     changes related  to leasing and disposal  programs that                                                                    
     would  help   reduce  the  permitting  burden   on  the                                                                    
     applicant  and free  more  time for  staff  to work  on                                                                    
     processing applications                                                                                                    
     •HB 361 was passed and signed by the Governor                                                                              
2:05:44 PM                                                                                                                    
Mr. Fogels addressed slide 43, "Agriculture: 2012 Overview                                                                      
of Accomplishments":                                                                                                            
The Division of Agriculture continues to be very busy                                                                         
promoting and encouraging development of the agriculture                                                                      
industry in Alaska                                                                                                            
     •Worked  to  increase  the   demand  for  Alaska  grown                                                                    
     products; created strong advocacy  for the Alaska grown                                                                    
     program throughout the state                                                                                               
     •Deepened  DNR cooperation  and  coordination with  the                                                                    
     farming community                                                                                                          
     •Explored  new  marketing  ventures to  promote  Alaska                                                                    
     Grown  program; instituted  Restaurant Rewards  Program                                                                    
     to encourage the use of local produce                                                                                      
     •Provided  support and  promotion  to  over 40  Farmers                                                                    
     Markets throughout  the state,  which continue  to grow                                                                    
     in popularity                                                                                                              
     •Farm  to School  Program is  recognized as  a national                                                                    
          oProgram  is  actively engaged  in  47  out of  54                                                                    
          school  districts; 100%  of  the school  districts                                                                    
          have  received  the Alaska  Seasonal  Availability                                                                    
          Chart.   Five  recipes   utilizing  Alaska   Grown                                                                    
          products have been developed that meet federal                                                                        
          school meal requirements.                                                                                             
     •Sold 1,327 acres of agricultural  land in the Northern                                                                    
     •Added 52 new farms to the Alaska Grown user list                                                                          
     •Published  the Alaska  Forage  Manual  (2012) and  was                                                                    
     nationally recognized  for the  following publications:                                                                    
     Alaska Coastal  Revegetation and Erosion  Control Guide                                                                    
     (2010)  &   Interior  Alaska  Revegetation   &  Erosion                                                                    
     Control Guide (2012)                                                                                                       
2:07:14 PM                                                                                                                    
Mr. Fogels discussed slide 44, Parks and Outdoor                                                                                
Recreation: 2012 Overview of Accomplishments":                                                                                  
Serves the Alaska public through outdoor recreation,                                                                          
educational programming, and access to public lands                                                                           
     •Recruited,  hired  and  trained  more  than  700  park                                                                    
     volunteers who  donated more than  95,000 hours  to the                                                                    
     park system-a cash value of more than $2 million                                                                           
     •Permitted  1,104  individuals  to  provide  commercial                                                                    
     recreational  services  in   state  park  areas,  which                                                                    
     resulted in millions of dollars  in direct and indirect                                                                    
     economic benefit to the state                                                                                              
          oIn  2011   (the  most  recent   data  available),                                                                    
          sportfish   guide  businesses   operating  in   10                                                                    
          different state park  areas generated approx. $7.7                                                                    
          million  in   revenue;  businesses   that  offered                                                                    
          guided hikes in 14  different park areas generated                                                                    
          approx. $790,000 in revenue                                                                                           
     •Lower  Chatanika   SRS  was  reinstated   into  active                                                                    
    management thanks to local and legislative support                                                                          
     •3 new  public use cabins  in Southeast (2  Eagle Beach                                                                    
     SRA,  1  Juneau  Channel Islands  SMP);  PUC  occupancy                                                                    
     increased 9% and overnight camping increased 3%                                                                            
     •4 "Arts in the Parks" events statewide                                                                                    
     •National honors,  including: Joe  McCullough, National                                                                    
     Boating Safety Educator of the  Year, and Judy Bittner,                                                                    
     Dept.  of Interior  National  Partners in  Conservation                                                                    
Mr. Fogles addressed slide 45, "Forestry-Timber Resources:                                                                      
2012 Overview of Accomplishments":                                                                                              
     Alaska has 17% of the nation's forest land                                                                               
     •Finished  final report  for  Governor's Alaska  Timber                                                                    
     Jobs Task  Force per AO  258; report makes  35 specific                                                                    
     recommendations that  span 8  substantive areas  of the                                                                    
     industry sector                                                                                                            
     •Sold  18,786,000 board  feet of  lumber to  34 Alaskan                                                                    
     •Provided direct and indirect  support to over 80 woody                                                                    
     biomass  projects  - this  is  important  work that  is                                                                    
     assisting  many small,  remote  communities and  larger                                                                    
