Legislature(2011 - 2012)SENATE FINANCE 532
02/29/2012 09:00 AM Senate FINANCE
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SENATE FINANCE COMMITTEE February 29, 2012 9:04 a.m. 9:04:50 AM CALL TO ORDER Co-Chair Hoffman called the Senate Finance Committee meeting to order at 9:04 a.m. MEMBERS PRESENT Senator Lyman Hoffman, Co-Chair Senator Bert Stedman, Co-Chair Senator Lesil McGuire, Vice-Chair Senator Johnny Ellis Senator Dennis Egan Senator Donny Olson Senator Joe Thomas MEMBERS ABSENT None ALSO PRESENT Senator Kevin Meyer; Christine Marasigan, Staff, Senator Kevin Meyer; Darwin Peterson, Staff, Senate Finance Committee; Senator Cathy Giessel; Jim Cantor, Deputy Attorney General, Department of Law; Susan K. Bell, Commissioner, Department of Commerce, Community and Economic Development; Jo Ellen Hanrahan, Director, Division of Administrative Services, Department of Commerce, Community and Economic Development PRESENT VIA TELECONFERENCE Sara Fisher-Goad, Executive Director, Alaska Energy Authority SUMMARY SB 140 CATHINONE BATH SALTS CS SB 140 (JUD) was REPORTED out of committee with a "do pass" recommendation and with four previously published fiscal notes: FN1 (LAW), FN2 (DPS), FN3 (DOC), and FN4 (DOA). SB 144 STATE IMMUNIZATION PROGRAM CS SB 144 (FIN) was REPORTED out of committee with a "do pass" recommendation and with a new fiscal impact note from the Senate Finance Committee for the Department of Health and Social Services. SB 160 BUDGET: CAPITAL SB 160 was HEARD and HELD in committee for further consideration. SENATE BILL NO. 140 "An Act classifying certain substances as schedule IIA controlled substances; and providing for an effective date." 9:06:07 AM SENATOR KEVIN MEYER, recalled prior legislation regarding synthetic marijuana, and stated that synthetic cathinone "bath salts" were sold on the street much like cocaine. He stressed that using the cathinone bath salts had very harmful effects, and felt that they should be made illegal. He explained that cathinone bath salts were not currently detected by drug testing, so if they were to be made illegal, he hoped the crime lab would test for them. He explained that there were some minor changes that had been made to the bill in the Judiciary Committee. Originally, the bill had been introduced on behalf of the City of Anchorage, but the problem is state-wide. The City of Anchorage wanted "possession at any amount" to be classified a felony, but the Judiciary Committee determined that possession would only be considered a felony at large quantities. A first-time user of the bath salts with a small quantity would be considered a class-A misdemeanor. 9:08:32 AM Senator Olson wondered if bath salts would be considered a schedule 1-A controlled substance. CHRISTINE MARASIGAN, STAFF, SENATOR KEVIN MEYER, replied that the Drug Enforcement Agency had emergency-scheduled bath salts, so it would be considered a class-1 drug under federal law. However, in order for the bath salts to be considered illegal in the state, legislation needed to be passed. Co-Chair Hoffman noted the four previously published fiscal notes. He closed public testimony. Senator Ellis MOVED to report CS SB 140 (JUD) out of committee with individual recommendations and the accompanying fiscal note(s). There being NO OBJECTION, it was so ordered. CS SB 140 (JUD) was REPORTED out of committee with a "do pass" recommendation and with four previously published fiscal notes: FN1 (LAW), FN2 (DPS), FN3 (DOC), and FN4 (DOA). SENATE BILL NO. 144 "An Act temporarily reinstating the child and adult immunization program in the Department of Health and Social Services; and providing for an effective date." 9:11:14 AM Senator Ellis MOVED to ADOPT the proposed committee substitute for CS SB 144 (FIN), Work Draft 27-LS1068\R (Mischel, 2/21/21). Co-Chair Hoffman OBJECTED for purpose of discussion. DARWIN PETERSON, STAFF, SENATE FINANCE COMMITTEE, discussed the sectional changes in the work draft. He pointed out page 3, line 3, and explained that the previous version of SB 144 stated that for children under 19 years of age, the Commissioner may approve any vaccines that had been specifically prohibited. He noted that page 3, line 4 included new language that said for a child under 19 years of age, all vaccines required for school attendance would be provided. Also, there was a specific inclusion of meningococcal, human papillomavirus (HPV), and rotavirus. The previous version of the bill specifically included influenza, pneumococcal, and TDAP vaccines. The proposed work draft, on page 3, line 7, added the Shingles vaccine. He explained that the previous version allowed for the Commissioner to add or subtract vaccines for inclusion in the program based on nationally recognized public health standards and the availability of funding. The work draft changed that language by stating that the Commissioner can add vaccines for inclusion based on recommendations and the availability of funding, and only allowing the Commissioner to subtract vaccines from the program if the disease had been declared eradicated by the Centers for Disease Control. He stated that it would be incumbent on the legislature to be sure the program is fully funded for three years, since the Commissioner was not allowed to subtract vaccines. He noted the new fiscal note had increased the cost of the program to $4.632 million. Senator Olson wondered if the proposed committee substitute had the support of the Commissioner of the Department of Health and Social Services (DHSS). Mr. Peterson replied that a representative from DHSS was available to testify regarding their support. He explained that DHSS had expressed concern regarding the flexibility of the Commissioner to add or subtract vaccines. The Commissioner's oversight was restricted in order to prevent political influence to add or subtract vaccines. He stressed that the change made for the children vaccines allowed some