Legislature(2003 - 2004)
04/29/2004 09:05 AM Senate FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
SENATE BILL NO. 313
"An Act making supplemental and other appropriations; amending
appropriations; making an appropriation to capitalize a fund;
and providing for an effective date."
This was the third hearing for this bill in the Senate Finance
Committee.
Co-Chair Green reminded the Committee that during the previous
hearing on this bill, the discussion focused on the Department of
Natural Resources' and the Department of Revenue's involvement in
the endeavor to further a natural gas pipeline.
Amendment #5: This amendment inserts a new subsection into Section
14. DEPARTMENT OF NATURAL RESOURCES, page 20, line 11 as follows.
( ) The sum of $1,580,000 is appropriated from the
general fund to the Department of Natural Resources for risk
analysis related to the state gas pipeline and to bringing
North Slope natural gas to market.
( ) The sum of $3,900,000 is appropriated from the
general fund to the Department of Natural Resources for
permitting and application processing related to the state gas
pipeline right-of-way work related to bringing North Slope
natural gas to market.
In addition a new subsection is added to Sec. 16. DEPARTMENT OF
REVENUE, page 21, line 11 as follows.
( ) The sum of $3,400,000 is appropriated to the
Department of Revenue for work related to bringing North Slope
natural gas to market from the following sources:
General fund $2,400,000
Statutory designated
Program receipts 1,000,000
( ) The sum of $1,700,000 is appropriated to the
Department of Revenue for work related to bringing North Slope
natural gas to market from the following sources:
General fund $1,200,000
Statutory designated
Program receipts 500,000
For further clarification, the following language is included in
the amendment.
All the subsections added by this amendment are for capital
projects and lapse under AS 37.25.020.
The second subsection for the Department of Natural Resources,
totaling $3,900,000, is effective July 1, 2004.
The second subsection for the Department of Natural Resources,
totaling $1,700,000, is effective July 1, 2004.
Co-Chair Green moved to adopt Amendment #5.
Co-Chair Wilken objected for explanation.
Co-Chair Green explained that these funds would support the
Departments' involvement in the gas line endeavor. Adoption of the
amendment would oblige Governor Frank Murkowski's request "to move
forward" in furthering the gas pipeline project.
Co-Chair Wilken removed his objection.
There being no further objection, Amendment #5 was ADOPTED.
Co-Chair Wilken asked that the Legislative Legal and Research
Services Division be allowed to make technical changes to SB 313 as
deemed necessary.
There being no objection, the request was approved.
Co-Chair Green explained that, to date, $13 million of a total $15
million General Fund (GF) supplemental budget allowance that was
included in the FY 2004 budget, has been allocated. In prior years,
the supplemental appropriation request has been as much as $71
million. Tremendous effort has been undertaken regarding "what
truly needs to be included and what truly is important" in
determining the supplemental request amount that should be included
in the appropriation budget. She voiced appreciation to State
departments for the consideration given to the budgeting process,
the amendments to the supplemental budget, and the supplemental
requests that have been submitted.
Co-Chair Green reviewed the projects that have been added to the
bill thought the adoptions of Amendments #1 through #5.
Senator Bunde commented that, even though he did not object to
Amendment #5, he has concerns regarding the $10.5 million
expenditure. He acknowledged that the excitement of developing a
gas pipeline is a factor in the allowance of this request. However,
he declared that were other departments to submit "generalities" as
the Department of Natural Resources has, the Committee "would have
been very critical" and would have demanded more detail. While
other Departments "have been asked to be lean and mean and to do
more with less," the Committee has been incredibly flexible and
generous due to the nature of the request. In conclusion, he voiced
the "hope that our hopes are not misguided."
Co-Chair Green, noting that Senator Bunde had chaired the
Department of Natural Resources budget subcommittee, commented that
the overall Department budget is "lean and mean." It could be
argued that the State could never do enough in its endeavor to
develop its natural resources; and in that regard, the Department's
budget has been "on the shy side" in recent years. The Department
has stressed that it would attempt to generate revenue, would seek
matching funds, and would use these funds in the best manner
possible. She wished the Department success in its efforts to
further the gas pipeline project.
