CS FOR HOUSE BILL NO. 1001(FIN) An Act making appropriations relating to fire suppression, cleanup, and response and to disaster relief; and providing for an effective date. Discussion was had with Nancy Slagle and Nico Bus. An amendment by Senator Sharp reduced disaster relief funding in Sec. 3 to $100.0. SCS CSHB 1001 (Fin) was then REPORTED OUT of committee with a unanimous "do pass" recommendation. Co-chairman Halford directed that CSHB 1001 (Fin) be brought on for discussion and explained that it contains fire response and disaster portions of legislation earlier transmitted to the House. He noted that numbers within CSHB 1001 (Fin) are the same as in the other legislation, and he asked that the administration provide an update. NANCY SLAGLE, Director of Budget Review, Office of Management and Budget, came before committee. She explained that the bill contains estimates of anticipated fire costs as of two days ago. Since that time, the Big Lake (Miller Reach) fire has jumped several roads and expanded to over 37,500 square acres. The estimate of the number of homes destroyed ranges from 100 to 200. There has been no opportunity to conduct an assessment to determine the extent of damages. It is anticipated that will occur tomorrow when borough, state, and FEMA representatives are in the area. Estimates developed by the Dept. of Natural Resources indicate need for double the amount originally anticipated, due to the extent of the fire and the way it is traveling. (Senator Phillips arrived at this time.) The state has received approval from FEMA for assistance in dealing with the fire and anticipates a 70/30 split between federal and state governments. The state is estimating a $20 to $25 million need. Ms. Slagle attested to need to put six teams on the fire at Central in an effort to control it. Because of ongoing fires that do not fall under FEMA assistance, the administration will need approximately $10 million in general funds and $15 million in federal moneys. That is the Dept. of Natural Resources' portion. Ms. Slagle reiterated that since an assessment has not yet been made, impact upon the Dept. of Military & Veterans Affairs is unknown. Numbers in that area have thus not been updated. At the request of Senator Rieger, Ms. Slagle reiterated need for $10 million in general funds and $15 million in federal moneys. She explained that the foregoing does not reflect a 70/30 split because the state is dealing with other fires that do not come under FEMA assistance. She reiterated need to deal with other fires and again cited the fire at Central. Co-chairman Halford voiced his understanding that emergency fire suppression language provides authority to expend moneys without appropriation. Ms. Slagle concurred. She acknowledged that as part of the disaster declaration process the administration has ability to access other appropriations if the legislature is not available to provide supplemental funding. In the past the administration has established an agreement that utilizes anticipated lapse funding to ensure an appropriation to continue the effort and pay fire fighters. That is how the administration deals with the situation during the interim. Co-chairman Halford advised that the legislation most likely to pass (SB 1005) contains numbers from two days ago. He acknowledged that the chance of CSHB 1001 (Fin) being acted upon, as well, may be difficult. He said it is appropriate to amend the House bill to provide updated numbers but reiterated that the bill might not be timely. The Co- chairman remarked that SB 1005, with its $14 million, combined with general authority for emergency expenditure without appropriation provides tools for immediate response. Supplementals would then have to be reviewed at a later time. Ms. Slagle agreed. She attested to an understanding of the process and timing involved and advised that the administration felt it important to come forward with updated numbers. Co-chairman Halford observed that funding provided to the municipality is "now way under what their unrefunded costs are going to be . . . ." He then suggested that the committee incorporate current estimates, with the recognition that HB 1001 may not be a vehicle that proceeds. Co-chairman Halford next explained that if CSHB 1001 (Fin) remains as is, Secs. 1 and 2 would add another $5 million in both general and federal funds; an additional $200.0 to the Matanuska-Susitna Borough; and $4 million in disaster relief (Sec. 3) to SB 1005. He then questioned whether the committee wished to add funding for disaster relief at this time. He suggested that the bill be passed from committee with Secs. 1 and 2 in tact and assume that both bills will pass. Ms. Slagle added that the administration has the ability to go to the Legislative Budget and Audit Committee for additional federal receipt authority. Senator Sharp then MOVED to delete Sec. 3. Co-chairman Halford called for objections. No objection having been raised, Sec. 3 was DELETED* from the bill. (*See page 6, of these minutes for subsequent action rescinding deletion.) Senator Randy Phillips MOVED for passage of SCS CSHB 1001 (Fin) with individual recommendations. Co-chairman Halford called for objections. Senator Rieger voiced his recollection that the split on the Koyukuk floor was greater than 70/30. He then asked why the split in federal and state funding is not higher for the present fire. Co- chairman Halford explained that the appropriation within Sec. 1 applies to "the actual fire fighting side." Moneys for the Koyukuk flood related to disaster relief. That split was 85/15--much higher than in the present situation. (Senators Donley and Zharoff arrived at this time.) Ms. Slagle further explained that the state has received FEMA funding, based on the 70/30 split, for fire fighting. The administration is also requesting a disaster declaration from President Clinton which would access additional funding similar to that received for the Koyukuk flood. That provides moneys for temporary housing, individual family grants, public assistance, etc. It also entails a different split in funding. The administration is in the process of putting that request together for transmittal to Washington, D.C. Approval would change the split to 75/25. In the case of the Koyukuk flood, because of the extent of damages and the size of the disaster, the state was able to obtain a better split between