Legislature(2003 - 2004)

02/20/2004 09:03 AM Senate FIN

Audio Topic
* first hearing in first committee of referral
+ 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."                                                                                      
     SENATE BILL NO. 314                                                                                                        
     "An Act making supplemental and other appropriations; amending                                                             
     and repealing appropriations; making appropriations to                                                                     
      capitalize funds; and providing for an effective date."                                                                   
This was  the first hearing  for these bills  in the Senate  Finance                                                            
Co-Chair  Green noted that  the committee  would hear presentations                                                             
from the departments for funding requests in both bills.                                                                        
Department of Administration                                                                                                  
SB 313                                                                                                                          
Section: 1                                                                                                                      
Results Delivery Unit [RDU]: ETS                                                                                                
Supplemental   Need:  Appropriates   the   ACS  disentanglement   of                                                            
$3,477,647  from the general fund  to the Information Services  Fund                                                            
$3,447,600 general funds                                                                                                        
$3,447,600 Total Funds                                                                                                          
ERIC  SWANSON,  Director,   Division  of  Administrative   Services,                                                            
Department  of Administration   testified the  amount  of this  item                                                            
represents  two payments  made by  the Alaska  Communication  System                                                            
(ACS)  to the  State as  part of  a settlement  agreement  to end  a                                                            
contractual  relationship  in which ACS  provided telecommunication                                                             
services.  He stated  this  transfer is  necessary  to offset  costs                                                            
incurred  during the transition  to revert  the internal systems  to                                                            
the pre-contract state.                                                                                                         
Co-Chair Green  asked whether these  expenditures have already  been                                                            
Mr. Swanson affirmed they had.                                                                                                  
Co-Chair  Green  asked if  the funding  is  necessary  in the  "fast                                                            
track"  supplemental  budget rather  than the  regular supplemental                                                             
Mr. Swanson  responded it is necessary  to receive the funds  timely                                                            
to prevent cash flow problems.                                                                                                  
Co-Chair  Green  asked  if  any portion  of  the  funding  could  be                                                            
deferred to FY 05.                                                                                                              
Mr. Swanson answered it could not.                                                                                              
Senator  Olson   asked  the  total   cost  of  the  settlement   and                                                            
Mr. Swanson  replied that  the State would  receive $3,447,600  from                                                            
ACS, however the  total cost to the State would exceed  that amount.                                                            
Senator  Olson  asked  if the  difference  would  be  a significant                                                             
Mr.  Swanson  estimated   the  actual  expenditures   would  not  be                                                            
significantly more than the settlement.                                                                                         
SB 314                                                                                                                          
Section: 1(a) and (b)                                                                                                           
RDU: OPA                                                                                                                        
Supplemental  Need: FY 04 projected  caseload and case cost  growth.                                                            
$800,000 general funds                                                                                                          
$300,000 SDPR                                                                                                                   
$1,100,000 Total Funds                                                                                                          
Mr.  Swanson  listed  factors  contributing   to this  supplemental                                                             
funding  need. He  stated that  the previous  fiscal  year, the  OPA                                                            
received  two supplemental  appropriations, the  second of  which of                                                            
$357,000 was not  included in the base calculations  for determining                                                            
the FY 04 appropriation.  Secondly,  he reminded that in  past years                                                            
the OPA  has received interagency  receipts  from the Department  of                                                            
Health and  Social Services  to fund child  custody cases;  however,                                                            
this funding  would not be  forthcoming in  FY 04. He noted  this is                                                            
despite  the  continued  caseload  growth.  He  furthered  that  the                                                            
overall caseload continues  to increase, with felony cases, the most                                                            
expensive  to handle,  increasing  eight percent  over the  previous                                                            
AT EASE 9:18 AM / 9:19 AM                                                                                                       
JOSH FINK, Office of Public  Advocacy, Department of Administration,                                                            
testified via  teleconference from  Anchorage that he was  available                                                            
to answer questions.  He pointed out  that $700,000 of this  request                                                            
is to offset interagency  receipts not received to  fund the Balloon                                                            
Project. He  attributed the need for  the remaining $300,000  to the                                                            
increased caseload over  FY 03. He assured the OPA is "aggressively"                                                            
pursuing  cost saving  measures and  efficiencies.  He detailed  the                                                            
