Legislature(2003 - 2004)
05/15/2003 08:45 AM Senate FIN
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* first hearing in first committee of referral
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CS FOR SENATE BILL NO. 215(STA)
"An Act relating to a lease-purchase agreement for, the
construction and equipping of, and the financing of a seafood
and food safety laboratory facility to be operated by the
Department of Environmental Conservation, including the
issuance of certificates of participation, and the use of
certain investment income for certain construction and
equipping costs; and providing for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken stated that this bill, sponsored by the Senate
Rules Committee at the request of the Governor "authorizes the sale
of $14,145,000 in certificates of participation for the financing
of construction of a new seafood and food safety lab for the
Department of Environmental Conservation."
ERNESTA BALLARD, Commissioner, Department of Environmental
Conservation, read testimony into the record as follows.
Thank you for the opportunity to testify today. SB 215
provides the funding mechanism for a new Seafood and Food
Safety Laboratory. This expense has been included in the
capital budget.
As Commissioner of the department responsible for protecting
the environment and human health, I can testify to the
importance of this lab. In our seafood and food safety lab we
analyze raw, finished and value-added food products for
bacteria, chemicals, and toxic contaminants. We maintain
capabilities and FDA certifications that private labs cannot.
We operate on schedules that are not available from private
labs and can assume the greater liability needed to perform
analysis for paralytic shellfish poisoning. We cooperate with
emerging industry, such as the growing dive fisheries to be
sure time-critical water and raw product analysis is available
and market commitments are met. We are qualified to train and
certify private labs so that they can operate in established
and high-demand testing markets.
DEC has leased a facility in Palmer for 34 years. This
facility will not be available after 2006. It is overcrowded
and not fully compliant with safety codes and laboratory
design standards. It was originally placed in Palmer when the
principal lab business was agriculture and dairy. The emerging
value added seafood industries in coastal Alaska have added
significant and time-sensitive testing demands for our
service. Our proposed new lab will be in Anchorage where
valuable hours can be saved between sample collection and
testing for raw and live seafood products.
Our laboratory functions are essential to protect the health
of all Alaskans. The Governor, past legislatures, and the
Commissioners of Revenue, Department of Transportation and
Public Facilities and DEC have reviewed the design
specifications, equipment requirements and expense of this
lab. We considered alternative locations and financing
mechanisms for a modern facility sized and equipped for long
term service to the state. Specifically, we carefully
considered the possibility of locating in remodeled space at
the ASI facility in Anchorage. Our requirements would occupy
approximately 5% of that space.
The process of acquiring a new seafood and food safety lab
began seven years ago with a feasibility study. We received an
appropriation of $150,000, to obtain an independent evaluation
of both build and lease options. This analysis showed that the
most economical choice is a state owned laboratory financed
with lease/purchase bonds known as Certificates of
Participation. The legislature agreed and in 2001 appropriated
$1,300,000 to design this facility. This is a conservative and
cost conscious proposal. The building contains only laboratory
and lab support space: meeting and classroom facilities will
be available in the adjacent public health lab. The building
materials were selected for low and simple maintenance. The
design and materials are similar to the public health lab that
was built several years ago on schedule and within budget.
We are reviewing the fees the laboratory charges for services
and are comparing them to other states' fees. It is clear we
can, and should charge more. We will begin drafting the
necessary regulations this summer.
Senator Taylor spoke to earlier concerns he had about the need for
a similar laboratory located in Southeastern Alaska, specifically
to support the dive fisheries and seafood and mariculture
industries. He supported this proposal and applauded the efforts of
the commissioner.
Senator Taylor offered a motion to report the bill from Committee
with individual recommendations and accompanying fiscal notes.
Co-Chair Wilken objected for the purpose of a question.
Co-Chair Wilken asked the location of the proposed laboratory.
Commissioner Ballard replied it would be located next to the
recently constructed public health laboratory, which has adequate
meeting, training and other common spaces. She stated the proposed
facility would occupy the "minimal footprint" necessary to perform
laboratory functions, as other functions could be conducted in the
public health laboratory facility.
TOM BOUTIN, Deputy Commissioner, Department of Revenue, testified
that the State has utilized this lease financing mechanism many
times in the past and is a "well understood credit".
Co-Chair Wilken removed his objection and SB 215 (STA) MOVED from
Committee with zero fiscal note #2 from the Department of
Environmental Conservation and fiscal note #3 for $200,000 from the
Department of Revenue.
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