HOUSE FINANCE COMMITTEE January 11, 2001 1:38 PM TAPE HFC 01 - 3, Side A TAPE HFC 01 - 3, Side B TAPE HFC 01 - 4, Side A CALL TO ORDER Co-Chair Mulder called the House Finance Committee meeting to order at 1:38 PM. MEMBERS PRESENT Representative Eldon Mulder, Co-Chair Representative Bill Williams, Co-Chair Representative Con Bunde, Vice-Chair Representative Eric Croft Representative John Davies Representative Carl Moses Representative Richard Foster Representative John Harris Representative Bill Hudson Representative Ken Lancaster Representative Jim Whitaker MEMBERS ABSENT None ALSO PRESENT Representative Gretchen Guess; Major General Phil Oats, Commissioner, Military and Veterans Affairs; Michelle Brown, Commissioner, Department of Environmental Conservation; Deborah B. Sedwick, Commissioner, Department of Community and Economic Development; Laddie Shaw, Special Assistant, Office of Veterans Affairs, Department of Military and Veterans Affairs; Barbara Frank, Director, Division of Administrative Services, Department of Environmental Conservation. GENERAL SUBJECT(S): Review of Departments Accomplishments:  Military and Veterans Affairs Department of Community and Economic Development Department of Environmental Conservation The following overview was taken in log note format. Tapes and handouts will be on file with the House Finance Committee through the 22nd Legislative Session, contact 465- 2156. After the 22nd Legislative Session they will be available through the Legislative Library at 465-3808.   LOG SPEAKER DISCUSSION    TAPE HFC 00 - 3  SIDE A  010 Introduced staff.  MAJOR GENERAL PHIL  OATS, COMMISSIONER,  MILITARY AND  VETERANS AFFAIRS  280 Major General Phil Thanked Committee for support. Stressed Oats that there are new missions. Reviewed the department's mission.  379 Major General Phil Reviewed mission of Office of Oats Commissioner. All Divisions met performance standards.  405 Major General Phil Currently 9 % is spent on administrative Oats costs.  466 Major General Phil Average vendor payment is 19 days. There Oats were no penalties for late payments.  548 Major General Phil A training and exercise program was Oats approved as a result of the Y2k After Action Plan.  569 Major General Phil Reviewed statewide communication plan. A Oats first draft was completed during the summer of 2000 and is being refined. Several community response databases are being updated.  624 Major General Phil Average time to close out disasters has Oats been 5 years; Goal is 18 months. Disasters can remain open for many reasons. Currently, there are 18 open, oldest is 9 years. The average is 3.8 years.  680 Major General Phil Number of those assisted: 4 million Oats overall Specific disasters 92 thousand.  693 Major General Phil The number of lives saved or protected by Oats the Division was 106,000.  745 Major General Phil Field guide completed, draft community Oats relations plans completed.  843 Major General Phil Discussed deferred maintenance. The Oats backlog is $20.7 million dollars. The backlog was reduced by 6 percent in FY01.   Major General Phil No days were lost due to facility related Oats accidents  900 Major General Phil The department is required to spend 2.5 Oats percent of their federal funds on energy efficiency. There was a 10-30 percent increase in overall utility costs due to  fuel costs. There was a 12 percent reduction in kilowatt hours; increase in fuel cost is challenge.  939 Major General Phil Discussed Alaska National Guard and the Oats process of determining its mission. Unit status report is used to assess. Personnel, training and equipment are reviewed. National Guard meets its mission as determined by the Department of Defense. It is meeting recruiting goals.   1056 Major General Phil Discussed response time. Response time is Oats about 1 hour and 45 minutes. High level of professionalism due to conditions.  1146 Major General Phil National Guard directly or indirectly Oats assists all 626,932 of the state's residents; 117 lives were saved. The Readiness Training program assisted 36,000 in FY00, through its readiness training; 14,500 have been assisted in FY 01.  1176 Major General Phil The department was unable to quantify the Oats amount and value of property protected.  1257 Major General Phil Discussed youth academy. He noted that 68 Oats percent of the graduates received a GED ore reentered high school. It was identified as a star base program; will provide service to schools.  1296 Major General Phil Out of 91 graduates from the Youth Oats Academy, the average English comprehension grade level was 3.0 and the average math level was 2.2 (the national average is 1.4)  1359 Major General Phil Of 110 enrolled, 91 or 82.7 percent Oats graduated from the program. The goal is 90.9 percent.  1379 Major General Phil Discussed mission 4 for the Alaska Oats National Guard Youth Corps. Approximately 90 percent are in school or working one year after graduation.  1418 Major General Phil Discussed Veterans Affairs; 650 veterans Oats have been visited since July 2000.  