increases of the past several years.                                                                                            
Senator  B. Stevens  asked the  whether  the FY  05 funding  request                                                            
would be adequate  for that budget  year. He questioned whether  the                                                            
Department  would continue  to  submit supplemental  requests  every                                                            
Mr. Fink deferred to Mr. Swanson.                                                                                               
Mr.  Swanson   responded   that  the  Department   has  taken   this                                                            
supplemental request  into account when submitting  the FY 05 budget                                                            
recommendations.  He qualified  that the actual  caseload growth  is                                                            
difficult  to project  and  is therefore  not factored  into  annual                                                            
budget  requests.  He reiterated  that  the OPA  has "fundamentally                                                             
changed"  it operating  practices.  He stated  it is  likely that  a                                                            
supplemental request would not be necessary for FY 05.                                                                          
Senator Dyson  asked for  clarification of  the funds necessary  for                                                            
the Balloon Project.                                                                                                            
Mr. Fink had  anticipated the OPA  would receive less than  $400,000                                                            
in interagency  receipts  to fund  legal representation  in  Balloon                                                            
Project cases,  although no such funding was received.  He noted the                                                            
Public  Defender's  Agency  did  not receive  any  of  this  funding                                                            
either.   Despite  this,   he  stressed   that   both  offices   are                                                            
aggressively pursing those cases.                                                                                               
Senator Dyson  shared that he was  involved in the establishment  of                                                            
the  Balloon  Project,  with intent  that  it  would be  a  one-time                                                            
project.  However,  he noted  the  program  was first  extended  for                                                            
another year,  and has continued to operate although  has never been                                                            
reauthorized by the Legislature as a continuing project.                                                                        
Co-Chair Green  reminded that the budget subcommittee  provided full                                                            
funding for  the Balloon Project last  session. She agreed  that the                                                            
project was  intended to  have a two-year  lifespan but instead  has                                                            
"taken of a life  of its own" and is no longer a project  but rather                                                            
a program.                                                                                                                      
Co-Chair Green recalled  discussions held in the budget subcommittee                                                            
the previous  session that  the actual number  of cases for  adoptee                                                            
was decreasing. She asked whether this is so.                                                                                   
Mr. Fink  did not have  the actual numbers  of adoptions  completed,                                                            
but stressed  that the project  has been  successful. He noted  that                                                            
the  backload  has been  significantly  reduced  and  therefore  the                                                            
number of cases is fewer than in past years.                                                                                    
Co-Chair  Green  asked  whether  new  full  time  staff  were  hired                                                            
specifically  to  administer the  Balloon  Project  cases, with  the                                                            
intent  that  the  positions  would  be  eliminated  once  the  need                                                            
Mr. Fink qualified that  the Balloon Project began before his tenure                                                            
at the OPA. He  understood that three staff positions  were created,                                                            
although the caseload  was distributed to all the  guardian ad litem                                                            
positions.  He emphasized that no  positions solely perform  Balloon                                                            
Project cases.                                                                                                                  
Co-Chair  Green asked  which  types of  cases have  experienced  the                                                            
largest increases.                                                                                                              
Mr. Fink replied  that the OPA has experienced a "natural  increase"                                                            
in all caseloads.                                                                                                               
Co-Chair  Green assumed  the OPA would  not request  any funding  in                                                            
addition to this supplemental budget request.                                                                                   
SB 314                                                                                                                          
Section: 1(c)                                                                                                                   
RDU: Public Defender                                                                                                            
Supplemental  Need: FY 04 projected  caseload and case cost  growth.                                                            
$ 650,000 general funds                                                                                                         
Mr. Swanson  reiterated that funding  from the Department  of Health                                                            
and  Social   Services  for  the   Balloon  Project  is   no  longer                                                            
forthcoming. He  noted that both the Public Defender's  Agency (PDA)                                                            
and the OPA are assigned  these adoption cases. He also spoke to the                                                            
increased caseload the PDA is experiencing.                                                                                     
Co-Chair   Green   pointed  out   that   the  funding   request   is                                                            
significantly higher than the PDA's cost of the Balloon Project.                                                                
Mr. Swanson  agreed, noting this request  is for funding  to address                                                            
the increases of all caseloads.                                                                                                 
BARBARA  BRINK,  Director,  Public Defender  Agency,  Department  of                                                            