flexibility for the Commissioner, because there was a statute that declared, In the judgment of the Commissioner of Health and Social Services, if it is necessary for the children and general public, then vaccines can be administered to children. Senator Olson wondered if the parents had the option of opting out of the HPV vaccine. Mr. Peterson replied that parents had that option. Co-Chair Hoffman removed his objection. There being NO further OBJECTION, it was so ordered. SENATOR CATHY GIESSEL, introduced herself. Co-Chair Hoffman requested a review of the SB 144. Senator Giessel stated that in previous years the federal government had provided the State of Alaska with $4.3 million for the vaccine program, and the amount had currently decreased to $700,000. She stated that the governor had included an additional $700,000 for the vaccination program in his proposed budget. SB 144 was designed to provide state funding for the remainder of the cost of for the vaccine program. She stressed that there would be a loss of preventative medicine in Alaska, if the bill did not pass. Senator Olson wondered if Senator Giessel was in favor of the proposed committee substitute. Senator Giessel replied that she was in favor of the proposed committee substitute. Senator Ellis MOVED to report CS SB 144 (FIN) out of committee with individual recommendations and the accompanying fiscal note. There being NO OBJECTION, it was so ordered. CS SB 144 (FIN) was REPORTED out of committee with a "do pass" recommendation and with a new fiscal impact note from the Senate Finance Committee for the Department of Health and Social Services. SENATE BILL NO. 160 "An Act making and amending appropriations, including capital appropriations and other appropriations; making appropriations to capitalize funds; and providing for an effective date." 9:18:20 AM Department of Law JIM CANTOR, DEPUTY ATTORNEY GENERAL, DEPARTMENT OF LAW, explained that the main budget request was to set up a computerized system for the Department of Law's (DLAW) charitable trust registration. It was the non-profit organization for professionals who helped the individuals raise money. There were $2500 charities in Alaska who were required to undergo a paper-driven registration process, which take an attorney and paralegal 750 hours a year to manage. He felt that the computerized system would benefit the charities and the public, but also free up DOL work hours to focus on other consumer-protection work for Alaskans. Senator Egan wondered if the program would be set up like the MyAlaska portal. Mr. Cantor replied that he did not know what portal would be used. Senator Egan felt that the MyAlaska was a very effective and easy portal. Mr. Cantor agreed to look into it. Senator Thomas wondered if this legislation would be related to the PickClickGive program. Mr. Cantor replied that many of the same charities were connected with the PickClickGive program. Senator Thomas surmised that the request was for money to automate or hire a contractor to advise DLAW on how to automate the program. Mr. Cantor affirmed Senator Thomas's declaration. 9:22:22 AM Department of Commerce, Community and Economic Development SUSAN K. BELL, COMMISSIONER, DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT, introduced herself. Commissioner Bell stated that the Department of Commerce, Community and Economic Development's (DCCED) capital budget request totaled $178 million. She felt that the proposed projects would help DCCED achieve their mission of promoting a healthy economy, strong communities, and protecting consumers in Alaska. She stated that the organization of the requests begain with the department priorities. She noted that there were more than $60 million in energy projects and $10 million in community development projects. RN 54070 Economic Development Initiative $1,770,000 Commissioner Bell explained that the project would augment marketing tactics including increased presence at industry trade shows, developing new online/web content, interactive media tools, outreach to the business community to identify new market potential and increase sales of Alaska products. Building on the Alaska Product Preference program housed in DCCED, we will work with Alaska-owned assets (i.e. the Alaska Railroad, Alaska Marine Highway, state prisons, the university system, and other Alaska institutions) and other commercial and institutional buyers to Buy Alaska. Through this effort, DCCED will focus on marketing core and emerging industries, natural resource endowment, strategic global location and the state's emerging Arctic Frontier as an opportunity for economic investment. She stated that his initiative will add much needed strategies and tactics to the state's marketing programs. First, it will leverage and include existing state programs now underperforming in their marketing efforts. Secondly, it will add value to general economic development programs in Alaska by matching businesses with potential markets. And, finally, it will begin to allow DCCED to extend Alaska's brand in the global marketplace. A fraction of the state's investment in the tourism and seafood industries, this investment allows DCCED to significantly expand awareness, value, and sales in other industry sectors. Commissioner Bell stated that in preparation for the state's five-year comments on Tongass Land Use Management Plan (TLMP), DCCED will review timber sales in Southeast Alaska for economic value, evaluate market demand, and develop recommendations that optimize Tongass resources and job creation potential. Co-Chair Hoffman queried the time of the last analysis for the evaluation of TLMP. Commissioner Bell replied that an analysis of TLMP was run five years prior. Commissioner Bell explained that DCCED will study potential for Alaska as an Arctic gateway for container ships, oil tankers, cruise ships, and other vessels to Asia, Europe, and other global destinations. The department's economic development specialists will contribute their resource development expertise and gather business and community leader opinions for the Tongass and Arctic projects. Additionally, the Division of Economic Development will contract for professional services to obtain the technical expertise needed on global market demand, industry trends, competition, and infrastructure development. 