Legislature(2003 - 2004)
05/07/2003 09:01 AM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE BILL NO. 100 "An Act making capital appropriations and reappropriations; capitalizing a fund; making appropriations under art. IX, sec. 17(c), Constitution of the State of Alaska, from the constitutional budget reserve fund; and providing for an effective date." This was the thirteenth hearing for this bill in the Senate Finance Committee. Amendment #8: This amendment is outlined in a memorandum from Mike Barton, Commissioner, Department of Transportation and Public Facilities to Cheryl Frasca, Director, Office of Management and Budget dated May 2, 2003, which reads as follows. The Department of Transportation and Public Facilities is requesting amendments to the capital budget bills (HB 150 and SB 100) before the Legislature. Rural Airport Projects The Department is requesting the following changes to rural airport capital projects: Amend Chevak: Snow Removal Equipment Building Increase from $50,000 to $200,000 federal receipt authority. The cost to build this structure has increased over previous estimates. This amount is needed in addition to an FY 03 appropriation to bring the total estimated cost to $750,000. Add Scammon Bay: Airport Snow Removal Equipment Building $100,000 federal receipts. Reflects revised Airport Improvement Program request. This project will upgrade the Scammon Bay Snow Removal Equipment Building. Statewide: Various Airport Snow Removal Equipment $4,300,000 federal receipts. This was inadvertently omitted from the Department's original request. The project provides federal authority to purchase new or replacement snow removal equipment at several rural airports. Surface Transportation Projects The Department's current AMATS [Anchorage Metropolitan Area Transportation Study] and Surface Transportation requests are $68,734,000 and $416,092,600. The following reductions are being requested to various highway projects: ($39,906,000) - Over the past year there has been a decrease in the amount of federal fuel tax revenues collected, which have caused a corresponding reduction in the highway construction program. A reduction in specific projects is being requested to reflect delays due to the decreased federal funding. ($48,125,000) - This amendment requests project reductions where the Department has determined that adequate project authority already exists to continue work through FH 04. ($1,205,000) - Also being requested is a reduction in TRAAK [Trails and Recreation Access for Alaska] projects to reflect a program allocation decrease. The following additions are being requested: $55,416,000 - New or increased federal project authority is being requested where scope changes, funding breakdown, updated estimates or priorities have changed. $21,700,000 - Project authority is needed for earmarks contained within the recently approved congressional appropriation bill. Finally, the amendment contains the elimination of individual pavement and bridge projects and combines them into regionwide allocations. This will provide the regions flexibility in determining their greater need, pavement or bridge repair. Similar adjustments are taking place for AMATS and FMATS [Fairbanks Metropolitan Area Transportation Study] projects. The net effect of these amendments is a reduction of $12,220,000 to the AMATS and Surface Transportation appropriation requests. A spreadsheet with the changes is attached [copy on file]. Co-Chair Wilken moved for the adoption of Amendment #8 and objected for discussion. He shared that the Department of Transportation and Public Facilities has submitted this amendment as the result of an expected decrease in FY 04 federal funding. Amendment to Amendment #8: This amendment to the amendment proposes to alter the funding methodology regarding Anchorage Metropolitan Area Transportation Study (AMATS) and Fairbanks Metropolitan Transportation Study (FMATS). Co-Chair Wilken moved to amend Amendment #8. He stated that this motion is in response to Committee questions regarding the amendment's affect on AMATS and FMATS. Furthermore, he stated that the effective date of June 30, 2003, as referenced on page two, line eight of Amendment #8, should be correctly identified as July 1, 2003. Co-Chair Wilken objected to the motion in order to allow for further explanation. At Co-Chair Wilken's request, Senator B. Stevens explained that the amendment to the amendment would address Committee concerns regarding proposed funding reductions to AMATS and FMATS. He stated that upon discussion with the Department, the determination was made to combine sections of the budget pertaining to pavement and bridge refurbishment improvements and to divvy up that combined $46 million in funding between the National Highway System and non- National Highway System entities also referred