Administration,   testified  via   teleconference  from   an  offnet                                                            
location that  caseload increase of  approximately 1,000  new annual                                                            
cases, has been "rather astonishing" over the last two years.                                                                   
Ms. Brink assured the Committee  that the PDA is always taking steps                                                            
to reduce expenditures.  She noted that vacancies have been unfilled                                                            
in  eight  offices,  despite  the  increase  this  creates  for  the                                                            
remaining attorneys.  She also informed that the PDA  is refusing to                                                            
automatically   accept  clients   whose  cases   relate  to   parole                                                            
violations.  She stated that  the Agency used  to accept clients  at                                                            
the request  of parole officers.  She remarked  that the court  must                                                            
establish a system to determine eligibility of these defendants.                                                                
Ms.  Brink  furthered  that  the  PDA  has  reduced  the  number  of                                                            
subscriptions,   and  that  travel  is  limited   to  only  what  is                                                            
necessary.  She  stated that  the  PDA has  increased  its usage  of                                                            
volunteers and  uncompensated interns, has eliminated  positions and                                                            
shortened  office hours. She  stated that  all expenditures  of over                                                            
$100 are reviewed  in a three-step process. She also  noted that the                                                            
PDA has begun  charging private attorneys  who accept cases  for the                                                            
cost of duplicating the case file.                                                                                              
Senator  Olson noticed  that the  practice of  interagency  receipts                                                            
transferred  from the Department  of Health  and Social Services  to                                                            
the PDA has been discontinued and asked the reason.                                                                             
Mr. Swanson responded  that those funds were no longer  appropriated                                                            
to the  Department of Health  and Social  Services, although  he was                                                            
unsure the reason.                                                                                                              
Department of Fish and Game                                                                                                   
SB 313                                                                                                                          
Section: 3                                                                                                                      
RDU: Capital                                                                                                                    
Supplemental  Need:  Receipts from  City and  Borough  of Juneau  to                                                            
complete work  at the indoor rifle  range in Juneau. These  receives                                                            
have  already  been  received,  and  work  at  the  rifle  range  is                                                            
scheduled to start early spring.                                                                                                
$ $75,000 Statutory Designated Program Receipts (SDPR)                                                                          
KEVIN  BROOKS,  Director,   Division  of  Administrative   Services,                                                            
Department of  Fish and Game, clarified that construction  had begun                                                            
and  that the  range  is nearly  complete.  He informed  that  these                                                            
additional  funds became  necessary due to  difficulty in  attaining                                                            
water; however,  the City and Borough  agreed to allow the  facility                                                            
to link to the municipal  water system and also to assist in funding                                                            
the process.                                                                                                                    
SB 314                                                                                                                          
Section: 6                                                                                                                      
RDU: Capital                                                                                                                    
Supplemental Need:  Language change to FY 02 appropriation  relating                                                            
to the use of  proceeds from sale of vessels to also  include repair                                                            
and maintenance of vessels                                                                                                      
$ 0.0 Total Funds                                                                                                               
Mr. Brooks informed  that a replacement vessel was  purchased before                                                            
the sale of the  existing vessel. He noted that costs  were incurred                                                            
to prepare the new vessel, including painting.                                                                                  
[NOTE: Audio recording interruption.]                                                                                           
Co-Chair  Green commented  that the  supplemental  request for  this                                                            
Department is very different than in previous years.                                                                            
Office of the Governor                                                                                                        
SB 313                                                                                                                          
Section: 4                                                                                                                      
RDU: Elections                                                                                                                  
Supplemental  Need: General funds  needed for the Help America  Vote                                                            
Act (HAVA)  fund maintenance  of effort. Some  work on the  upcoming                                                            
primary and general elections will take place during FY 04.                                                                     
$ 180,000 general funds                                                                                                         
LAURA  GLAISER,  Director,  Division  of Elections,  Office  of  the                                                            
Lieutenant  Governor, testified that  the language is incorrect  and                                                            
should read, "the  sum of $180,000 is appropriated  from the general                                                            