9:26:57 AM Co-Chair Hoffman felt that the subject was an important aspect to ensure that the rest of the United States identified Alaska as an Arctic nation. He wondered how much of the $1.77 million would be expended on the Arctic gateway item. Commissioner Bell replied that when the budget was initially drafted, $1.4 million would be used for the marketing initiative and $300,000 for the Arctic TLMP. She furthered that she was currently working with other agencies to determine the best distribution of money. Co-Chair Hoffman noted that Senator McGuire had informed the Arctic caucus that Alaska needed to be brought to the forefront as an Arctic nation. Co-Chair Hoffman stressed that the budget for FY 13 included a request for $1.77 million, but subsequent years to 2017 there was a projection of returning to the status quo of $400,000. He wondered why there would be a reduction in funding. Commissioner Bell replied that the first required much more funding due to market research, public relations efforts, and new marketing materials. She stated that completion of the scope of work for the Arctic and TLMP was anticipated in FY 13. Therefore, additional funding would not be needed. Senator Ellis commented that there were many opportunities for film companies to come to Alaska. He felt some frustration that there may not be enough staff in DCCED to accommodate the demand. He noted that he had encouraged the administration to increase the funds to meet the staffing requirements. He requested a comment on the film and television industry impact on DCCED. Commissioner Bell responded that DCCED had focused on working as a team, as well as with other agencies. Whereas, in previous years, there were specific people assigned to specific areas, so it was difficult to achieve full success in all that was required in economic development. She remarked that the film and television aspect of the department was highlighted as an initiative in order to evaluate the distinctive successes. 9:32:38 AM Senator Ellis commented that Alaskan product placement was integral to the film and television industry, and felt that cross-promoting was "brilliant." Senator Thomas wondered what portion of the marketing request would be expended for the potential of marketing Alaska's gas to Japan and other Asian nations. Commissioner Bell replied that there was work with other oil and gas industry executives to refine ways to bolster visibility in the oil and gas industry. Senator Thomas wondered if there was a concerted effort regarding oil and gas industry visibility, and felt that someone should focus more on that marketing potential. Commissioner Bell remarked that DCCED would keep Senator Thomas's concerns in mind as they continue to refine their planning. Senator Thomas stressed that Japan and other nations were looking to purchase gas from the east coast of the United States, and transporting it to Japan-which was almost half way around the world. He declared that Alaska was much closer to Japan, and felt that there needed to be a vigorous effort to sell gas to Japan. RN 54793 Strategic Minerals Implementation $450,000 Commissioner Bell explained that this project would provide funding to develop and begin to implement a strategy for developing the State of Alaska's vast rare earth element resources. The goal would be to have mineral development underway in 2-3 years. Alaska has an opportunity to pioneer research and industry development related to mineral extraction, processing, and value-added services. Given our mineral resources, strategic location, and access to national and international markets, Alaska can gain significance to a wide array of manufacturers and industries including renewable energy, automotive, and personal electronics. Developments related to rare earth elements and other strategic minerals will be applicable to Alaska's broader mining industry in terms of cost-effective recovery of metals and purification. 9:37:55 AM RN 38946 Community Block Grants $6,060,000 JO ELLEN HANRAHAN, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT, stated that the program was a long-term federally funded program that allowed the state to provide grants to communities and non-profit organizations. The grant recipients then provide services or benefits to low- or moderate-income individuals. The focus of the grants was to provide health and safety of local residents; reducing the cost of essential community services; and preventing poverty through education. Ms. Hanrahan explained that the federally funded community services block grant, which was $3 million in federal money. That federal money passed through the state to a community action agency: Rural Alaska Community Acton Program (RurAL CAP). RurAL CAP's mission is to protect the heritage of, while also improving the quality of life for, low-income rural Alaskans. This is accomplished through educational programs such as alcohol and drug abuse prevention programs, fetal alcohol syndrome prevention programs, and child development programs; adult training; affordable housing programs; advocacy for low-income individuals and instruction on how to advocate for themselves. Co-Chair Hoffman felt that the request was high, and queried if there was an upper limit on the grants. Ms. Hanrahan replied that the community services grants did not have an upper limit, and the community development block grants had an upper limit. Co-Chair Hoffman furthered that the upper limit of the community development block grants was $850,000. Ms. Hanrahan looked at the community development block grants, and stated that the program provided grants not to exceed $850.0 to municipalities for planning activities, infrastructure projects, and economic development activities which benefit low to moderate-income individuals. This program has been in existence since 1983. The U.S. Department of Housing and Urban Development (HUD) provides the funding, which ranges from $3,000.0 to $3,500.0 annually with a state required match of 2 percent. RN 38943 Community Development and Assistance $1,560,000 Ms. Hanrahan stated that this appropriation would provide development opportunities and assistance to communities and non-profit organizations for community development. These programs contribute to the department's mission of promoting a healthy economy and strong communities by providing economic growth in the communities it serves. 