Legislature(2003 - 2004)

01/21/2004 01:43 PM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                           JOINT                                                                                                
              HOUSE & SENATE FINANCE COMMITTEE                                                                                  
                          MEETING                                                                                               
                     January 21, 2004                                                                                           
                         1:43 P.M.                                                                                              
                                                                                                                                
TAPE HFC 04 - 8, Side A                                                                                                         
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Harris called the House Finance Committee meeting                                                                      
to order at 1:43 P.M.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
HOUSE                                                                                                                         
                                                                                                                                
Representative John Harris, Co-Chair                                                                                            
Representative Bill Williams, Co-Chair                                                                                          
Representative Kevin Meyer, Vice-Chair                                                                                          
Representative Mike Chenault                                                                                                    
Representative Eric Croft                                                                                                       
Representative Hugh Fate                                                                                                        
Representative Richard Foster                                                                                                   
Representative Mike Hawker                                                                                                      
Representative Carl Moses                                                                                                       
                                                                                                                                
SENATE                                                                                                                        
                                                                                                                                
Senator Gary Wilken, Co-Chair                                                                                                   
Senator Fred Dyson                                                                                                              
Senator Lyman Hoffman                                                                                                           
Senator Donny Olson                                                                                                             
Senator Ben Stevens                                                                                                             
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Reggie Joule                                                                                                     
Representative Bill Stoltze                                                                                                     
                                                                                                                                
Senator Lyda Green, Co-Chair                                                                                                    
Senator Con Bunde, Vice-Chair                                                                                                   
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Senator  Gary Stevens;  Loren  Leman, Lieutenant  Governor,                                                                     
State of  Alaska; Jeffrey Staser, Federal  Co-Chair, Denali                                                                     
Commission; Yuri Morgan, Legislative Representative, Denali                                                                     
Commission                                                                                                                      
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
None                                                                                                                            
                                                                                                                                
 GENERAL SUBJECT(S):                                                                                                          
                                                                                                                                
                 OVERVIEW: DENALI COMMISSION                                                                                  
                                                                                                                                
The following overview was taken in log note format.  Tapes                                                                     
and handouts will be on file with the House Finance                                                                             
Committee through the 23rd Legislative Session, contact 465-                                                                    
2156. After the 23rd Legislative Session they will be                                                                           
available through the Legislative Library at 465-3808.                                                                          
                                                                                                                              
                                                                                                                                
                                                                                                                                
 LOG SPEAKER                DISCUSSION                                                                                      
                                                                                                                                
                            TAPE HFC 04 - 8, SIDE A                                                                        
 000 Co-Chair Harris        Convened the Joint House and Senate                                                                 
                            Finance Committee meeting at 1:43 P.M. to                                                           
                            hear the overview presented by the Denali                                                           
                            Commission.                                                                                       
                                                                                                                                