fund to the  Office of the Governor,  division of elections  for the                                                            
operating costs  of the division related to the primary  and general                                                            
election for  the fiscal year ending  June 30, 2004." She  clarified                                                            
the funds  would be utilized  for "maintenance  of effort"  based on                                                            
primary and general election expenditures.                                                                                      
Senator Olson  asked if these funds are necessary  in the fast track                                                            
supplemental budget.                                                                                                            
Ms. Glaiser  responded  they are to  allow for  preparation for  the                                                            
upcoming   primary   election.   She   explained    that   statutory                                                            
requirements  necessitate  the purchasing  forms  in FY  04 so  they                                                            
could be delivered during FY 05.                                                                                                
SB 314                                                                                                                          
Section: 7                                                                                                                      
RDU: Elections                                                                                                                  
Supplemental   Need:  Additional   Election   Funds  for   improving                                                            
accessibility to voting locations                                                                                               
$100,000 Election Fund                                                                                                          
Ms.  Glaiser stated  this  request is  for authorization  to  expend                                                            
grant funds for improved accessibility as part of the HAVA.                                                                     
Department of Public Safety                                                                                                   
SB 313                                                                                                                          
Section: 7                                                                                                                      
RDU: Capital                                                                                                                    
Supplemental  Need: Scope  change  for the Ketchikan  Public  Safety                                                            
Building appropriation,  sec. 1, ch.  82, SLA 2003, pg. 33,  In. 22,                                                            
to  include  a  purchase   of  a  building  and  adjacent   lot  and                                                            
$ 0.0 Total Funds                                                                                                               
DAN  SPENCER,   Director,  Division   of  Administrative   Services,                                                            
Department   of   Public  Safety,   testified   that   rather   than                                                            
constructing  a new  building as  earlier planned,  the Department,                                                             
would purchase  and renovate  an existing  building. He stated  that                                                            
the purchase  of an additional  lot might  be necessary for  storage                                                            
and to operate an impound lot.                                                                                                  
SB 314                                                                                                                          
Section: 13(a)                                                                                                                  
RDU: ABC Board                                                                                                                  
Supplemental Need: Enabling  language to allow the department to pay                                                            
a prior year bill using the FY 04 appropriation                                                                                 
$ 0.0 Total Funds                                                                                                               
Mr. Spencer explained  that this would provide authorization  to pay                                                            
a claim  of a  previous  fiscal year  submitted  during this  fiscal                                                            
year.  He noted  that this  is authorization  is  necessary  because                                                            
adequate lapsed  funds are available  and must be utilized  for this                                                            
purpose as required by statute.                                                                                                 
SB 314                                                                                                                          
Section: 13(b)                                                                                                                  
RDU: Capital                                                                                                                    
Supplemental  Need:  Denali  Commission  grant  to  the  Council  on                                                            
Domestic  Violence  and Sexual  Assault  for domestic  violence  and                                                            
sexual assault shelter facility funding                                                                                         
$4,750,000 federal funds                                                                                                        
Mr. Spencer explained this  request is to expend funds received from                                                            
the Denali Commission  to solicit bids for improvements  and repairs                                                            
to shelters for victims  of domestic violence and sexual assault. He                                                            
noted this  request  is included in  the FY  04 supplemental  budget                                                            
request rather  than the  FY 05 capital budget  request because  the                                                            
Denali Commission  dictated the funds  must be allocated  by July 1,                                                            
Co-Chair Green  asked why this item was not included  in the regular                                                            
FY 04 budget.                                                                                                                   
Mr. Spencer  replied that the Department  was unaware of  this issue                                                            
until a couple months ago.                                                                                                      
Co-Chair Wilken  requested list of the communities  where this funds                                                            
would be dispersed,  as well as the amount of local  contribution to                                                            
the projects.                                                                                                                   
Mr.  Spencer  qualified  that  a  list  of  projects  would  not  be                                                            
available  until the  end of the  current fiscal  year, although  he                                                            