9:43:19 AM Ms. Hanrahan detailed the Community Air Photo Mapping Grant: Since 2002, DCCED has coordinated production of mapping products in 18 areas throughout the state. Funding for projects came from federal programs, state funded construction projects, regional entities, or the local community. The Denali Commission, DOT&PF, and USDA-Rural Development were the primary sources of matching funds to cover approximately 50 percent of the mapping contract; the other 50 percent came from regional or local partners. The Division of Community and Regional Affairs' role was to coordinate the funding partners, define the technical criteria for the final map product, and oversee the review of the maps as they were developed by contractors. The three areas of the state that remain to be mapped, using corrected orthophotos, are areas with potentially large project impacts. 1) The Northwest Arctic Borough will be affected by the establishment of shipping routes across Northern Canada and the US, and possibly significant mineral deposits. 2) North Slope Borough communities will be impacted by northern shipping routes and future oil development both on and offshore. 3) The Alaska Highway and Northern Parks Highway communities will be affected by gas line projects now in planning stages. The $1,100,000 in general funds will provide up to 50 percent of the funding to complete the projects. The remaining 50 percent will be provided by regional or local entities. Alaska's Floodplain and Erosion Management Program: This program's mission is to reduce public and private sector damage and losses from flooding and erosion. This is accomplished by providing municipalities that participate in the National Flood Insurance Program (NFIP), with program compliance technical assistance and as a resource for municipalities looking at joining the program. Department of Commerce, Community and Economic Development (DCCED) and the Federal Emergency Management Agency's (FEMA) Flood Mitigation Assistance program (FMAP) personnel work with the municipalities on every phase of potential projects -- applying for a planning grant, approving the resulting plan, approving a construction grant or contract and approving the completed project. FEMA provides funding for, community assistance, technical assistance, and assistance to specific communities. In FY2013, DCCED anticipates $120,000 from FEMA with required General Fund match of $40,000 for a project total of $160,000. The NFIP funding for this program requires that the state contribute 25 percent of the total project funds. This program has existed since 1997. Hazard Mitigation Assistance Grants: The National Flood Insurance Fund (NFIF) provides funding for Flood Mitigation Assistance (FMA), Repetitive Flood Claims (RFC) and Severe Repetitive Loss (SRL) programs. The grants are available for application annually and are pass-through grants to local communities to mitigate flood prone buildings or other eligible activities. There are no current specific grant requests pending; however, we expect up to $300,000 in requests may be submitted. Co-Chair Hoffman wondered why there was a $3 million reduction from the previous year's funding level. Ms. Hanrahan explained that the funding for the projects fluctuates depending on what projects were occurring. She noted that the funding was specific to what community development projects were in the queue. Co-Chair Hoffman felt that the request was the lowest it's been in over a decade. He felt that there was a high need, and wondered if the need did not exist and that was why the funding was not available. Ms. Hanrahan offered to provide information at a later date. RN 54869 State Support for Rural Roads and Waterfront Development Partnership $3,000,000 Ms. Hanrahan explained that this will provide matching funding to rural communities that have obtained federal grants through the Denali Commission and allow them to construct rural road and waterfront development projects. The Denali Commission will research, vet, and decide on the rural road projects that will be developed, and the Department of Commerce will make the grants to the recipients to complete funding for their project. Potential Projects could include but are not limited to: - Hughes - Moose Loop/Blueberry Road construction - Chignik Lake - Culvert Replacement construction - Craig - Community Streets Paving construction - Huslia - Community Streets Construction - Cherfornak - Boardwalk reconstruction design - Buckland - Uptown Road construction - Hydaburg - Saltry Point Road construction - Wainwright - Access Road construction - Kwigillingok - ATV Trail - design and construction - Haines - Third Avenue street construction - Toksook Bay - Community Roads construction - Point Lay - Subdivision Roads preliminary design - Northway - Housing Road design - Igiugig - Float Plane Road construction - Birch Creek - Feasibility Study - Wrangell - Wood Street design and construction - Pitkas Point - Main Street - preliminary design - Selawik - Barge Landing Road and Boardwalk Improvements Senator Olson wondered how one would become eligible to be a part of the program. Ms. Hanrahan replied that the proposals were run through the Denali Commission's Transportation Committee. 