Senator Bunde agreed that the rest of Department's budget is lean
and mean; however, he argued that the addition of the gas pipeline
project funding would "dissipate" that leanness. He quoted that
"bureaucracies' first goal is to maintain and expand itself." The
Department would find a manner through which to expend every dollar
that is provided to them.
Co-Chair Wilken expressed confidence that the funds provided to
support the gas pipeline endeavor would be fruitful; particularly
as he respects the ability of Steve Porter, Deputy Commissioner,
Department of Revenue, to utilize his private sector experience to
further this endeavor.
Senator Olson voiced that it might be unrealistic for the
Departments to expend in excess of five million dollars on this
project before the end of the FY 04 fiscal year in approximately 60
days.
Co-Chair Green reminded the Committee of the Departments' testimony
regarding the "time-sensitive" nature of the work relating to this
request.
Senator Olson voiced surprise that the Departments could spend
approximately three million dollars a month in this endeavor.
Senator Dyson shared Co-Chair Wilken's confidence that the
Departments' project management team would be very "responsible in
their stewardship" of this endeavor. He compared the endeavor of
negotiating with the oil industry on this project to being a player
"in the world's biggest poker game," in that it requires a
tremendous amount of funds to play and that the rewards, while not
guaranteed, "are worth the risk." He expressed that the State has
reached a "critical juncture, and that opportunities such as this
are rare and should not be missed.
Senator Hoffman pointed out that the backup material specifies that
several of the natural gas pipeline projects must be funded beyond
the end of the FY 04 fiscal year.
Co-Chair Green pointed out that the explanatory comments attached
to Amendment #5 specify that $1.7 million of the Department of
Revenue and $3.9 million of the Department of Natural Resources
total requests would become available on July 1, 2004.
Senator Hoffman observed that similar differential funding
explanatory language is included in Amendment #4 for the Department
of Law.
Co-Chair Green concurred
Senator Dyson reminded that the Senate Resources Committee has on
contract, an internationally renowned resource professional who has
independently endorsed the Legislature's actions in this endeavor.
Senator Hoffman asked the total amount of general funds, federal
funds, and other funds, including funds provided by Amendments #1
through #5 that would be appropriated in this supplemental bill.
Co-Chair Green stated that this information would be provided.
AT EASE: 9:20 AM / 9:21 AM
Co-Chair Wilken moved to report SB 313, as amended, from Committee
with individual recommendations and accompanying fiscal note.
[NOTE: Due to technical difficulties, the following exchange was
not recorded.]
Senator Hoffman commented that this bill is an appropriation bill
and as such has no accompanying fiscal note.
Co-Chair Wilken acknowledged, and corrected his motion.
AT EASE 9:21 AM / 9:22 AM
[NOTE: Recording resumes.]
Co-Chair Green commented, for the record, that there has been
concern regarding payments for current and forthcoming long-term
health care. The Department of Health and Social Services is
attempting to rectify the situation in a manner that would incur
the least negative impact on individuals. This bill contains
authorization language that is required in order to release federal
funds that are available. This concern is the result of "a delay in
the payment" to certain vendors as opposed to "a non-payment"
scenario.
Senator Hoffman stated that a recent Anchorage Daily News newspaper
article alluded that these funds were being withheld by the
Legislative minority, as a negotiation tool. He declared, for the
record, that he has not been involved in any such tactics in this
regard.
Co-Chair Green furthered declared that none of the Committee's
members have participated in efforts in this regard.
There being no objection to the motion, CS SB 313(FIN) was REPORTED
from Committee.
[NOTE: Co-Chair Wilken chaired the remainder of the meeting.]
Co-Chair Wilken informed the Committee that the Constitutional
Budget Reserve (CBR) fund balance at the beginning of the FY 04
fiscal year was $2.07 billion, and, according to a recent
Legislative Finance Division projection, the balance on June 30,
2004 should be $2.4 billion. The increase is due to such things as
a recovering stock market.
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