would provide it at that time.                                                                                                  
Co-Chair Wilken  understood that 21  agencies responded to  a survey                                                            
on needs and planned projects.                                                                                                  
Mr. Spencer clarified the survey was conducted in prior years.                                                                  
DENISE HENDERSON,  Executive Director, Council on  Domestic Violence                                                            
and Sexual Assault, Department  of Public Safety, testified that the                                                            
Council was contacted by  the Denali Commission council and asked to                                                            
oversee the distribution  of these federal funds.  She informed that                                                            
the Denali Commission  has sponsored many capital  projects and that                                                            
when the  funds were  included in  the federal  omnibus budget,  the                                                            
Commission  requested  the  Council  conduct  a  survey  of  service                                                            
providers to assess the unmet needs.                                                                                            
Co-Chair  Wilken expressed  concern  that  $4.75 million  was to  be                                                            
distributed to as many  as 21 communities and he asked whether local                                                            
matching funds were required.                                                                                                   
Ms. Henderson answered no.                                                                                                      
Co-Chair  Wilken  clarified  the program  would  solely  consist  of                                                            
federal funds with no expectation of State funding.                                                                             
Ms. Henderson  replied that  this is the  first time the  Commission                                                            
has received this  significant amount of funds. She  stated that the                                                            
Council has  decided to have service  providers "bid" for  the funds                                                            
to establish standard requirements.  She explained this is to ensure                                                            
the sustainability of the  projects and the organizations that would                                                            
operate them,  given funding reductions  from the State and  federal                                                            
Co-Chair Wilken commented  that traditionally, the Denali Commission                                                            
provides funding for projects  in Rural Alaska. He asked whether all                                                            
communities would be eligible to receive these funds.                                                                           
Ms. Henderson  affirmed all  communities in  Alaska are eligible  to                                                            
receive this funding.                                                                                                           
Co-Chair  Green asked whether  a board or  other group would  review                                                            
the applications and undertake  a selection process on behalf of the                                                            
Denali Commission.                                                                                                              
Ms. Henderson  replied that the Counsel would act  in this capacity.                                                            
She added that  the Denali Commission  has requested that  the State                                                            
government assume  more control over how these funds  are allocated.                                                            
Co-Chair  Green asked whether  any Counsel  members are involved  in                                                            
organizations that would be requesting this funding.                                                                            
Ms.  Henderson  assured  that  no  member of  the  Counsel  holds  a                                                            
position in  a shelter or other organization  affected by  decisions                                                            
of the  Council. She  stated that  she and a  representative  of the                                                            
Denali  Commission would  conduct  site visits  themselves and  that                                                            
there are many factors they intent to take into account.                                                                        
Co-Chair  Green told  of concerns  expressed to  her that no  "wall"                                                            
exists  between  those  awarding  grants  and  recipients  of  those                                                            
Ms. Henderson  responded this  is one reason  the Denali  Commission                                                            
has requested that the State oversee this process.                                                                              
Senator Olson  asked what  percentage of the  $4.7 million  would be                                                            
utilized for construction versus administrative costs.                                                                          
Ms.  Henderson  replied  that  the  original  appropriation  was  $5                                                            
million and that the Denali Commission has retained $300,000.                                                                   
AT EASE 9:49 AM / 9:50 AM                                                                                                       
SFC 04 # 17, Side A 09:50 AM                                                                                                    
[NOTE: Side B  of #16 is not recorded. No portion  of the meeting is                                                            
Department of Natural Resources                                                                                               
SB 313                                                                                                                          
Section: 6(a)                                                                                                                   
RDU: Recorder's Office                                                                                                          
Supplemental  Need:  Increased  costs  to process  heavy  volume  of                                                            
mortgage refinance activity                                                                                                     
$300,000 Receipt Supported Services                                                                                             
NICO  BUS, Administrative   Services Manager,  Division  of  Support                                                            
Services, Department of  Natural Resources testified this request is                                                            
necessary due  to the "extremely heavy workload in  refinancing". He                                                            
informed that the workload  has increased almost 50 percent and that                                                            
no permanent  staff has been hired  to address this extra  workload.                                                            
He  reported  the  Office  has  generated   almost  $10  million  in                                                            