Major General Phil Since July 2000, 28 communities have been Oats visited to assist rural veterans.  1454 Major General Phil Concluded that FY 02 is a year of Oats opportunities. Second highest number of veterans, but only one without a veteran's home. Centralized home does not meet the needs of Alaskan Veterans. Chance to utilize pioneer homes for veterans 125 dedicated beds and a  regional approach. Opening the door to federal assistance.  1530 Representative Questioned if federal government has Mulder committed to assistance.  1590 LADDIE SHAW, SPECIAL Federal government is working on assisted ASSISTANT, OFFICE OF living project. Could offset cost of VETERANS AFFAIRS, veterans in the home by 33 - 66 percent.  DEPARTMENT OF MILITARY AND VETERANS AFFAIRS 1658 Major General Phil Observed that veterans want to stay in Oats their homes.  1713 Representative Proud of the dedication of staff and Foster their loyalty. Thanked the Department for their search and rescue efforts and rural outreach. Department does a lot with very little. Noted the amount of federal dollars and the difficulty in reducing state dollars. Felt that they are the most efficient department. Expressed support for adding the efforts for combat readiness.  1844 Major General Phil Discussed BEARS airplanes into southeast Oats Russia. Discussed readiness efforts.  1906 Representative Asked for the number of potential Hudson applicants to look at potential clients.  1942 Co-Chair Williams Questioned how long funding would be available for assistance at pioneer homes. He thought federal funding would be restricted to five years.  1971 Major General Phil Did not know that funding would be Oats restricted. A pilot program would be for the next 4 years. He emphasized that the federal government is looking for a way to meet the need.  2000 Vice-Chair Bunde Referred to the Star Base Program.  2010 Major General Phil The program will be available to assist Oats in schools for intensive 2-week programs at no cost to the school district. It is a test program.  2039 Vice-Chair Bunde Questioned if there is a statutory requirement for an emergency radio network.  2059 Major General Phil Yes, federal law mandates emergency Oats broadcast. It is difficult in rural Alaska. Alaska was the first to test radio service though the use of commercial station tags to transmitter for push to talk broadcast capability.  2123 Vice-Chair Bunde Referred to the drug intervention program.  2131 Major General Phil Assisted in taking $30 million dollars in  Oats drugs out of the community. Provides personnel and equipment assistance to state and federal police.  2179 Co-Chair Mulder Noted that the program is 100 percent federally funded  2190 Representative Mission defense system update  Harris 2199 Major General Phil Federal Administration has indicated that Oats a National Missile Defense System. A booster for the defensive rocket will occur soon. If tests successful there will probably a decisions to go ahead to site. The Treaty could be broken once concrete is poured. Preliminary site preparation may occur.  2336 Representative John Asked how prepared the state is for Davies missile defense.  2349 Major General Phil We are not prepared for biological Oats attacks.   TAPE HFC 01 - 3,  Side B 024 Major General Phil Continued speaking about preparedness.  Oats DEPARTMENT OF COMMUNITY AND ECONOMIC  DEVELOPMENT  249 DEBORAH B. SEDWICK, Introduced her staff. There are 53 COMMISSIONER, measures for the department.  DEPARTMENT OF COMMUNITY AND ECONOMIC DEVELOPMENT 329 Commissioner Sedwick There are 7 divisions, 6 independent agencies and 16 boards and commissions.  474 Commissioner Sedwick The department is working on improved customer service through e-commerce and on-line service. Purchase and renewal of Alaska Business Licenses are on-line; 2,300 businesses used on-line systems in the first 3 months. The department is working on interactive forms for regulatory requirements.  638 Commissioner Sedwick Discussed banking securities, corporations mission, and consumer complaints. Noted that 75 percent of the applications received by the department are incomplete. Currently, applications are sent by mail. If applications were submitted on-line the system would refuse incomplete applications.  785 Commissioner Sedwick Spoke to the ASMI program. The numbers for tourism are not as good as the State would like to see.  881 Co-Chair Mulder Asked what the Department was doing to  help boost tourism.  897 Commissioner Sedwick Commented on the cut to that budget last year. Tourism planning has been drastically cut in the past couple years. The Department is precluded from marketing. Education is a large part of that marketing endeavor. There needs to be better interagency work coordination.  1002 Representative Asked about increasing the # of Alaskans Hudson employed.  1034 Commissioner Sedwick Stated that the department believed that the measure could be met. She asked what information needs to be considered. There needs to be a clear handle on some measurement tools when working on the budget.  