9:48:54 AM Senator Olson wondered if there was a dollar limit per community. Ms. Hanrahan replied that funding was dependent on the specific project and the funding source. Senator Egan wondered if each project had been vetted through DOT/PF. Commissioner Bell replied that the proposed projects would put state funding into projects that had been identified through the Denali Commission Committee Process. Senator Egan felt that some organized boroughs did not have the expertise to design the local service roads and trails. He felt that DOT/PF should assist the communities to design and assist in the construction management. Commissioner Bell explained that there were many different funding flows in order to provide communities with what was needed for assistance. Senator Thomas wondered if the specific projects would be available for the Denali Borough. Commissioner Bell agreed to provide that information. RN 38950 Alaska Energy Authority - Energy Projects $25,800,000 9:53:07 AM SARA FISHER-GOAD, EXECUTIVE DIRECTOR, ALASKA ENERGY AUTHORITY (via teleconference), stated that this request addresses multiple federally funded energy programs, including Bulk Fuel Upgrades, Rural Power Systems Upgrades, Alternative Energy and Energy Efficiency projects and the state funded energy planning project. This program contributes to the department's mission of promoting a healthy economy and strong communities by providing economic growth in the communities it serves. RN 49734 Alaska Energy Authority - Bulk Fuel Upgrades $7,000,000 Ms. Fisher-Goad stated that the goal of the Alaska Energy Authority (AEA) bulk fuel program is to upgrade non- compliant bulk fuel facilities in communities that meet program criteria. Upgrading bulk fuel facilities reduces the cost of energy by reducing or eliminating fuel loss from leaks and spills. By providing enough capacity for current and planned needs, communities may purchase fuel in larger quantities at a lower cost per gallon. RN 52498 Alaska Energy Authority - Rural Power Systems Upgrade $13,000,000 Ms. Fisher-Goad explained that the program concentrates on power production and delivery, including diesel powerhouse, hydroelectric, and electrical distribution. Due to high costs and limited economies of scale, most local communities cannot make the capital investments needed to meet accepted utility standards. Efficiency, reliability, safety and sustainability are primary drivers throughout the conceptual design, final design and construction process. It is not uncommon to see a 30-40 percent increase in fuel savings after a new powerhouse project is completed. After completion of the project, the rural utility is required to employ a qualified operator to ensure that the system is properly operated and maintained. AEA provides training and technical assistance to assist the community with proper operation of the new facility. $112 million is the estimated need to complete the Rural Power System Upgrades for the remaining 47 communities identified on the deficiency list. This is a long standing energy program that has expanded since fiscal year 1999 with federal funding from the Denali Commission. In FY2013, AEA anticipates $3 million in federal funds. The AEA anticipates using approximately $10 million in state funds for RPSU projects. RN 49735 Alaska Energy Authority - Alternative Energy and Energy Efficiency (AEEE) Programs $4,800,000 Ms. Fisher-Goad announced that the objective of the program was to lower the cost of power and heat to Alaska communities while maintaining system safety and reliability. The AEA alternative energy programs have received federal funding since the 1980s from USDOE and the EPA and recently expanded with funding from the Denali Commission and ARRA funds. A state general fund match of 25 percent to 100 percent is required for most federal AEEE programs. RN 52507 Alaska Energy Authority - Alaska Energy Plan Implementation $1,000,000 Ms. Fisher-Goad explained that this request addresses the state funded Alaska Energy Plan Implementation. The project contributes to the department's mission of promoting a healthy economy and strong communities by providing economic growth in the communities it serves. She stated that the objective is to develop a statewide Alaska energy plan. An estimated $1 million of general funds is required for the continued development of the energy plan, in particular AEA will work with regional organizations to initiate specific regional resource assessments and project development plans. The completion of the following activities and work tasks are required: - Determination of fuel usage by community for electricity, space heating and transportation - Determination of locally available energy sources - Evaluation of existing technology - Evaluation of energy delivery systems - Evaluation and rank of energy sources - Deployment to the private sector by providing business plan to existing or new enterprises, and - Organization of public workshops to assist in the communication of the plan by gathering feedback and providing periodic updates. Senator Thomas remarked a prior discussion regarding some of proposed projects. He noted that there may need to be some attention evaluating the costs of the projects in order reduces the cost of diesel usage. He looked at the rural areas and the removal of old diesel tanks and the hazards related to the removal of old diesel fuel tanks. He wondered if that issue had been addressed in the AEA. Ms. Fisher-Goad replied that there was a conversation about the result of the renewable energy projects, and there was work regarding those projects. She stated that the AEA was working to provide information for the Senate Finance Committee about the evaluations of the projects. She felt that the traditional, rural energy project requests were intended to look at the system holistically, to ensure good quality energy and powerhouse systems. 