     roadside  communities  that  are struggling  with  high                                                                    
    energy costs for space heating and electrical needs                                                                         
     •Continue  to work  through the  State Tongass  Team to                                                                    
     provide  coordinated  comments  to USFS  in  regard  to                                                                    
     federal timber  sales in the Tongass  National Forest-a                                                                    
     continual challenge                                                                                                        
     •Worked  with  Department  of   Law  to  support  their                                                                    
     efforts in  appealing the invalidated  Tongass National                                                                    
     Forest  exemption from  the Roadless  Rule  in the  9th                                                                    
     •New   marketing  tag   line:   "Triple  Bottom   Line:                                                                    
     Environment, Economy and Communities"                                                                                      
2:09:15 PM                                                                                                                    
Mr. Fogels spoke to slide 46, "Forestry - Wildland Fires:                                                                       
2012 Overview and Accomplishments":                                                                                             
     •Contained  95%  of  the fires  in  Critical  and  Full                                                                    
     Protection Options at 10 acres  or less during the 2012                                                                    
     •Responded to  late-season wildfires in  Dillingham and                                                                    
     the Mat-Su Valley                                                                                                          
     •Provided  assistance to  Municipality of  Anchorage in                                                                    
     response to  extreme wind  and rain  events and  to the                                                                    
     Mat-Su Borough in response to flooding                                                                                     
     •Played   a  major   role  in   providing  firefighting                                                                    
     assistance   to   the   lower  48   states   during   a                                                                    
     particularly difficult fire season for the Nation                                                                          
     •Provided  a   critical  tactical  asset  for   use  by                                                                    
     wildland fire  managers in the  form of  fire retardant                                                                    
     air tankers to supplement  the USFS national air tanker                                                                    
     fleet that has shrunk to an inadequate fleet                                                                               
     •Instructed  40 rural  students in  basic fire-fighting                                                                    
     and 34  students in advanced  fire-fighting at  the Tok                                                                    
     Wildland Fire Academy                                                                                                      
Mr. Balash spoke to slide 48, "2013 Legislative Session &                                                                       
Beyond: Oil Tax Reform":                                                                                                        
     •The  Governor has  been  encouraged  by the  consensus                                                                    
     that has emerged over the past year                                                                                        
     •Alaska  should be  in the  forefront of  this American                                                                    
     energy  renaissance rather  than  watch oil  production                                                                    
     continue to ebb                                                                                                            
     •Alaskans agree that something needs to be done                                                                            
     •Implementing  comprehensive  plan-tax  reform  remains                                                                    
     Core Principles of Tax Reform:                                                                                         
     •Must be fair to Alaskans                                                                                                  
     •Encourage new production                                                                                                  
     •Simple so that it restores balance to the system                                                                          
     •Durable for the long term                                                                                                 
     Status quo  favored by some  is unfair to  Alaskans and                                                                    
Mr. Balash addressed slide 49, "2013 Legislative Session                                                                        
and Beyond: Other Efforts":                                                                                                     
     Gas Commercialization                                                                                                  
     •Governor's new benchmarks in 2013 State of the State                                                                      
     •We  will  work  to  accelerate  gas  line  development                                                                    
     because of our urgent need for in-state energy                                                                             
     •The window of opportunity to  sell Alaska LNG to Asian                                                                    
     markets will not be open indefinitely                                                                                      
     •Global competition is fierce                                                                                              
     •Continued work on demand-pull                                                                                             
     Permitting Reform                                                                                                      
     •Progress  has  been  made but  we  will  again  pursue                                                                    
     significant legislative efforts  to create efficiencies                                                                    
     by  streamlining  processes, reduce  redundancies,  and                                                                    
     reduce opportunities for legal challenges                                                                                  
     •Introduction  by  Governor  of  HB 77  builds  on  our                                                                    
     comprehensive  reform  efforts;   critical  to  state's                                                                    
     Promoting the State                                                                                                    
     •Mineral  Exploration  Roundup  Conference,  Vancouver,                                                                    
     January 28-31, 2013                                                                                                        
     •North American  Prospect Expo, Houston,  February 5-8,                                                                    
     •"Alaska Grown" produce                                                                                                    
     •Alaska  State  Parks  hosting   "Arts  in  the  Parks"                                                                    
     throughout the summer                                                                                                      
     •Example: Oil & Gas Journal feature on Alaska                                                                              
2:12:38 PM                                                                                                                    
JEAN DAVIS, DIRECTOR,  SUPPORT SERVICES DIVISION, DEPARTMENT                                                                    
OF  NATURAL  RESOURCES, discussed  slide  51,  "DNR FY  2014                                                                    