additional revenue  and that the nonpermanent staff  positions would                                                            
be eliminated once the workload decreases.                                                                                      
SB 313                                                                                                                          
Section: 6(b)                                                                                                                   
RDU: Office of Habitat Mgt. and Permitting                                                                                      
Supplemental  Need:  Replace  unrealized  inter-agency  receipts  in                                                            
order to fulfill workload requirements                                                                                          
$150,000 general funds                                                                                                          
Mr. Bus  stated  this request  is necessary  to  fund new  positions                                                            
created  with  the   acquisition  of  the  habitat  management   and                                                            
permitting activities.  He recalled the anticipation of inter-agency                                                            
receipts and statutory  designated program receipts,  which he said,                                                            
"did not materialize".  He relayed that the original intent was that                                                            
the positions would be  filled at Step A salary levels; however many                                                            
of the transferred  employees were  higher steps and therefore,  the                                                            
Department  has inadequate funding  for five positions. He  stressed                                                            
that  with increased  development  efforts,  the positions  must  be                                                            
SB 313                                                                                                                          
Section: 6(c)                                                                                                                   
RDU: Capital                                                                                                                    
Supplemental Need:  Increased activity in Remote Recreational  Cabin                                                            
Site Survey Contracts                                                                                                           
$ 119,000 Land Disposal Income Fund                                                                                             
Mr.  Bus  informed  that  the  Department  contracts   with  private                                                            
professional   to  conduct  the  surveys,  the  cost   of  which  is                                                            
reimbursed  by  the  purchasers.  He reported  that  the  intent  to                                                            
undertake  these  efforts  the  previous  summer   were unfeasible;                                                             
however, it  was since determined  that the funds should  accurately                                                            
be accounted as capital rather than operating expenditures.                                                                     
SB 314                                                                                                                          
Section: 12(a)                                                                                                                  
RDU: Capital                                                                                                                    
Supplemental  Need: FESCO Settlement  for Contaminated Site  Cleanup                                                            
$118,600 SDPR                                                                                                                   
Mr. Bus explained this  relates to a lease settlement located on the                                                            
North Slope in which the  company, the Department and the Department                                                            
of Environmental Conservation  agreed that contamination cleanup was                                                            
necessary.  He stated that the company  paid the State $118,639  and                                                            
this request is for funds  to allow the company to execute the lease                                                            
and undertake further development.                                                                                              
Co-Chair  Green  asked  why this  item  is  included  in the  FY  04                                                            
supplemental budget.                                                                                                            
Mr. Bus responded that  the terms of the settlement requires payment                                                            
be made before June 2004 and the start of FY 05.                                                                                
SB 314                                                                                                                          
Section: 12(b)                                                                                                                  
RDU: Capital                                                                                                                    
Supplemental Need: BLM  2009 Accelerated Land Transfer - Year 1 of a                                                            
5-year project  to significantly increase  the rate of federal  land                                                            
transfers to  individual Native Allottees,  the ANCSA Corporations,                                                             
and the State.                                                                                                                  
$1,268,000 federal funds                                                                                                        
Mr. Bus informed that the  federal Bureau of Land Management decided                                                            
to  complete  all land  transfers  by  the year  2009.  Because  the                                                            
Department  would be unable  to perform its  functions necessary  to                                                            
accomplish  this using existing  funding, he  said that the  federal                                                            
government would provide the funds.                                                                                             
Senator  Olson  asked  why  three  Department   positions  would  be                                                            
necessary to undertake this operation.                                                                                          
Mr. Bus deferred to Dick Mylius.                                                                                                
DICK MYLIUS,  Deputy Director, Division  of Mining, Land  and Water,                                                            
Department of  Natural Resources, testified via teleconference  from                                                            
an offnet location,  about the approximately  300 Native  allotments                                                            
of land transferred  to the State before the Native  allotments were                                                            
filed. As  a result, he  stated that the  State must first  transfer                                                            
these  parcels back  to  the federal  government  so  it could  then                                                            