federal and state support. Under FEMA provisions, if fire fighting costs for the year exceed $30 million, the federal government will "actually kick in 100 percent." There is thus a point in time when the federal government will provide additional funding due to the size and extent of the disaster. Senator Rieger asked if FEMA funding would provide 100 percent in excess of $30 million or apply retroactively. Ms. Slagle responded, "for the whole . . . for this particular fire." The Senator noted that damage estimates are between $20 and $30 million at the present time. Ms. Slagle concurred, advising of estimates of approximately $22 million. The administration is hoping damages will not be greater than that. Senator Rieger asked what the administration would do with the general funds if damages reach beyond $30 million, and the federal government covers the entire amount. Ms. Slagle said general fund dollars would be used for fires not covered by FEMA. Remaining funds would then lapse. The funds would not be used for other purposes. Senator Rieger voiced need for "some kind of legislative review" and cited review by Legislative Budget and Audit. He voiced discomfort over appropriation of $10 million when the cost may be covered by the federal government and reiterated need for legislative involvement. Ms. Slagle stressed that the administration would keep the legislature updated. She advised that she would be attending the June 24 LBA meeting and would provide an update at that time. Senator Phillips concurred that the legislature could ask that the administration update LBA at monthly meetings during the interim. Co-chairman Halford acknowledged need for some kind of statement within appropriation language. He expressed concern that damages from the present MatSu fire would reach $30 million, and the legislature will have over- appropriated. Senator Rieger suggested that language could designate expenditure for a particular named fire. Ms. Slagle reiterated that general funds are slated to deal with other ongoing fires as well as fires that might occur throughout the year. Members acknowledged the driest year in two decades and potential for a bad year for fires. NICO BUS, Acting Director, Administrative Services, Dept. of Natural Resources, came before committee. He advised that of damages from the Miller Reach fire, which have reached $22 million, $15 million (70 percent) would be federal and the state portion would total $7 million. The remaining $3 million from the $10 million appropriation would have to cover the remainder of the fire season. Mr. Bus acknowledged that language could be added to the appropriation to require Miller Reach reimbursement for general funds to return to the treasury. All figures are merely estimates at this time. Senator Zharoff attested to the devastating nature of the fire and loss of homes and property by families. He questioned committee concern that fire suppression funding might be spent for other purposes and spoke against attempts to tie the hands of the administration. Co-chairman Halford pointed out that the administration has testified that there is no limit to the amount of money it can spend, without an appropriation, under existing emergency conditions. With one-third of the nation's top task force headed to the Miller Reach fire, the concern is that if the weather does not change, the fire cannot be stopped. Senator Rieger stressed that two points need to be made: 1. No one is suggesting that money be held back. 2. Debate relates to how the money is appropriated. The proposed approach recently led to a Legislative Budget and Audit report on the $70 Koyukuk flood. He stressed need for good control of finances in management of disasters. The legislature also has a fiduciary responsibility to appropriate moneys properly. Co-chairman Halford noted that the bill presently consists of Secs. 1 and 2. He then queried members regarding an amendment and voiced need to move the bill. Senator Phillips suggested that the bill be moved, as is, with the understanding that the administration would come before Legislative Budget and Audit with updates on the situation. Mr. Bus said the department could make update to LBA or provide a statement of intent in writing. Senator Sharp voiced his understanding that the $10 million appropriation within Sec. 1 would be controlled by the Dept. of Natural Resources which has long-standing procedures for monitoring and detailing costs. He remarked that because of that, the state should not encounter a situation similar to the Koyukuk flood which was administered by the Dept. of Military & Veterans Affairs. He said he was comfortable with Legislative Budget and Audit review. Co-chairman Halford restated the motion for movement of SCS CSHB 1001 (Fin) with individual recommendations. Senator Phillips added the understanding that the administration would come before Legislative Budget and Audit to provide a detailed accounting. No objection having been raised, SCS CSHB 1001 (Fin) was REPORTED OUT* of committee with a unanimous "do pass" recommendation. (*See following rescinding action.) ADJOURNMENT The meeting was adjourned at approximately 11:55 a.m. RECONVENE Co-chairman Halford reconvened the meeting at approximately 11:57 a.m. He noted that the title of CSHB 1001 (Fin) contains a reference to disaster relief funding which was removed from SCS CSHB 1001 (Fin) by deletion of Sec. 3 from the House bill. To avoid need for a title change and an accompanying resolution at this point in the special session, the Co-chairman suggested that the bill contain a nominal appropriation to disaster relief. Senator Sharp MOVED to bring CSHB 1001 (Fin) back before committee. No objection having been raised, it was so ordered. Senator Rieger then MOVED to rescind committee action reporting SCS CSHB 1001 (Fin) from committee. No objection having been raised, committee action reporting SCS CSHB 1001 (Fin) from committee was rescinded. Senator Sharp MOVED to amend his motion for deletion of Sec. 3 and instead fund disaster relief at $100.0. No objection having been raised, the motion carried and Sec. 3 was funded at $100.0. Co-chairman Frank MOVED for passage of SCS CSHB 1001 (Fin). No objection having been raised, SCS CSHB 1001 (Fin) was REPORTED OUT of committee with a unanimous "do pass" recommendation. ADJOURNMENT The meeting was adjourned at approximately 12:00 noon.