to as non- Metropolitan Planning Organizations (non-MPOs) and MPOs. He continued that due to the uncertainty of the actual amount of federal funding that would available, intent language is included to specify that AMATS would be allocated its historical funding level of 27 percent and FMATS would be allocated 6.9 percent of the forthcoming federal funds. He stated "this is a good solution to the issue," and he urged the Committee to support the amendment to the amendment. JEFF OTTESEN, Acting Director, Statewide Planning, Department of Transportation and Public Facilities stated that the amendment to the amendment would compress the three regional projects breakouts into a single line item in the budget. Subsequently, he continued, the intent language would specify that a pro-rata system, based on the Statewide Transportation Improvement Plan (STIP) formula, be used to distribute money to the MPOs. Therefore, he concluded, the federal funds received by the State would be "fairly" appropriated to the non-MPOs and MPOs as these federal funds "rise and fall." Senator Hoffman asked whether the intent language would negatively affect the flexibility of the Department to allocate funding and potentially jeopardize construction projects that might incur cost overruns in either Fairbanks or Anchorage. Mr. Ottesen responded that MPOs are allocated a specific quantity of money to manage. He stated that were a project to incur cost overruns, the MPO could shift funding to it. However, he noted that by doing so, the MPO might be required to delay another project. Additionally, he noted that historically, when large projects have incurred cost overruns, MPOs have submitted additional funding requests to the State. He communicated that, on occasion, the State has awarded additional monies to the MPO. Co-Chair Wilken removed his objection to the motion. There being no further objection, Amendment #8, as amended, was ADOPTED. Amendment #10: This amendment deletes the "Alaska Boating Safety (ED [Election District] 99)" component and the $720,000 other funds appropriation from the Department of Natural Resources on page 27, lines 15 and 16. Co-Chair Wilken moved for adoption of Amendment #10 and objected for purposes of explanation. He stated that when the original Boating Safety bill was adopted a few years earlier, the Legislature understood that the program would be 100 percent federally funded and that no additional funds would be required to administer the program. He communicated that, without affecting the federal contribution, the State annually collects approximately $120,000 in user fees, which are deposited into the general fund. Senator Bunde asked which boating safety programs would be impacted by the funding reduction. Co-Chair Wilken clarified that the program's overall funding was decreased from the requested $720,000 to $600,0000. He mentioned that, at the $600,000 level, the program would receive essentially flat funding, as its historical funding levels were $600,000 in FY 03 and $660,000 each for FY 02 and FY 01. Senator Hoffman questioned the Amendment's wording as it indicates that the entire funding amount of $720,000 would be eliminated. AT EASE 9:12 AM / 9:13 AM Amendment to Amendment #10: This amendment specifies that the funding level for the Boating Safety Programs would be $600,000. Co-Chair Wilken moved to amend Amendment #10. He concurred that the dollar amount specified in the amendment is in error. He moved to amend the amendment to retain the "Alaska Boating Safety (ed 99)" component and appropriate $600,000 in federal funds. He noted that the language being altered is located on page 27, line 15 of the bill. There being no objection, Amendment #10, as amended, was ADOPTED. Amendment #11: This amendment adds a "Juneau Public Health Center Heating and Ventilation Upgrades, Phase 2 (ED 3)" component in the Department of Health and Social Services and appropriates $647,191 general funds and $142,066 federal funds on page 24. Accompanying explanatory language reads as follows. The heating and ventilation systems at the Juneau Public Health Center are on the edge of failure. Restoring funding for this Governor's request will complete a phased project for which the legislature has appropriated startup money in recent years. The current systems at the Public Health Center are inadequate for patient care, staff comfort, and the air quality necessary at a medical facility. The systems are in such dire need of work that they are out of compliance with building codes. The existing stopgap measures are expensive electric baseboard heaters and opening and closing windows. Should the systems fail completely, patient care will be compromised and the center may face closure. Because the heating and ventilation systems must be completely replaced, further phasing of this project