transfer  to the Native  allottees.  He listed  the steps  involved,                                                            
including best  findings, identification  of easements, third  party                                                            
interests, and etc., which must be conducted for each parcel                                                                    
SB 314                                                                                                                          
Section: 12(c)                                                                                                                  
RDU: Capital                                                                                                                    
Supplemental Need: Denali  Park Visitor Destination Access - US Park                                                            
Service grant for planning and design of new visitor facilities                                                                 
$1,268,000 federal funds                                                                                                        
Mr. Bus  shared that  the Department  is evaluating  a South  Denali                                                            
Access  planning as  well as improvements  to  the Petersville  road                                                            
corridor. He emphasized  that this item is comprised  of 100 percent                                                            
federal funds and no State funds.                                                                                               
SB 314                                                                                                                          
Section: 12(d)-(e)                                                                                                              
RDU: Capital                                                                                                                    
Supplemental  Need: Afognak Coastal  Wetlands grant for purchase  of                                                            
waterfall parcel within the Perenosa Bay area of Afognak Island                                                                 
$2,000,000 federal funds                                                                                                        
$650,000 SDPR                                                                                                                   
$ 2,650,000 Total Funds                                                                                                         
Mr. Bus reminded this matter  was discussed the previous session. He                                                            
noted  the size  of the  project  has been  reduced  to 2,100  acres                                                            
located  on the  northern  coast of  Afognak  Island.  He stated  $2                                                            
million was  received from the National  Park Service and  the Rocky                                                            
Mountain Elk Foundation provided the $650,000.                                                                                  
Co-Chair  Wilken  asked if  the  Governor  vetoed funding  for  this                                                            
project the prior year.                                                                                                         
Mr. Bus affirmed  the larger land  purchase as funds from  the Exxon                                                            
Valdez Oil Spill settlement were involved.                                                                                      
Co-Chair  Wilken asked  if this  proposal addresses  the  Governor's                                                            
earlier concerns.                                                                                                               
Mr. Bus affirmed it does.                                                                                                       
SB 314                                                                                                                          
Section: 12(f)                                                                                                                  
RDU: Office of Alaska Coastal Zone Management                                                                                   
Supplemental  Need: Increased  Department of  Law costs for  Coastal                                                            
Zone regulations                                                                                                                
$95,000 general funds                                                                                                           
Mr. Bus  explained  that as a  result of  the passage  of HB 91  the                                                            
previous session,  the Department has worked with  the Department of                                                            
Law to draft regulations  and coordinate with the  coastal districts                                                            
implement   changes.  He  noted  the   legislation  predicted   less                                                            
involvement  from the Department  of Law;  however, the significant                                                             
changes  have  required  additional   efforts.  He  summarized  this                                                            
request would fund the  legal expenses of the transfer for remainder                                                            
of FY 04.                                                                                                                       
Senator Olson understood  these legal services are necessary because                                                            
the Administration  changed  the management  of  the Alaska  Coastal                                                            
Zone  Program.  He asked  if  the changes  would  require  long-term                                                            
review by the federal agencies  overseeing the Program. He wanted to                                                            
know if additional  funding would  be necessary in FY 05  and future                                                            
RANDY  BATES, Deputy  Director,  Office  of Project  Management  and                                                            
Permitting,  Office  of  the  Commissioner,  Department  of  Natural                                                            
Resources,  testified  that  the need  for  additional supplemental                                                             
funds is not  expected. He relayed  that the Office anticipates  the                                                            
federal  regulators would  complete  review of the  changes and  the                                                            
process would be completed.                                                                                                     
Co-Chair  Green  noted  the  Department  submitted  no  request  for                                                            
supplemental funds for fire suppression.                                                                                        
Mr. Bus  affirmed the budget  request contains  no funding  for fire                                                            
suppression  activities in FY 04,  although additional expenditures                                                             
were  necessary  for May  and June  of  FY 03  as indicated  in  the                                                            
ratification   section.  He  gave   the  estimate  for  those   fire                                                            
activities  was initially  $6.5  million,  but the  actual cost  was                                                            

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