HOUSE FINANCE COMMITTEE MARCH 20, 1998 8:15 A.M. TAPE HFC 98 - 71, Side 1 TAPE HFC 98 - 71, Side 2 CALL TO ORDER Co-Chair Mark Hanley called the House Finance Committee meeting to order at 8:15 p.m. PRESENT Co-Chair Hanley Representative Kelly Representative Davies Representative Martin Representative Davis Representative Moses Representative Foster Co-Chair Therriault and Representatives Mulder, Grussendorf and Kohring were absent from the meeting. ALSO PRESENT Nico Bus, Administrative Services Manager, Division of Support Services, Department of Natural Resources; Jim Derringer, Staff, Representative Kelly; Kip Knudson, Staff, Representative Hanley; SUMMARY HB 325 "An Act making appropriations for the operating and loan program expenses of state government, for certain programs, and to capitalize funds; making appropriations under art. IX, sec. 17(c), Constitution of the State of Alaska, from the constitutional budget reserve fund; and providing for an effective date." HB 325 was HELD in Committee for further consideration. HOUSE BILL NO. 325 "An Act making appropriations for the operating and loan program expenses of state government, for certain programs, and to capitalize funds; making appropriations under art. IX, sec. 17(c), Constitution of the State of Alaska, from the constitutional budget reserve fund; and providing for an effective date." RESULTS BASED GOVERNMENT Division of Geological and Geophysical Surveys Water Development Mining Development Co-Chair Hanley provided members with mission statements and performance measures for the Division of Geological and Geophysical Survey, Water Development and Mining Development (Attachments 1, 2 and 3). NICO BUS, ADMINISTRATIVE SERVICES MANAGER, DIVISION OF SUPPORT SERVICES, DEPARTMENT OF NATURAL RESOURCES observed that the Department of Natural Resources and the Subcommittee agreed on all three mission statements. Representative Davies questioned if "coal" needed to be added to the mission statement of Mining Development. He noted that the Department uses "mineral" and "coal" separately. DIVISION OF GEOLOGICAL AND GEOPHYSICAL SURVEYS (DGGS) Representative Davies observed that the Department addressed his concerns. He pointed out that part of the phrase is missing from the next to last performance measure. The performance measure should read "percentage of federal, state and local agencies using DGGS information to develop land use plans, building codes and zoning ordinances with the intent of reducing losses from future geological events." Mr. Bus did not have the performance measure "percentage change in communities with disaster plan" on his sheet. Representative Davies noted that the Director was notified and agreed with the performance measure. Co-Chair Hanley MOVED to ADOPT the mission statement and performance measures for the Division of Geological and Geophysical Surveys as contained in Attachment 1 (copy on file). There being NO OBJECTION, it was so ordered. WATER DEVELOPMENT JIM DERRINGER, STAFF, REPRESENTATIVE KELLY observed that the mission statement for Water Development was moved from the mission statement of the Division of Mining and Water Development. The mining portion was removed. There were no performance measures for damn compliance. A percentage of dam inspections in compliance was added. Representative Davies observed that the mission statement still contains a reference to "mineral" resources. Co-Chair Hanley observed that the mission statement should be amended to delete "mineral and". He added that "water" should also be deleted from the mission statement for Mining Development. Mr. Bus suggested that "mineral" should remain in the mission statement for Water Development. He observed that a lot of the water resource activities support the mineral industry. Representative Davies noted that the Subcommittee supported the deletion. Representative Davies acknowledged that a lot of water rights issues and permits are about helping mineral development, but emphasized that the Water Development component focuses on water issues. In response to a question by Representative Martin, Mr. Bus stated that the majority of the component's activity relates to surface water. Representative Davies disagreed. He pointed out that a lot of residential work is specific to wells, which are subsurface. He estimated that the majority of water issues in residential areas relate to subsurface water. Mr. Derringer observed that the only change in the mission statement or performance measures from the last draft is the addition of the percentage of dam inspections in compliance under public safety. Co-Chair Hanley observed that the Senate Finance Committee is working on different components. Representative Davies observed that the "percentage of dam inspections in compliance" should be "percentage of dams inspected and in compliance". He emphasized that dams inspected and the numbers of dams in compliance are separate issues. Co-Chair Hanley MOVED to ADOPT the amended performance measure, "percentage of dams inspected and in compliance". There being NO OBJECTION, it was so ordered. Co-Chair Hanley MOVED to ADOPT the mission statement and performance measures for Water Development as contained in Attachment 2 (copy on file). There being NO OBJECTION, it was so ordered. MINING DEVELOPMENT Mr. Bus stated that he was not clear on the performance measures, adverse audit findings compared to total audit findings and aged rentals and royalties received by commodity over time. Co-Chair Hanley discussed audit findings. He stressed that it is not a bad thing to look at the types of audits that are being done and the kinds of things that are being identified. Mr. Bus clarified that the measurement was to do the aging of rentals and royalties. The Department is required by law to do audits on the royalties. The desired outcome the Department is trying to measure is the timely and accurate deposit of revenues in the treasury. The mining industry is time sensitive. After a certain number of years the rent goes up. Mining on state lands is directed at increasing revenues. Co-Chair Hanley observed that the intent is to determine how many payments are past due. He suggested the average time a payment is late beyond 60 days. Representative Foster clarified that the first year a mining claim is staked a $20 dollar fee is paid per 40 acres. After five years the claim becomes aged and the fee is increased. The intent is that inactive claims should be returned. Mr. Bus noted that Alaska has a good mining business climate. Co-Chair Hanley suggested the deletion of the performance measures, adverse audit findings compared to total audit findings and aged rentals and royalties received by commodity over time. Representative Davies explained that the Subcommittee wanted to measure the timeliness but felt that it was a measure of the permitting operation. Mr. Bus noted that it would still be measured and reported as an internal measure. Representative Davies suggested that the performance measures be adopted as contained in Attachment 3. Mr. Derringer clarified that "water" would be deleted from the mission statement. He questioned if "coal" would be included as a separate item in the mission statement for Mining Development. He observed that "mining" would not be identified in the mission statement for Water Development. Co-Chair Hanley MOVED to ADOPT the mission statement and performance measures for Mining Development amended to delete "water" and add "coal". There being NO OBJECTION, it was so ordered. Representative Davies questioned if "coal" should be added to the mission statement for the Division of Mining and Water Development. Co-Chair Hanley observed that the Division's mission statement would be taken up at another time. In response to a question by Representative Foster, Mr. Bus observed that the Division of Land administers gravel. HB 325 was HELD in Committee for further consideration. ADJOURNMENT The meeting adjourned at 9:00 a.m. House Finance Committee 5 3/20/98 a.m.