10:00:36 AM Co-Chair Hoffman stressed that many communities have tank farms that need to be replaced, and requested the need of approximately $6 million to replace the tanks. Ms. Fisher- Goad replied that it was not her intent to suggest that there was no need. She stated that there were some concerns regarding the type of tanks that needed to be replaced. She stressed that the AEA was looking into the conditions in all the communities. Co-Chair Hoffman said strongly that he understood the tank farms as even being hazardous to children. He felt the communities had a better understanding of the need for safe tank farm removal, rather than the point-of-view of AEA. Senator McGuire queried the process regarding determining the tank removal evaluation. She stated that she had similar concerns to Co-Chair Hoffman, and re-iterated that it was important to see the potential hazards in person in order to understand the urgency to remove the tank farms. Ms. Fisher-Goad replied that there was a process to decommission the tanks per EPA and DEC guidelines, and agreed to provide more information. Senator McGuire appreciated the work of the AEA, and felt that the AEA was under-staffed. She stressed that health and safety issues should be a priority. 10:06:19 AM Senator Egan wondered if there was any effort to implement a demonstration project a bio-mass program in Southeast Alaska. Ms. Fisher-Goad responded that the status of the Southeast Integrated Research Plan was still in draft form, and the public comments period would close on March 19, 2012. She stated that the Southeast Conference would have a mid-session summit the week of March 12, 2012, and AEA would work with the Southeast Integrated Research Plan in a technical session. The bio-mass recommendations from Blackened Beach had received mixed reviews, and an implementation plan was imperative. She stated that AEA's goal with regional plans was to ensure that the plans were useful to the regions that helped develop the plans. She stated that there were complications in the Southeast Integrated Research Plan were diverse with mixed energy systems, with a complicated cost of energy in the Southeast region. There were small, rural communities that were diesel-dependent, and other communities that had hydro resources. She stated that there was a plan to use a portion of the $2 million in the Energy Efficiency Program toward a bio-mass project; with respect to feasibility assessments and the technical evaluation and operating system evaluation. She noted that there was interest in interior Alaska to look at possible additional pellet systems for some community facilities. Senator Thomas looked at page 14, and pointed out the reference to nuclear energy in a draft report. He wondered when that final report would be available. Ms. Fisher-Goad replied that the final report was complete, and agreed to provide that report to the Senate Finance Committee. 10:11:11 AM Senator McGuire felt that the Southeast Energy Plan did not make sense. She remarked that there were existing plans for linking hydro and other power, that were not reflected in the Integrated Resource Plan. She wondered if AEA was relying solely on the Blackened Beach report. She felt that other regional assessments should be considered. Ms. Fisher-Goad responded that there were many comments and criticisms regarding the Integrated Research Plan. She stated that the Blackened Beach report recommended that the Southeast Intertie System was not economical for the region, because of the relative light loads. She agreed that there should be a consideration of other evaluations and analyses. She stressed that all the regions of Alaska wanted solid economic development plans. Senator Olson wondered if Ms. Fisher-Goad was aware of a legislative audit related to the procurement process, with an attached report with conclusions and recommendations. Ms. Fisher-Goad responded that she was aware of the report and that she had been, and AEA had addressed the issues and concerns in the audit. Senator Olson asked if his constituents should be satisfied with the procurement policies, recommendations with the signatory authority, and the formal records had been corrected. Ms. Fisher-Goad responded in the affirmative. RN 50682 Alaska Energy Authority - Renewable Energy Projects Round Five $25,000,000 Ms. Fisher-Goad explained that the Renewable Energy Grant Fund program was created in 2008 with the intent to appropriate $50 million annually for five years. The Legislature has appropriated $176.6 million for this program since its creation. This program contributes to the department's mission of promoting a healthy economy and strong communities by providing funds for energy projects that promote adequate, reliable, reasonably priced, and a safe supply of energy considered necessary for Alaska's basic infrastructure and economic and technological development. This project provides continuation funding for the Alaska Energy Authority's (AEA) Renewable Energy Fund Grant program as intended by the legislature. Four renewable energy fund application periods are complete. There has been $176.6 million approved for 207 renewable energy projects. By the end of 2012, AEA expects that 45 construction projects will have been completed at a total cost of $167 million - approximately half funded by the RE Fund and half paid for by other sources. The AEA estimates the annual fuel savings from these completed projects will be over 6 million gallons per year of diesel or equivalent. In response to a question by Co-Chair Hoffman, Ms. Fisher- Goad stated that the $25 million request would bring the total funding for the Renewable Energy Projects program to approximately $200 million. 