is not possible. Senator Olson moved for adoption of Amendment #11. Co-Chair Wilken objected. Senator Olson explained that this amendment would address local concerns regarding an inadequate and non-compliant air quality system at the medical facility. Co-Chair Wilken reminded that the State has previously spend approximately $750,000 on air quality improvements at this facility. He voiced concern that, were this amendment adopted, the total amount spent on addressing the system would exceed one million dollars. He suggested that perhaps the Center should consider relocating to another facility, as the current system's expense would be "extraordinary." He asked the Committee to not adopt this amendment. Senator Hoffman referenced previous comments made by Co-Chair Wilken whereby he had specified that the State would capitalize all federal matching funds. Senator Hoffman continued that the amendment denotes that $142,000 in federal funds would be available for this funding request. Therefore, he asked Co-Chair Wilken to comment about not "capturing" these federal funds. Co-Chair Wilken stated that he was "in error" when he voiced that the State would match all federal match money. He stated that even capturing $142,000 in federal money "would not make this project better." A roll call was taken on the motion. IN FAVOR: Senator Hoffman and Senator Olson OPPOSED: Senator B. Stevens, Senator Taylor, Senator Bunde, Co- Chair Green and Co-Chair Wilken The motion FAILED (2-5) Amendment #11 FAILED to be adopted. Amendment #12: This amendment adds a "Division of Sport Fish - Lower Kenai River Public Use Impact Study" component and $100,000 Fish and Game Fund appropriation to the Department of Fish and Game and inserts intent language to read as follows. It is the intent of the Legislature that the Department of Fish and Game enter into an agreement for services with the Department of Natural Resources to conduct a public analysis on the impact of overcrowding on the lower Kenai River by recreational user groups. Accompanying explanatory language reads as follows. This project and accompanying intent language, allows the Department of Fish and Game to contract with the Department of Natural Resources (Department of Natural Resources) for an analysis on the impact of overcrowding on the lower Kenai River by recreational user groups. The previous Administration imposed a hasty guide moratorium on the Kenai River and the current Administration rescinded that moratorium. This project will enable the Department of Natural Resources to seek the input of recreational users and businesses before any further use restrictions are imposed. This amendment also adds a "Division of Wildlife Conservation - Laboratory Remodel" component and $150,000 Fish and Game Fund appropriation for the Department of Fish and Game. Accompanying explanatory language reads as follows. This project was submitted by the Office of Management and Budget on March 24, 2003. Backup is attached [not provided.] Co-Chair Wilken moved to adopt Amendment #12. He commented that this amendment would result in a net zero change in the capital budget. He clarified that in order to act upon Amendment #12, the Committee would be required to rescind its previous action on Amendment #6 which specifies that the fund recipient be the Department of Natural Resources. He explained that Amendment #12 correctly specifies that the recipient of the funds be the Department of Fish and Game. He clarified that the change is required because State statutes require Department of Fish and Game funds to be tunneled through the Department of Fish and Game. In order to act on Amendment #6, Co-Chair Wilken withdrew his motion to adopt Amendment #12. Without objection, Amendment #12 was WITHDRAWN. Amendment #6: This amendment adds a "Division of Parks - Lower Kenai River Public Use Impact Study" component and $100,000 Fish and Game Fund appropriation to the Department of Natural Resources on page 27. Accompanying explanatory language reads as follows. This project allows the Department of Natural Resources to conduct a public analysis on the impact of overcrowding on the lower Kenai River by recreational user groups. The previous administration imposed a hasty guide moratorium on the Kenai River and the current administration rescinded that moratorium. This CIP [Capital Improvement Project] will enable the Department to seek the input of recreational users and businesses before any further use restrictions are imposed. This amendment also adds a "Division of Wildlife Conservation - Laboratory Remodel" component and $150,000 Fish and Game Fund appropriation to the Department of Fish and Game on page 23. Accompanying explanatory language reads as follows. This CIP request was submitted by the Office of Management and Budget on March 24, 2003. Backup is attached [copy on file.] Senator Taylor moved to rescind Committee action on Amendment #6. There being no objection, the action to adopt Amendment #6 was RESCINDED. Amendment #12 was again before the Committee. Co-Chair Wilken moved for the adoption of Amendment #12. He clarified that the language in Amendment #12 specifies that that the funds be allocated to the Department of Fish and Game rather than the Department of Natural Resources as incorrectly identified in Amendment #6. In response to a question from Senator Taylor, Co-Chair Wilken stated that the funds in question are Department of Fish and Game funds monies and would result "in net zero" affect on the budget. There being no objection, Amendment 12 was ADOPTED. Amendment #13: This amendment deletes the "Municipality of th Anchorage - Laurel St. Upgrade, Dowling Rd. to 64 Avenue (ED 17- 32)" component in the Grants to Municipalities (AS 37.05.315) BRU and $270,000 general fund appropriation on page 9, lines 13 - 16. This amendment also inserts a "Municipality of Anchorage - Raspberry Road Upgrade, Minnesota Drive to Arctic Boulevard (ED 17- 32)" component in the in the Grants to Municipalities (AS 37.05.315) BRU on page 9, lines 13 - 16 and appropriates $270,000 general funds. Accompanying explanatory language reads as follows. According to the Municipality of Anchorage, sufficient local bond funding is available to complete the Laurel Street Upgrade. This amendment would utilize $270,000 previously identified for Laurel Street Upgrade to fund the State owned portion of the Raspberry Road Upgrade project. Co-Chair Wilken moved for the adoption of Amendment #13 and objected for explanation. He stated that this is a technical amendment to redirect funding to upgrade Raspberry Road rather than Laurel Street in Anchorage. He noted that the funding element would remain constant. Co-Chair Wilken removed his objection. There being no further objection, Amendment #13 was ADOPTED. Amendment #14: This amendment to the Department of Transportation and Public Facilities budget is outlined in a letter to the co- chairs of the Senate Finance Committee and the House Finance Committee from Cheryl Frasca, Director, Office of Management and Budget, dated May 6, 2003, as follows. Amendment 1 Amends the title of the Surface Transportation Program allocation From: "Anchorage Metropolitan Area Transportation System 2004 Preventative Maintenance on State Roads" To: "Anchorage Metropolitan Area Transportation System 2004 Preventative Maintenance State and Local Roads" Amendment 2 Amends the title of the Surface Transportation Program allocation From: "Fairbanks Metropolitan Area Transportation System 2004 Preventative Maintenance on State Roads" To: "Fairbanks Metropolitan Area Transportation System 2004 Preventative Maintenance State and Local Roads" [Note: The components are not specified in the committee substitute as indicated.] Co-Chair Wilken presented Amendment #14 on behalf of Governor Murkowski's Administration. Co-Chair Wilken communicated that this is a technical amendment in that it would expand some previously adopted AMATS and FMATS project titles to include preventive road maintenance for local roads, in addition to State roads. Senator Taylor asked for clarification that this is a title change rather than a reappropriation of funds. Senator Stevens verified that the projects have previously been approved in the legislation and that this action "is simply a technical correction." There being no objection, Amendment #14 was ADOPTED. Amendment #15: This amendment adds a "City of Palmer - Eagle Avenue Improvement (ED 13-16) component and $200,000 general fund appropriation to the Grants to Municipalities (AS 37.05.315) BRU on page 3, lines 21 and 22. This amendment also reduces the general fund appropriations in the following amounts to the following components in the Grants to Municipalities (AS 37.05.315) BRU. Page 5, lines 23 - 25 City of Wasilla - Gravel to Asphalt Road Program (ED 13-16) Reduce $250,000 to $150,000 Page 5, lines 26 - 28 City of Wasilla - Maintenance Building (ED 13-16) Reduce $200,000 to $150,000 Page 5, lines 29 and 30 City of Wasilla - Sports Arena Equipment (ED 13-16) Reduce $75,000 to $25,000 Accompanying explanatory language reads as follows. The net impact of this amendment to CS SB 100 (FIN) is zero. Eagle Avenue is a significant collector street connecting the Glenn Highway with north Palmer neighborhoods and the Sherrod School and Swanson School complex. The street is presently a gravel street. This project will reconstruct approximately 2,000 feet of Eagle Avenue from the Glenn Highway to the North Valley Way intersection to a paved street with drainage and sidewalk improvements. This project is important to the City as a new elementary school located at the end of Eagle Avenue is opening in the fall of 2003. Co-Chair