Budget: Employees and Budget Structure":                                                                                        
     •DNR currently employs about 1,100 Alaskans in full-                                                                       
     time and seasonal positions, with main offices in                                                                          
     Anchorage, Juneau, Fairbanks and Palmer, and regional                                                                      
     offices throughout the state                                                                                               
     •The  budget  structure reorganization  implemented  by                                                                    
     the Legislature in FY2012  has simplified the reporting                                                                    
     and presentation  of the budget. The  FY2014 Governor's                                                                    
     budget retains this structure.                                                                                             
2:13:48 PM                                                                                                                    
Ms. Davis  discussed slide 52,  "DNR FY 2014  Budget: Budget                                                                    
Growth  Analysis (Prepared  by Legislative  Finance)", which                                                                    
contained a  bar graph that  reflected DNR's share  of total                                                                    
agency operations, general  fund only. Between FY  05 and FY                                                                    
14  DNR's  general  fund  budget grew  by  $40  million,  an                                                                    
average growth  rate of  5.3 percent.  The share  of general                                                                    
fund for DNR  when compared to all state  agency budgets was                                                                    
2 percent, down from 2.63 in FY 06.                                                                                             
2:14:29 PM                                                                                                                    
Ms. Davis  spoke to  slide 53, "DNR  FY 2014  Budget: Budget                                                                    
Growth  Analysis (Prepared  by Legislative  Finance)", which                                                                    
contained a bar graph reflecting  DNR's percent of the total                                                                    
department's  budget by  funded  group,  all funds.  General                                                                    
funds were 61 percent of the  total budget in FY 05 and were                                                                    
63 percent of the FY 14 Governor's budget.                                                                                      
Ms. Davis  spoke to  slide 54, "DNR  FY 2014  Budget: Budget                                                                    
Growth  Analysis (Prepared  by Legislative  Finance)", which                                                                    
was  a   line  graph   that  illustrated   the  department's                                                                    
continued budget  growth, general fund only,  compared to 10                                                                    
- year plan.  The dark black line was  the annual management                                                                    
plan,  the green  dotted line  was the  continuation of  5.3                                                                    
percent  annual growth,  and the  dotted black  line charted                                                                    
DNR's 10 - year plan with initiatives.                                                                                          
Ms. Davis  discussed slide 55,  "DNR FY 2014  Budget: Budget                                                                    
Growth  Analysis (Prepared  by Legislative  Finance)", which                                                                    
contained  a  line  graph  that  detailed  the  department's                                                                    
continued budget  growth, all funds,  compared to 10  - year                                                                    
Ms. Davis  addressed slide 56,  "DNR FY14  Budget: Operating                                                                    
Budget  by  Core  Services," which  contained  a  pie  chart                                                                    
offering  the  percentages  of  core  service  distribution:                                                                    
foster  responsible  development,  provide access  to  state                                                                    
lands,  sufficient  data  acquisition  and  assessment,  and                                                                    
mitigate natural hazard threats.                                                                                                
2:16:55 PM                                                                                                                    
Ms. Davis spoke to slide  57, "DNR FY 2014 Budget: Operating                                                                    
Budget by Division/Office." The  slide contained a pie chart                                                                    
that broke down the operating  budget funds by division. The                                                                    
FY  13  authorized operating  budget  was  $167, 522.5;  the                                                                    
request  for  FY 14  was  $169,952.3.  She noted  that  Fire                                                                    
Suppression was contained within the Division of Forestry.                                                                      
Ms.  Davis  pointed  to  slide  58,  "DNR  FY  2012  Budget:                                                                    
Operating  Budget   by  Core   Services,"  which   showed  a                                                                    
breakdown  of  core  services by  the  four  funding  source                                                                    
groups.  She   shared  that  Legislative   Finance  Division                                                                    
characterized  the governor's  request  into two  scenarios:                                                                    
adjusted  base and  the governor's  new  request items.  The                                                                    
chart  showed the  comparison from  what the  department was                                                                    
currently  operating under  and the  adjusted base.  The key                                                                    
differences were outlined  at the bottom of  the slide. One-                                                                    
time  items had  been backed  out of  the adjusted  base and                                                                    
would be considered a new request if reinstated.                                                                                
2:18:55 PM                                                                                                                    
Ms.  Davis   discussed  slide  59,  "DNR   FY  2014  Budget:                                                                    
Operating  Budget by  Core Services."  The slide  showed the                                                                    
adjusted base on the left  side and the governor's budget on                                                                    
the right. The middle portion  showed a 5.1 percent increase                                                                    
in general  funds form the  adjusted base to  the governor's                                                                    
request. She noted the key  changes in the bottom portion of                                                                    
the slide.  The first  five were  a restoration  of one-time                                                                    
items  and amounted  to  approximately  $3.4 million.  Below                                                                    
that line  were the  new items  requested by  the department                                                                    
for FY 14.                                                                                                                      
2:20:07 PM                                                                                                                    
Ms.  Davis addressed  slide 60,  which listed  the operating                                                                    