10:18:12 AM Co-Chair Hoffman stated that the legislation had a target of $250 million when the program was initiated. The legislature wanted to "jump-start" the program by adding another $50 million, bringing the total to $300 million at the conclusion of five years. Over the two prior years, he felt that there was not as much support from the administration for this program. He wondered if the program was not effective. Ms. Fisher-Goad replied that the year prior had recommended funding from the legislature through the program for $36 million, and all the projects were funded with $10 million having been re-allocated to a prior round. She stressed that the issues were left to the governor to balance the budget. She agreed that the program was popular and effective, but there were some needs to provide technical assistance for communities that needed project development. The Alaska Energy Authority had recommended funding of $43 million. She felt that the target of $50 million was a good target, but there was extensive evaluation pertaining to funding, regardless of decisions based on budgetary analysis. Co-Chair Hoffman stressed that the vast majority of projects were also initiated by the legislature and not by the administration. He stressed that there were many discussions regarding technical assistance. He felt there were many areas of the state that needed technical assistance. Ms. Fisher-Goad agreed that there was a need regarding technical assistance, and added that there was extensive work with traditional rural programs to ensure that those needs were met. She furthered that there were conversations with other entities to be sure that training needs and basic management systems management were addressed. Co-Chair Hoffman felt the objective was a good start. RN 54175 Alaska Energy Authority - AVTEC Training Systems Upgrade $400,000 Ms. Fisher-Goad stated that funding requested for AVTEC Training Systems Upgrade is essential to support the state's investment in rural infrastructure. These equipment upgrades are necessary to provide power plant operators with current training on power plant infrastructure being built in rural communities. She explained that AS 42.45.400 requires AEA to provide rural utilities with technical assistance and training. Modern training facilities are necessary to support AEA's training program. 10:25:23 AM RN 32950 Alaska Energy Authority - Electrical Emergencies Program $330,000 Ms. Fisher-Goad explained that the Electrical Emergencies Program provides technical support when an electric utility has lost, or will lose, the ability to generate or transmit power to its customers and the condition is a threat to life, health, and/or property. This program contributes to the department mission of promoting a healthy economy and strong communities as electricity is considered essential for both community development and economic growth. Co-Chair Hoffman noted that there were two schools that had electrical and energy problems in his district. He hoped that they would not have to use the funds to address their needs, because he hoped that their problems were not at the emergency level. He wondered why their needs were not being addressed. Ms. Fisher-Goad replied that the Alaska Energy Authority worked with the school districts to be sure that the needs were adequate and they tried to be sure that they were coordinated. Co-Chair Hoffman wondered what Gary Baldwin says about the energy and electrical problems in Napakiak and Kipnuk. Ms. Fisher-Goad replied that she did not have a conversation with Mr. Baldwin. Co-Chair Hoffman wondered who had been in contact with the communities. Ms. Fisher-Goad agreed to provide that information with respect to the contact information for the school districts' needs. RN 54850 City of Fairbanks - Road Improvements $5,000,000 Ms. Hanrahan explained that the project will provide funding for the City of Fairbanks for road improvements and upgrades. Road improvement projects could include but are not limited to: roadway reconstruction, installation of new road-base materials, pavement improvements or replacement, dust mitigation, curb and gutter alignment, or sidewalk construction. 10:30:43 AM Senator Thomas requested furthered explanation of the projects. Ms. Hanrahan replied that the municipal projects were listed separately. Senator Olson wondered why this request was from DCCED and not DOT/PF. Ms. Hanrahan replied that DOT/PF dealt with mostly federal highway projects, and the projects were identified in the State Transportation Plan (STP). The DCCED requests reflected locally-owned roads within the municipalities. Senator Olson wondered how many other municipalities were requesting road-improvement funds. Ms. Hanrahan did not know, but the highlighted projects had been identified in the governor's priority package. RN 46659 City of Kenai - Road Improvements $3,000,000 Ms. Hanrahan explained that the project will provide funding to be used by the City of Kenai for municipal road improvements. Road improvement projects could include but are not limited to: pavement improvements or replacement, dust mitigation, roadway reconstruction, curb and gutter alignment, installation of new road-base materials, or sidewalk construction. RN 54861 City of Old Harbor - Airport Expansion $4,500,000 Ms. Hanrahan stated that the project will provide State funds, in a joint effort with the United States Marine Corps' (USMC) Innovative Readiness Training (IRT) program, to plan and permit a project to extend the airstrip at the Old Harbor Airport from its current 2,750 feet to 4,700 feet in length. Co-Chair Hoffman noted the time. RN 54853 City of Saxman - Saxman Harbor - Planning and Design $350,000 Ms. Hanrahan explained that the project would provide matching funds to the United States Army Corps of Engineers to fund the initial planning and design phases of the creation of a public harbor in the City of Saxman. The Saxman