Green moved to adopt Amendment #15. Co-Chair Wilken objected for an explanation. Co-Chair Green stated that this amendment would shift some funds from the City of Wasilla to support a street project in the City of Palmer. She noted that the amendment is supported by both communities and would produce a net zero affect on the budget. Co-Chair Wilken removed his objection. There being no further objection, Amendment #15 was ADOPTED. Amendment #16: This amendment adds a "Federally Funded Landowner Incentive Program - Bristol Bay/North Aleutians project" component and $1,642,500 federal funds to the Department of Fish and Game on page 23, line 21. Senator Hoffman moved to adopt Amendment #16. Co-Chair Wilken objected. Senator Hoffman spoke to the amendment by specifying that the amendment would provide $1.6 million in federal funds to purchase land. He informed the Committee that several land user groups are participating in this project. Co-Chair Wilken noted that a $500,000 [unspecified] match would be required in order to receive $1.6 million in federal funds with which to purchase conservation easements on private land in the Dillingham/Bristol Bay region. He reminded the Committee of its "considerable discussions" regarding the removal of private land from tax rolls and from potential development. He stated that these are the primary reasons for his objection to the amendment. Senator Hoffman understood that the vast majority of the affected land would remain in private ownership. Co-Chair Wilken agreed, but asserted that the conservation easement might hinder future development of the land. PAT WALKER, Staff to Senator Lyman Hoffman, informed that a coalition comprised of fishing guides, local Native Corporations, and local community entities has been formed in Southwest Alaska with the intent of furthering fishing and sporting endeavors to provide future economic development opportunities in the region. Co-Chair Wilken understood that a conservation easement "would not allow future development of the land." Ms. Walker responded that the intent of the coalition is to open up the region to these activities. Senator Taylor inquired as to how an easement would affect the viability of the land; specifically how would it "make property better or worse." Ms. Walker stated that the coalition is working to avoid adverse impacts on the land. Senator Taylor asked for further information regarding possible adverse impacts. Ms. Walker responded that pollution might be an adverse impact. Senator Taylor stated, "that development could only happen" if private owners chose to sell the land to developers or develop it themselves. Ms. Walker clarified that the Southwest Alaska coalition is comprised of a multitude of people in the area including private landowners. She noted that a resolution [copy on file] in support of the easement has been provided with the amendment. Senator Hoffman stated that, without these funds, the land could not be purchased and utilized to enhance the economy of the region. He asked Ms. Walker how the status of the land would be affected were it not purchased. Ms. Walker responded that she is unsure of the affect. Co-Chair Wilken understood that 10,000 acres of land could be purchased; however, he attested that the acreage has not been identified. Senator Bunde commented that, "realistically … the only industry" that could be developed in this region would be sport fishing and sport hunting. He voiced that granting conservation easements would have "little negative impact." Co-Chair Wilken characterized this situation as a "policy call," since this transaction would involve mainly federal funds. Senator Taylor asked for examples of the entities that would provide the matching funds. Ms. Walker stated that, in addition to the $1.6 million in federal funds, a $500,000 local match, including money from the Conservation Fund, would be required. She stated that the Department of Fish and Game has been working with the Conservation Fund on this issue. Senator Taylor asked for further information regarding the Conservation Fund organization. Co-Chair Wilken noted that he could provide information [copy not provided] regarding the Conservation Fund and the Southwest Alaska Coalition to Committee members. Senator Stevens asked the current titleholder of the land in question. Senator Hoffman responded that the land is private property and he assumed that it belonged to a Native corporation. Senator Hoffman removed his motion to adopt Amendment #16 in order to obtain further information to present to the Committee. There being no objection, the motion to adopt Amendment #16 was WITHDRAWN. Co-Chair Wilken stated that the information regarding the Conservation Fund and the Southwest Alaska Coalition would be provided to Members. Co-Chair Wilken ordered the bill HELD in Committee.