budget highlights,  or the critical  changes in  the budget.                                                                    
The  changes  were  listed by  initiative;  Secure  Alaska's                                                                    
Future-Oil,  Strategic  Minerals, Gasline,  Permitting,  and                                                                    
2:22:40 PM                                                                                                                    
Ms.  Davis  pointed  to  slide 61,  which  listed  the  same                                                                    
initiatives as capital budget highlights.                                                                                       
Mr. Fogels concluded with slide, 62:                                                                                            
     •The FY2014 Budget reflects our focus on DNR's core                                                                        
     services and the Administration's major statewide                                                                          
     •Many challenges and opportunities                                                                                         
     •Opportunities far outweigh the challenges, in large                                                                       
    measure due to our abundant natural resource wealth                                                                         
     •Partnerships    are    key:   public,    stakeholders,                                                                    
     legislature, private sector, Administration                                                                                
2:23:22 PM                                                                                                                    
Representative Wilson  discussed the graph on  slide 57. She                                                                    
asked whether  "Fire Suppression" meant what  the state paid                                                                    
to put out wildfires.                                                                                                           
Mr. Fogels responded that managing  the forests was probably                                                                    
a  component to  preventing forest  fires, but  that it  was                                                                    
dependent on where the fires broke out.                                                                                         
Representative Wilson queried  whether DNR communicated with                                                                    
other agencies to explore better forest management.                                                                             
Mr.  Fogels responded  that the  wildfire fighting  force in                                                                    
the state was  a combination of local,  municipal, and state                                                                    
agencies. He  offered a  more thorough  briefing at  a later                                                                    
2:25:10 PM                                                                                                                    
Vice-Chair  Neuman noted  the increase  in the  department's                                                                    
budget  size.   He  queried   whether  the   department  had                                                                    
projected any  revenue streams to the  state in anticipation                                                                    
of developed resources.                                                                                                         
Mr. Balash  replied that the  department did  have estimates                                                                    
on  increased  oil  royalties  due to  the  oil  tax  reform                                                                    
effort.  He stated  that  the 5  percent  growth figure  was                                                                    
being knocked  down significantly in the  current budget. He                                                                    
related  that the  department's  budget growth  was at  just                                                                    
over 2 percent.                                                                                                                 
2:27:45 PM                                                                                                                    
Vice-Chair Neuman asked if the  department had estimated out                                                                    
the opportunities for the state  to diversify income revenue                                                                    
Mr. Fogels  responded that the  department had taken  a look                                                                    
at  all  the  different  divisions  in  order  to  determine                                                                    
revenue streams.  He said that  the department  work further                                                                    
with the committee on the issue.                                                                                                
2:29:24 PM                                                                                                                    
Representative Kawasaki  queried the  amount of  the request                                                                    
for  the   Hunting  Guide   Concession.  He   asked  whether                                                                    
statutory language would be needed to make a change.                                                                            
Mr.  Fogels replied  that the  department, along  with DF&G,                                                                    
was  working to  craft a  guide concession  program for  the                                                                    
state. The states past exclusive  guide area system had been                                                                    
deemed  illegal by  the Supreme  Court.  The department  had                                                                    
been working on the program  for many years and were working                                                                    
to create regulations for the program.                                                                                          
2:32:02 PM                                                                                                                    
Representative Kawasaki  noted that  he had expected  to see                                                                    
an  impact  in DNR's  budget  from  the dismantling  of  the                                                                    
Coastal Zone Management Program.                                                                                                
Mr.  Balash  replied  that the  program  had  been  directed                                                                    
through  the department  and  had  been part  of  the FY  12                                                                    
budget. The adjustments were made  in the FY 12 budget cycle                                                                    
and had  no specific increment or  decrement associated with                                                                    
the  program  for  the  FY  13  budget.  The  division  that                                                                    
formerly  ran the  program had  been responsible  for grants                                                                    
that were not being  administratively run through the Office                                                                    
of Project Management and Permitting.                                                                                           
Representative   Gara  asked   about  how   the  number   of                                                                    
exploration wells compared over the last 5 years.                                                                               
Mr. Balash answered that it  depended on how you counted the                                                                    
wells. He offered to get the numbers to the committee.                                                                          
Representative Gara  asked whether there was  an expectation                                                                    
about  when the  maximum  would be  reached for  hydrocarbon                                                                    
liquids  and if  projection could  be found  in the  revenue                                                                    
Mr. Balash replied  that the pipeline would  have a capacity                                                                    
of 70,000 barrels per day;  in 2016 the expectation was that                                                                    