1088 Representative Stated that he would be the Subcommittee Lancaster Chair. He asked about the tracking.  1118 Commissioner Sedwick Reiterated that the measurement is critical. She noted that she strongly believed in the program.  1145 Co-Chair Mulder Agreed that a well-established benchmark is essential to the program.  1164 Commissioner Sedwick Stated that a year round piece is essential to the program. Everything is matched out in the summer time. Winter needs to be more of a focus. The state needs better exposure.  1205 Commissioner Sedwick Spoke to the rate of expected growth. Spoke to the Division of Trade and Development. Trade Shows and promotion. Happenings in China. What is important is the quality of the trade lead.  1374 Representative Croft Asked if there were a better measure for that component.  1386 Commissioner Sedwick Stated that the Department is struggling with that piece. As top trading partners, there needs to be some type of state control. The Department contributes a great deal and is always open to recommendations. This is important part of business for Alaska as it brings a lot of money into the state. She asked for an expansion of the mission.  1475 Commissioner Sedwick Referenced the new key measurement. In 1999 the value dollar of export increased 33%.  1518 Representative Asked what made that happen.  Hudson 1528 Commissioner Sedwick Replied that we suffered through the "Asian flu". Emphasized that the state  can show the slow steady growth and create a new benchmark.  1561 Commissioner Sedwick The Department believes strongly that those destinations are our top trading partners and that will not change. Asian partners pride themselves on loyalty. She maintained that the state must remain very focused in the East.  1612 Representative Croft Commented that the trade numbers have increased with the price of oil.  1660 Co-Chair Mulder Suggested that these are big issues affecting the world.  1674 Representative Croft Spoke of the trade needs and what is appropriate for the Department.  1686 Commissioner Sedwick Increase the performance production for ASMI. ASMI sells millions of pounds of seafoods throughout the country. She recommended increasing the consumption of Alaska seafood by increasing the volume of product sold through ASMI promotions by 10% in FY01.  1780 Commissioner Sedwick Continued, the target of 45 million pounds for FY01.  1816 Commissioner Sedwick Addressed community assistance. Reviewed the number of communities successfully managing new sewer and water systems. This operates in only 43 communities. There is a lack of people to run the systems. There is not a lot of stability with management with these systems.  1875 Representative Commented that the success rate may be Davies increasing.  1917 Commissioner Sedwick Noted that the department is comfortable with working with the Committee in clarifying the terminology.  1941 Commissioner Sedwick Spoke to community assistance. Reviewed the number of CDQ-related jobs in Western Alaska.  1974 Commissioner Sedwick Addressed the major difference from last year and the new divisions. The Community and Business Development and the International Trade and Market Development were newly created. The director of that agency is working on a survey.  2066 Representative Noted that this is a difficult department Hudson to determine measures on. He recommended creating a vision in how to market Alaska. He asked if there has been an assessment done by the Governor's office for expansion.  2127 Commissioner Sedwick Replied that the Department has many  ideas. She suggested working with the private sector in addressing these ideas and gave examples.  2189 Representative Stressed the need for a vision of what is Hudson being sold. What is the major marketing opportunity and commodity that can be promoted.  2249 Representative John Questioned where ATIA resides.  Davies 2292 JEFF BUSH, DEPUTY Clarified that the function is privatized COMMISSIONER, and that the state only administers the DEPARTMENT OF contract. The contract is administered COMMUNITY AND under the Commissioner's Office.  ECONOMIC DEVELOPMENT 2354 Representative Clarified that ATIA's budget is $4.485 Hudson million dollars; the state pays 30 percent  2379 Vice-Chair Bunde 1 Questioned the cost of PCE.    TAPE HFC 01 - 4,  Side A  10 Commissioner Sedwick Did not know the exact number.  034 Commissioner Sedwick Asked members to help the department by taking Alaskan goodies to conferences and discussed the use of trade walls.  164 Representative Thanked the Commissioner for traveling to Foster rural areas.   DEPARTMENT OF ENVIRONMENTAL CONSERVATION  281 Michelle Brown, The Department of Environmental Commissioner, Conservation promotes healthy people, Department of healthy communities and a healthy Environmental environment. Everyone in DEC works in Conservation some capacity for clean air, clean water, clean land, safe food, safe handling of oil and chemicals, safe public facilities and businesses and pollution prevention.  