                            DENALI COMMISSION                                                                               
 132 LOREN LEMAN,           Provided a brief history of the Denali                                                              
      LIEUTENANT GOVERNOR, Commission.  The Governor named the Lt.                                                              
      STATE OF ALASKA       Governor to be the state Co-Chair of the                                                            
                            Denali Commission.  Mr. Staser is the                                                               
                            counter-part as the federal Co-Chair.                                                               
                            There are five other commissioners                                                                  
                            representing statewide entities in Alaska                                                           
                            that have significant input in dealing                                                              
                            with infrastructure needs.  They are:                                                               
                              · Alaska Federation of Natives                                                                    
                              · Associated General Contractors of                                                               
                                Alaska                                                                                          
                              · Alaska Municipal League                                                                         
                              · Organized Labor                                                                                 
                              · University of Alaska.                                                                           
                            He added that the commission was                                                                    
                            established in 1998.  In 1999, it was a                                                             
                            $30 million dollar program.  It has grown                                                           
                            to the current level of $110 million                                                                
                            dollars.  The Commission is to be a                                                                 
                            collaborative effort between State and                                                              
                            federal agencies.  The staff is composed                                                            
                            of people loaned from these other                                                                   
                            agencies.  Yuri Morgan on the Denali                                                                
                            Commission represents the Legislature.                                                            
 423 Lieutenant Governor Continued, the investments to date have                                                                
    Leman                 been primarily in energy projects &                                                                   
                            primary health care facilities.  The                                                                
                            Commission has substantial investments in                                                           
                            the work force training programs.                                                                 
 535 Lieutenant Governor The goal of the Commission is                                                                          
      Leman                 sustainability.  The investments made,                                                              
                            need to be able to maintain themselves.                                                           
                           Communities need to demonstrate that they                                                            
                           will be able to maintain their                                                                       
                           facilities.                                                                                        
602 Senator Wilken         Noted that Senator Green would be late                                                               
                           for the meeting.                                                                                   
619 JEFFREY STASER,        Offered to answer questions of the                                                                   
      FEDERAL CO-CHAIR,    Committee.  He applauded comments made by                                                            
      DENALI COMMISSION    Lieutenant Governor Leman noting that he                                                             
                           had captured the work of the Commission                                                              
                           in a "nut-shell".                                                                                  
704 Co-Chair Harris        Pointed out that Denali Commission                                                                   
                           projects should be self -sustainable and                                                             
                           able to stand on their own.  He inquired                                                             
                          that process.                                                                                       
726 Mr. Staser             Responded that the originally guidelines                                                             
                           consist of making sure that any projects                                                             
                           will be around for future generations.                                                               
                           That is the philosophy of all the work of                                                            
                           the Commission.  Public dollars should                                                               
                           not be invested without some sort of                                                                 
                           common sense & accountability in the                                                                 
                           future.                                                                                            
812 Mr. Staser             Elaborated on "common sense".  The draft                                                             
                           investment policy determines what is                                                                 
                           sustainable.  Referenced projects at                                                                 
                           Shishmaref and decided as a Commission                                                               
                           that it would be more problematic to                                                                 
                           renovate an existing clinic than build a                                                             
                           new one.  The commissioners then                                                                     
                           discussed how the public would know that                                                             
                           certain projects are sustainable.                                                                  
917 Mr. Staser             Sustainability has been described as a                                                               
                           goal.  That differs from affordability.                                                              
                           The policy includes good faith & natural                                                             
                           circumstance criteria that the Commission                                                            
                           looks at.  Each project is unique and                                                                
                           includes those considerations.                                                                     
958 Senator Wilken         Asked about the future and the way in                                                                
                           which the Denali Commission is funded by                                                             
                           the federal government and is there a                                                                
                           system by which the Commission is                                                                    
                           guaranteed on-going funding.                                                                       
1030 Mr. Staser            Responded that all agencies go through                                                               
                           reauthorization hearing every six years.                                                             
                           The Commission has recently been                                                                     
                           reauthorized.  The funding streams come                                                              
                           from five separate appropriations bills.                                                             
                             · One comes from Trans Alaska Pipeline                                                             
                                Liability Trust Fund                                                                            
                             · Currently legislation pending, the                                                               
                                National Energy Bill, which will                                                                
                                endow the Commission with royalties,                                                          
                                received from National Petroleum                                                                
                                Reserve-Alaska Development, which is                                                            
                                the federal share of royalties and                                                              
                                that bill has not yet passed.  The                                                              
                                strength of the Commission is how                                                               
                                credible they are with other state                                                              