there  would  be  10,000  barrels  per  day  of  condensates                                                                    
recovered  at   Point  Thomson   and  shipped   through  the                                                                    
2:37:52 PM                                                                                                                    
Representative  Munoz wondered  whether  the department  had                                                                    
improved due to  the closure of the  Coastal Zone Management                                                                    
Mr. Balash responded that one  of the losses with the demise                                                                    
of the  program was the  loss of the  coordination function.                                                                    
The department had  been able to pick up some  of that slack                                                                    
through  the Office  of Project  Management and  Permitting.                                                                    
With   regard  to   local   governments  specifically,   the                                                                    
department had  executed a memorandum of  understanding with                                                                    
the North Slope Borough  and involved quarterly meeting with                                                                    
the  borough  mayor  and the  commissioner's  offices,  with                                                                    
monthly meetings at  the staff level. Issues  of concern and                                                                    
importance  to  the  borough  were   kept  in  mind  as  the                                                                    
department  made decisions.  He said  that the  coordination                                                                    
had resulted  in several jointly signed  letters between the                                                                    
borough  mayor  and the  commissioner;  one  on the  federal                                                                    
permitting of  Point Thomson, another  was a request  to the                                                                    
Department  of the  Interior  for  a seat  at  the table  to                                                                    
undertake reviews of Shell's OCS program.                                                                                       
2:41:16 PM                                                                                                                    
AT EASE                                                                                                                         
2:42:47 PM                                                                                                                    
2:43:28 PM                                                                                                                    
^FY   14   GOVERNOR'S   BUDGET   OVERVIEW:   DEPARTMENT   OF                                                                  
TRANSPORTATION AND PUBLIC FACILITIES                                                                                          
2:43:38 PM                                                                                                                    
PAT KEMP, ACTING COMMISSIONER, DEPARTMENT OF TRANSPORTATION                                                                     
AND PUBLIC FACILITIES, related that he would be giving a                                                                        
brief overview of the department. He introduced staff.                                                                          
Commissioner Kemp discussed slide 2, "Mission":                                                                                 
     "Get    Alaska     moving    through     service    and                                                                  
     To do this we:                                                                                                             
     •Provide for the safe and efficient movement of people                                                                     
     and goods                                                                                                                  
     •Provide access to state services                                                                                          
     •Open opportunities for exploration and development of                                                                     
     Alaska's resources                                                                                                         
2:45:10 PM                                                                                                                    
Commissioner   Kemp    spoke   to   slide    3,   "Statutory                                                                    
     •AS 44.42 Department of Transportation and Public                                                                          
     •AS 44.68.010 Use of State-owned Vehicles                                                                                  
     •AS 44.68.210 Highway Equipment Working Capital Fund                                                                       
     •AS 35 Public Buildings, Works, and Improvements                                                                           
     •AS 19 Highways and Ferries                                                                                                
     •AS 19.10 State Highway System                                                                                             
    •AS 19.10.300 Commercial Motor Vehicle Requirements                                                                         
     •AS 19.25 Utilities, Advertising, Encroachment and                                                                         
     •AS 19.65 Alaska Marine Highway System                                                                                     
     •AS 19.65.050 Alaska Marine Highway System Fund and                                                                        
     •AS 19.75 Knik Arm Bridge and Toll Authority                                                                               
     •AS 2 Aeronautics                                                                                                          
Commissioner Kemp addressed slide 4, "Organization", which                                                                      
showed the organization flow chart of the department.                                                                           
Commissioner Kemp discussed slide 5, "DOT & PF Assets":                                                                         
     •3,186 full time positions                                                                                                 
     •Own and maintain 5,601 miles of roads/highways                                                                            
     •84 Maintenance Stations                                                                                                   
     •254 State Airports                                                                                                        
     •2 International Airports                                                                                                  
     •700 Facilities (4 million + sq. ft.)                                                                                      
     •11 ferries                                                                                                                
     •35 Ferry Terminals                                                                                                        
     •24 Harbors                                                                                                                
     •805 State Owned Bridges                                                                                                   
     •7 Weigh Stations                                                                                                          
2:47:40 PM                                                                                                                    
Commissioner Kemp spoke to slide 6, "Core Services":                                                                            
     •Construction of transportation infrastructure &                                                                           
     •Maintenance & operations of the state transportation                                                                      
     •Measurement standards/commercial vehicle enforcement                                                                      
Commissioner Kemp discussed slide 7, "Priorities":                                                                              
     •Operate and maintain safe and reliable roads,                                                                             