Harbor will be one of a limited number of harbors in Alaska providing year round opportunities for ice-free, protected moorage, and will provide vital public marine infrastructure needed for the continued growth and development of the State's economy. RN 54871 Fairbanks Northstar Borough - Air Quality Mitigation $2,500,000 10:35:32 AM Senator Thomas noted that the money for the project was to be used for minimizing emissions and improving air quality in the Borough, and wondered how much money was dependent on wood stove change out program. Ms. Hanrahan replied that did not know, and stated that there were active grants contributing to that conversion. She stated that there was no specific budget for the conversion. Senator Thomas surmised that there were no specific categories in the program that outlined intended expenditures for the various areas of the wood stove conversion program. Ms. Hanrahan did not have a breakdown of that budget, but agreed to provide information regarding availability of a budget. RN 42004 Fairbanks Northstar Borough - Arctic Winter Games Host Society $500,000 Senator Thomas noted that the request was aligned with the Arctic Winter Games request on page 50. He stressed that there were games in 2012 in Whitehorse, and no 2013 games. He wondered what year the money was intended. Co-Chair Hoffman declared that the information would be distributed to the members at a later date. RN 54889 Haines Borough - Haines Boat Harbor and Breakwater Improvements $4,500,000 Ms. Hanrahan explained that the project will provide funding for the construction of a wave barrier or rubble mound breakwater to protect the newly installed float system at the Haines small boat harbor. RN 45297 Kenai Peninsula Borough - Road Projects $5,000,000 Ms. Hanrahan stated that project will provide funding for road improvements, upgrades and modifications for the Kenai Peninsula Borough. RN 54852 Ketchikan Gateway Borough - Rehabilitation/Replacement of Off-System City Bridges $9,250,000 Ms. Hanrahan explained that project will fund the replacement and rehabilitation of off-system city bridges and trestles in Ketchikan. The City of Ketchikan's municipal bridges and trestles are deteriorating at an accelerated rate, due to weather, geography and general exposure. Long term replacement of an aging bridge and trestle infrastructure will mitigate public safety hazards, provide safe access for the public and emergency services, alleviate traffic and parking issues, and improve slop stability and drainage issues for adjacent properties. RN 54854 Matanuska-Susitna Borough - Road Bond Package State Match $20,000,000 Ms. Hanrahan stated that the project will provide a 50 percent state match to a portion of the funding that was passed as part of a Matanuska-Susitna Borough Proposition 2 for "Transportation Bonds" to construct municipal roads throughout the Borough. 10:38:35 AM RN 50334 Wasilla - Lake Lucille Dam Improvements $300,000 Ms. Hanrahan explained that project would provide funding for emergency repairs at the Lake Lucille Dam due to structural failure at the dam. The main issue currently is the water level of the lake and the potential impact on property owners should the dam fail entirely. RN 52278 Whittier - Shotgun Cove Road - Phase 4 $2,000,000 Ms. Hanrahan stated that the project funding would extend Shotgun Cove Road 2.5 miles, from Emerald Cove Trailhead to Trinity Point. This paved, 24 foot road will improve the quality of life and produce much needed revenue sources for the City of Whittier, its residents, and the local businesses. Completion of the Shotgun Cove Road project would open up presently inaccessible Federal, State, and Municipal lands to recreational use and private land ownership. Co-Chair Hoffman listed the remaining items: RN 45816 Alaska Air Carriers Association, Inc. - Medallion Foundation $250,000 RN 49915 Alaska Manufacturing Extension Partnership - State Matching Support $400,000 RN 54602 Alaska State Fair - Sewer System Expansion and Upgrades $1,142,875 RN 38713 Arctic Power - Arctic National Wildlife Refuge (ANWR) Program $160,000 RN 41959 Arctic Winter Games State Team Alaska - State Participation Grant $315,000 RN 54847 Association of Village Council Presidents (AVCP) - Aviation School Dormitory Construction $2,470,100 RN 54846 Association of Village Council Presidents (AVCP) - Yukon- Kuskokwim Corridor Planning and Development Project $3,000,000 RN 54833 Copper River Native Association - Copper River Health Clinic Construction $8,000,000 RN 46475 Friends of the Jesse Lee Home $5,000,000 RN 52182 Kenaitze Indian Tribe - Dena'ina Health and Wellness Center Construction - Phase 2 $10,000,000 RN 50409 Life Alaska Donor Services, Inc. - Donor Program $35,000 RN 48513 Marine Exchange of Alaska - Alaska Vessel Tracking System Upgrades and Expansion $600,000 RN 53771 Matanuska-Susitna Service for Children and Adults $4,000,000 RN 54703 State Owned Hatcheries - Upgrades and Maintenance $11,547,000 RN 52164 Cook Inlet Aquaculture - Trail Lakes Hatchery $1,025,000 RN 52165 Cook Inlet Aquaculture - Tutka Bay Hatchery $699,000 RN 52168 Kodiak Regional Aquaculture - Kitoi Bay Hatchery $1,550,000 RN 52628 Kodiak Regional Aquaculture - Pillar Creek Hatchery $909,000 RN 52167 Northern Southeast Regional Aquaculture - Hidden Falls Salmon Hatchery $1,237,000 RN 52163 Prince William Sound Aquaculture - Cannery Creek Hatchery $5,263,000 RN 52161 Prince William Sound Aquaculture - Main Bay Hatchery $864,000 AMD 38948 National Petroleum Reserve - Alaska Impact Grant Program $4,896,872 Senator Olson queried the distribution on page 84, and wondered if it was the total funds, including the $4.8 million. Ms. Hanrahan responded that $4.8 million was the total distribution for the project. SB 160 was HEARD and HELD in committee for further consideration. Co-Chair Hoffman discussed housekeeping. ADJOURNMENT 10:45:11 AM The meeting was adjourned at 10:45 AM.