                                and federal agencies and nationally.                                                          
 1200 Mr. Staser            Assessed that Alaska has a unique tale to                                                           
                            tell.  There are unique challenges and                                                              
                            the program is becoming stronger.                                                                 
 1309 Lieutenant Governor Added that the President's proposed base                                                              
      Leman                 budget funding is a small amount which                                                              
                            has always been rebuilt in the U.S.                                                                 
                            Senate.                                                                                           
 1354 Senator Wilken        Clarified that there are four revenue-                                                              
                            funding streams.                                                                                    
                              · Grant funding with a maximum of six                                                             
                                years before reauthorized                                                                       
                              · Pipeline Liability Fund                                                                         
                              · 20% of the federal governments 50%                                                              
                                of rents and royalties from the NPRA                                                            
                                would accrue as long as there is a                                                              
                                Denali Commission                                                                               
                              · other federal agencies that the                                                                 
                                Denali Commission may be able to                                                                
                                request funds from.                                                                           
 1451 Representative        Voiced his appreciation for all the work                                                            
      Foster                done by the Denali Commission in Western                                                            
                            Alaska.  He understood that initially,                                                              
                            the intent of the Commission was repairs                                                            
                            and then switched to health and safety                                                              
                            and the clinics.  He asked what the                                                                 
                            Commission would concentrate on in the                                                              
                            next couple years.                                                                                
 1554 Mr. Staser            Clarified that the Commission begins with                                                           
                            the bulk fuel storage tanks with an exit                                                            
                            strategy.  In collaboration with the                                                                
                            energy program, there has been a health                                                             
                            program created in the last two years as                                                            
                            a part of health and human services.                                                                
                            Total funds spent, 22% have gone into                                                               
                            health projects.  61% have gone into                                                                
                            energy projects.   After the two main                                                               
                            programs, projects drop off                                                                         
                            significantly.                                                                                    
 1738 Mr. Staser            Anticipates that with the bills drafted                                                             
                            and introduced to Congress, the                                                                     
                            Commission will be involved with                                                                    
                            transportation in the future.  The                                                                  
                            Commission is currently staffing that                                                               
                            with Mr. Yuri Morgan, the State's                                                                   
                            representative who is responsible for                                                             
                           designing the transportation program.                                                                
                           The next big item will be the access                                                                 
                           transportation arena.                                                                              
1812 Representative Fate  Commented on the economic development                                                                 
                           objectives in rural Alaska.  He noted                                                                
                           that economy between FY99 - FY03 and that                                                            
                           FY04 continues to be low.  He spoke to                                                               
                           economic activity in rural Alaska.                                                                 
1901 Mr. Staser            Stated that everything depends on                                                                    
                           economic development.  The private sector                                                            
                           is "good" at that.  The government is                                                                
                           sometimes less effective.  It is an                                                                  
                           essential partnership and government must                                                            
                           create healthy infrastructure.  State and                                                            
                           Commission responsibilities are energy                                                               
                           and then health and that the Commission                                                              
                           will be getting more involved with                                                                   
                           economic development.                                                                              
2019 Senator Ben Stevens Commented that 50 construction projects                                                                
                           building rural health clinics is economic                                                            
                           development.  The health care industry is                                                            
                           the fastest  growing business in the                                                                 
                           State.  He requested that the Denali                                                                 
                           provide an impact statement addressing                                                               
                           the health care clinics and their                                                                    
                           relationship on demand of the general                                                                
                           fund-spending match.                                                                               
2135 Senator Ben Stevens stressed that the impacts should be known                                                              
                           regarding future outcomes.  The proposed                                                             
                           project are good and yet it must be                                                                  
                           understood the long-term effect for                                                                  
                           Alaska.                                                                                            
2216 Mr. Staser            Offered to provide that information.                                                               
2230 Lieutenant Governor Added that objective is important to the                                                               
      Leman                Administration and that unfunded                                                                     
                           liabilities should not be created.                                                                   
                           Instead, the health care facilities                                                                  
                           should have the availability of better                                                               
                           health care without increased liability                                                              
                           costs to the State.                                                                                
2304 Senator Ben Stevens Thought that there would be an increased                                                               
                           cost to the State.  He asked that the                                                                
                           Commission demonstrate that this would be                                                            
                           better care and service for better value.                                                          
2332 Lieutenant Governor Commented on the dedication he attended                                                                
      Leman                for the new regional clinic.  That clinic                                                            