     airports, ferries & facilities                                                                                             
     •Ensure Alaska has the transportation infrastructure                                                                       
     necessary to grow the economy                                                                                              
     •Develop and implement efficiencies in both the                                                                            
     operating and capital budgets                                                                                              
Commissioner Kemp addressed slide 8, "Challenges":                                                                              
     •Moving Ahead for Progress 21st Century Act (MAP-21)                                                                       
     •Balancing budget against public needs, changing                                                                           
     conditions and expectations                                                                                                
     •Congestion in Anchorage and MatSu                                                                                         
     •Safety corridors                                                                                                          
     •High cost of commodities                                                                                                  
     •Getting our resources to tidewater                                                                                        
     •Federal oversight                                                                                                         
2:50:45 PM                                                                                                                    
MARY SIROKY, DIRECTOR,  DIVISION OF ADMINISTRATIVE SERVICES,                                                                    
DEPARTMENT   OF   TRANSPORTATION  AND   PUBLIC   FACILITIES,                                                                    
discussed slide  9, "Measures  & Results."  Moving clockwise                                                                    
from  top to  bottom; the  first graph  illustrated the  3 -                                                                    
year moving average percentage  change in traffic fatalities                                                                    
per 100 million  vehicle miles traveled. She  noted that the                                                                    
number  of fatalities  had been  consistently  low up  until                                                                    
2011. The  uptake was considered random  and the preliminary                                                                    
numbers for  2012 were expected  to go back down.  Graph two                                                                    
shoed  the  increase  in  highway   safety  roads  that  met                                                                    
department  standards. The  goal  of the  department was  to                                                                    
have  the national  highway system  roads meet  the national                                                                    
standards and  had been making steady  progress towards that                                                                    
end. The  bottom left  slide showed  the reduction  of rural                                                                    
airports  that  were  seasonally   closed.  Shared  that  82                                                                    
percent  of Alaska's  communities were  served primarily  by                                                                    
air  service and  to  not  have air  service  resulted in  a                                                                    
significant impact on those  communities. The department was                                                                    
working to  reduce the number of  seasonal airport closures.                                                                    
The  final slide  charted the  Alaska Marine  Highway System                                                                    
Vessel car  deck capacity utilization.  She stated  that the                                                                    
department hoped to better utilize  the car deck by marrying                                                                    
service  to   capacity.  The  department  had   made  steady                                                                    
progress towards that  end; when the department  was able to                                                                    
marry  the  right vessel  to  the  right service,  the  best                                                                    
utilizations were a result.                                                                                                     
2:54:13 PM                                                                                                                    
Ms.  Siroky  spoke  to slide  10  titled  "FY2014  Operating                                                                    
Budget."  The operating  budget request  was $635,658.8  and                                                                    
consisted  of $359,391.4  of general  funds, $272,  422.8 of                                                                    
other funds  and $3,  844.6 of federal  funds. Of  the total                                                                    
request 63 percent  of the budget was  for personal services                                                                    
and 35 percent was  services and commodities. The department                                                                    
spent a significant amount on  contracts for professional to                                                                    
take care  of rural airports, hauling  snow, street sweeping                                                                    
and road maintenance.                                                                                                           
2:55:17 PM                                                                                                                    
Ms.  Siroky pointed  to slide  11  titled "FY2014  Operating                                                                    
Budget  Funding Sources."  The  significant  portion of  the                                                                    
operating budget came from general  funds, 46 percent. Funds                                                                    
were  also   brought  in  from  the   Whittier  Tunnel  Toll                                                                    
Receipts,  Vehicle  Rental   Tax  Receipts,  Marine  Highway                                                                    
System Fund,  Federal Funds, Inter-Agency  Receipts (other),                                                                    
International  Airport   Revenue  Funds,  and   the  Highway                                                                    
Equipment Working Capital Fund.                                                                                                 
Ms. Siroky  addressed slide 12  titled "FY2014  GF Operating                                                                    
Allocations." The  Alaska Marine Highway System  (AMHS) used                                                                    
46 percent  of the  general funds  dollars in  the operating                                                                    
budget.  The second  largest portion  of the  usage was  for                                                                    
highways and  aviation. The department built  a large amount                                                                    
of  infrastructure with  federal dollars  but could  not use                                                                    
federal dollars  to maintain the marine  highway system. She                                                                    
noted that  administrative support  was a  significant piece                                                                    
of  the  pie and  included  the  Commissioner's Office,  the                                                                    
Division of Administrative Services,  Equal and Civil Rights                                                                    
enforcers,  Internal  Auditors,  Transportation  Management,                                                                    
Statewide  Aviation  Division  and  the  Administration  and                                                                    
support  services  for  each of  the  department's  regional                                                                    
2:59:42 PM                                                                                                                    
Ms.  Siroky discussed  slide  13,  "FY2014 Operating  Budget                                                                    
Changes." The  operating budget  request of  $14.182 million                                                                    
could be broken down into the following:                                                                                        
     •Salary and Health                                                                                                         
     •New Initiatives                                                                                                           
     •Impacts to Highways & Aviation                                                                                            
     •Maintain Current Level of Service (Baseline)                                                                              
     •Technical Adjustments                                                                                                     
     •One Time Items                                                                                                            
3:03:42 PM                                                                                                                    
Ms.  Siroky spoke  to slide  14,  "FY2014 DOT  & PF  Capital                                                                    
Budget." The  FY 14 capital  budget request  was $984,113.5,                                                                    
79 percent of which was made  up of federal funds. The funds                                                                    
supported   both   surface   and   aviation   transportation                                                                    
Ms. Siroky addressed slide 15,  which offered a look back at                                                                    
the department's funding over the  last 10 years. She shared                                                                    
that the federal  funding had become less and  less in terms                                                                    
of the  operating budget over  the years. She stated  that a                                                                    
change  occurred from  FY 05  to FY  06 in  undesignated and                                                                    
designated general funds.  The change was due to  a shift in                                                                    
the  budget  structure  with regard  to  the  AMHS  subsidy.                                                                    
Starting in  FY 06,  undesignated general funds  were placed                                                                    
directly  in the  AMHS budget.  Previously,  the funds  were                                                                    
placed into the AMHS funds  and the budget expended the AMHS                                                                    
fund as designated general funds.  The percentage of general                                                                    
funds was 49 percent in FY 05  and was now 58 percent in the                                                                    
FY 14 budget.                                                                                                                   
3:06:00 PM                                                                                                                    
Ms. Siroky  spoke to  slide 16,  which illustrated  that the                                                                    
department  was 17  percent of  the general  funds operating                                                                    
budget. She  related that the  yellow boxes  represented the                                                                    
fuel trigger.                                                                                                                   
Ms. Siroky discussed slide 17, "10-Year Projection Graph."                                                                      
She asserted  that the department was  diligently working to                                                                    
become  a  "flatline"  agency. She  noted  that  some  small                                                                    
growth was expected  due to the gasline.  Slide 18, "10-year                                                                    
Projection Graph", offered the general fund component.                                                                          
3:07:11 PM                                                                                                                    
Ms.  Siroky addressed  slide 19,  "Information." She  listed                                                                    
the current information on Alaska's roadways:                                                                                   
     · Weather Cameras                                                                                                          
     · Weather Watches                                                                                                          
     · Road Construction                                                                                                        
     · Future Construction                                                                                                      
     · Incidents                                                                                                                
     · Driving Conditions                                                                                                       
     · Available by Phone or on the web                                                                                         
Ms.  Siroky   relayed  that  the   Statewide  Transportation                                                                    
Improvement   Program   (STIP)    was   searchable   online.                                                                    
Additionally, the  public could  sign up to  receive notices                                                                    
from the department on "Gov Delivery" or 511.Alaska.gov.                                                                        
Co-Chair  Austerman  requested  further  discussion  on  the                                                                    
first bullet of slide 8 of the presentation.                                                                                    
Commissioner  Kemp  responded   that  the  department  would                                                                    
designate between  $70 million  and $100 million  dollars to                                                                    
the Community  Transportation Program; many projects  in the                                                                    
mill were located within the  program and the department did                                                                    
not have the funding for  construction. The funding would go                                                                    
to  the National  Highway  System  and there  was  a set  of                                                                    
performance measures that were  being crafted on the federal                                                                    
level  that  the department  would  have  to abide  by.  The                                                                    
department was  concerned by several measures;  for example,                                                                    
pavement ride.  He opined  that nowhere  else in  the nation                                                                    
were there roads constructed on  permafrost; the state could                                                                    
not  match pavement  smoothness on  the national  level. The                                                                    
department had been promised a  seat at the table during the                                                                    
rule making, but  there were still concern. He  said that by                                                                    
the  time  the rules  were  written  there  would be  a  new                                                                    
highway bill.                                                                                                                   
Co-Chair Austerman understood that  the standards had yet to                                                                    
be imposed because the rules had not been written.                                                                              
Commissioner Kemp replied in the affirmative.                                                                                   
3:10:36 PM                                                                                                                    
Vice-Chair  Neuman   asked  about   the  $171   million  for                                                                    