                           has better capacity than any in the past                                                             
                           and provides better care without shipping                                                            
                           people into Anchorage.  He addressed                                                                 
                           staffing the facility.                                                                             
2438 Senator Hoffman       Noted the $32 million dollars earmarked                                                              
                           for initiatives funding. He asked how                                                                
                           they would be limited.                                                                             
 2457 Mr. Staser            Responded that the earmarks are listed in                                                           
                            the bill.  What is listed are allocations                                                           
                            of funds as a staff recommendation to the                                                           
                            Commission.  Example:  Teacher Housing -                                                            
                            recommended up to $10 million dollars and                                                           
                            are looking for ways to partner with the                                                            
                            State.  The Commission does not want to                                                             
                            compete with other housing projects                                                                 
                            unless to leverage added strength.                                                                  
                            Earmarks have been made through the                                                                 
                            congressional intent language.  The                                                                 
                            Commission has the responsibility to each                                                           
                            of the collective parties at the table.                                                           
 2624 Senator Hoffman       Asked if the allocations were required to                                                           
                            be spent in that fiscal year.                                                                     
 2640 Mr. Staser            Stated that normally the bills are passed                                                           
                            with no-year language and authorized                                                                
                            until spent.  The Commission attempts to                                                            
                            authorize the funds each year in order to                                                           
                            demonstrate that there is a greater need.                                                           
                            To date, all the money has been                                                                     
                            obligated each year.                                                                              
 2703 Co-Chair Harris       Asked about local hire requirements in                                                              
                            the rural areas.                                                                                  
 2717 Lieutenant Governor Responded that one of the objectives is                                                               
      Leman                 for the locals to be hired for                                                                      
                            construction and training for on-going                                                              
                            operations of the facilities.  The manner                                                           
                            in which the projects are designed will                                                             
                            maximize the local hire and has been                                                                
                            successful.                                                                                       
 2822 Mr. Staser            The reason that the Commission got                                                                  
                            involved with training was to guarantee                                                             
                            that there is a local hire.  Worked with                                                            
                            the contractors to guarantee specific                                                               
                            jobs.                                                                                             
 2856 Mr. Staser            Added that the University also supports                                                             
                            local hire.  That will keep salaries in                                                             
                            State while maintaining services.                                                                 
 2930 Co-Chair Harris       Acknowledged how important that is.  He                                                             
                            noted the joint chairmanship between                                                                
                            federal and State government.  He                                                                   
                            questioned the amount of cooperation in                                                             
                            reference the State budget.                                                                       
 3011 Lieutenant Governor Commented that the goal is that there is                                                              
      Leman                 "a lot of cooperation".  In the past                                                                
                            year, it has improved greatly.  At this                                                             
                            time, there has been a lot of cooperation                                                           
                            between the departments.  Commissioner                                                              
                            Blatchford and Commissioner Gilbertson                                                              
                            have been supportive and they are the two                                                           
                            most involved with the projects.                                                                  
 3227 Mr. Staser            The legislature has had a "hands on"                                                              
                           since inception.  The Commission attempts                                                            
                           to understand and identify the                                                                       
                           priorities.  He added that the Denali                                                                
                           Commission has worked with the                                                                       
                           Legislative Budget and Audit Committee                                                               
                           (LBA).  The State continues to have a                                                                
                           major roll in determining the priorities.                                                          
3249 Representative        Reiterated his appreciation of the  work                                                             
      Foster               done by the Commission.  He pointed out                                                              
                           that in Western Alaska, there are only                                                               
                           142 State jobs.  Of the 14 departments,                                                              
                           there are none.  The most important                                                                  
                           presence in Western Alaska is the Denali                                                             
                           Commission.  He emphasized that without                                                              
                           the Denali Commission, western Alaska                                                                
                           would be in dire straights.                                                                        
3419 Lieutenant Governor Reminded Representative Foster of the                                                                  
      Leman                statewide presence in the Nome area.  He                                                             
                           added that the Denali Commission does                                                                
                           have their annual report available on CD                                                             
                           and accessible through the website with                                                              
                           updated information on the Commission.                                                             
3521 Mr. Staser            Concluded that if the Commission is                                                                  
                           working, everyone in the State is                                                                    
                           represented.  All information is shared.                                                             
                           He agreed that there are not enough                                                                  
                           people to travel statewide and that is                                                               
                           why the collaboration is necessary.                                                                
3619 Co-Chair Harris       ADJOURNMENT                                                                                        
                           The meeting was adjourned at 2:20 P.M.                                                             
                                                                                                                                

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