Community Transportation  Programs. He believed that  if the                                                                    
state  did the  projects they  would cost  considerably less                                                                    
because the  federal funds  were tied to  so many  rules. He                                                                    
understood  that with  MAP-21 if  the state  was to  receive                                                                    
federal dollars the money would  have to be spent on federal                                                                    
projects; state projects would require state funds.                                                                             
Commissioner  Kemp  replied  that  he  was  unsure  that  he                                                                    
understood  the question.  He  relayed  that the  department                                                                    
used general  funds for all  categories within the  STIP. He                                                                    
related that under the federal  guidelines, a project worked                                                                    
in steps; a project could  not be designed until the process                                                                    
had been  gone through  incrementally. A  way to  leverage a                                                                    
project was to  interject state funds; there  were many ways                                                                    
that a project could be accelerated using state funds.                                                                          
3:13:09 PM                                                                                                                    
Representative  Holmes noted  the increase  in the  de-icing                                                                    
program  and inquired  if any  alternative technologies  for                                                                    
de-icing had been considered.                                                                                                   
Ms.  Siroky responded  that  the  requirements for  de-icing                                                                    
were based on  the number of landings per years.  Not all of                                                                    
the  state's jet  airports required  de-icing.  She had  not                                                                    
heard  of any  other  means of  de-icing  than the  chemical                                                                    
solution currently being used.                                                                                                  
3:15:02 PM                                                                                                                    
Representative  Munoz inquired  how  the municipal  airports                                                                    
were handling the de-icing obligation.                                                                                          
Ms. Siroky restated that airports  without jets landing were                                                                    
not  required to  de-ice. She  said that  the airport  would                                                                    
need to  have 1,000 jet landings  per year in order  for de-                                                                    
icing to be required.                                                                                                           
Representative Munoz  inquired how the Juneau  and Ketchikan                                                                    
airports would  absorb the additional costs.  She understood                                                                    
that  the  material  was  brought in  in  liquid  form.  She                                                                    
stressed  that  the  requirement  was a  difficult  one  and                                                                    
wondered if the department had  pursued an exemption for the                                                                    
Ms. Siroky replied that she would look in to.                                                                                   
Representative Gara said that in  the past he had seen roads                                                                    
that had been  torn up and resurfaced that  hadn't seemed in                                                                    
disrepair. He wondered whether there  was a way to implement                                                                    
a standard for resurfacing roads on an as-needed basis.                                                                         
Commissioner Kemp  replied that resurfacing should  be based                                                                    
on  need  and  rut  depth  as  well  as  problems  with  the                                                                    
pavement.  He  shared that  the  department  was working  to                                                                    
implement hard  aggregate into the pavement.  He shared that                                                                    
Egan Drive,  in Juneau,  used to  need to  be paved  every 5                                                                    
years. Hard  rock was  brought up  form Haines  which bumped                                                                    
the repaving  up to  every 17 years.  He stressed  that hard                                                                    
aggregate should alleviate the issue.                                                                                           
3:19:15 PM                                                                                                                    
Representative  Gara pointed  out that  the section  of road                                                                    
between Cooper Landing and Talkeetna  was very dangerous. He                                                                    
queried why  the signs that used  to be there were  gone. He                                                                    
noted that drivers  were unaware of where  the pullouts were                                                                    
and  requested  that  signs  be added  to  that  section  of                                                                    
Commissioner Kemp  replied that  he would  be happy  to look                                                                    
into it.                                                                                                                        
3:21:28 PM                                                                                                                    
Representative  Kawasaki spoke  to slide  11. He  understood                                                                    
that the AMHS was funded by receipts.                                                                                           
Ms.  Siroky  replied that  the  revenues  were derived  from                                                                    
passenger and car fares. She  added that the system received                                                                    
and infusion of general fund dollars as well.                                                                                   
3:22:41 PM                                                                                                                    
Representative Kawasaki inquired if how the AMHS fares were                                                                     
Ms. Siroky replied that she would back to the committee                                                                         
with more details, but that she did not think that the                                                                          
fares had changed significantly in the past several years.                                                                      
3:24:14 PM                                                                                                                    
Co-Chair Austerman discussed housekeeping.                                                                                      
HB 65 was HEARD and HELD in committee for further                                                                               
HB 66 was HEARD and HELD in committee for further                                                                               
3:24:32 PM                                                                                                                    

Document Name Date/Time Subjects
DOT&PF HFC Overview 01 28 13.pdf HFIN 1/28/2013 1:30:00 PM
DOT HFIN Overview
DNR HFIN Overview 1-28.pdf HFIN 1/28/2013 1:30:00 PM
DNR HFIN Overview
DOT Overview Response 1-28-13.pdf HFIN 1/28/2013 1:30:00 PM
Dot Respnse Overview questions