477 Commissioner Brown Reviewed accomplishments and noted that the department strives to deliver services, build partnerships, and provide guidance that strengthens the overall economy and maintains good jobs for Alaskans by sustainable management of air, water and natural resources. The department is looking at systematically implementing a new and improved Alaska water permitting p> program  571 Commissioner Brown Although Alaska has the best laws in the country to prevent oil spills from carriers transporting oil as cargo, there have not been requirements for the railroad for large vessels carrying up to a million gallons of oil for their own use. Alaska needs to mend this hole in  its law relating to large tank vessels and the railroad that carries oil for their own use.  Vice-Chair Bunde Clarified that vessels can carry as much as 1 million gallons.  622 Commissioner Brown The department worked with the Alaska Oil and Gas Association and EPA to conduct an air permitting benchmark study to examine the permitting programs in other states to learn how to improve Alaska's air permitting services. The department reduced its permit delivery time by 42% for construction permits  694 Commissioner Brown The department gained improved environmental performance commitments in the BP and ARCO merger agreement.  745 Commissioner Brown The department was in federal court challenging the Environmental Protection Agency's decision to reject a state approved air quality permit for the Red Dog Mine outside Kotzebue.  847 Representative Croft Questioned the status of the permit. The EPA order is in effect.  859 Commissioner Brown Reviewed the finding by the EPA. The case will be heard in the Ninth Circuit next month.  892 Commissioner Brown Noted that there was concern that the minimally regulated cruise ships were dumping large amounts of sewage and emitting serious air pollution. Studies showed that 34 out of 240 opacity readings violated state standards, but these violations decreased over the summer.  964 Commissioner Brown Only one of 80 blackwater samples - toilet water - from the vessel's treatment system met water quality standards. Graywater - or water from sinks and laundry - is more like sewage than the industry anticipated, with some samples 50,000 times the standard. There was no evidence of mixing any hazardous wastes with wastewater discharges.  1018 Commissioner Brown The department is working with industry for better waste management practices, better on-board treatment technologies, and for an ongoing state oversight and monitoring program, including a scientific review of possible impacts on our waters and wildlife from the wastewater discharges.  1029 Commissioner Brown The cruise industry has indicated that Alaska is setting the world standard.  1046 Co-Chair Williams Questioned if the state found the raw sewage before or after the industry said they would test.  1083 Commissioner Brown Stated that the testing was done with the Coast Guard and industry was cooperative. Tests occurred during the summer. Treated sewage still exceed standards.  1148 Representative Croft Questioned the effective date of federal requirements in the legislation by Senator Murkowski. Commissioner Brown clarified that it would be effective in the next summer. It prohibits the discharge of raw sewage. EPA will develop standards for other discharge.  1205 Representative John Observed that neither of the discharges Davies referred to would have been under the federal mandate. Commissioner Brown clarified that the state would still have to address treatment of gray water. She emphasized that industry was not happy with the results and are looking at alternatives  1288 Representative John Questioned if technology is insufficient Davies of if ships are not being operated correctly.  1309 Commissioner Brown Stated that both are factors and gave examples.  1359 Representative Questioned if ultraviolet treatment has Lancaster been considered. Commissioner Brown did not know.  1390 Vice-Chair Bunde Questioned how fecal coliform is getting into the gray water. Commissioner Brown stated that animal matter can contain fecal coliform. The ferry system is also being addressed.  1459 Representative Croft Noted that cruise ships were violating the law.  1477 Commissioner Brown Observed that the law required treatment equipment and assumed that the devise would meet the standards. The standard is technology based.  1505 Representative Noted that there are equipment inspection Hudson requirements.  1565 Commissioner Brown Discussed healthy, safe communities. She noted that there is a food born illness in Homer.  1587 Commissioner Brown Referred to performance measures. She noted that they have been actively collecting data. She provided members with a handout on performance measures  (copy on file).  1668 Commissioner Brown Reviewed measures for the Commissioner's Office and noted that all divisions are tracking performance measures.  1689 Commissioner Brown An arbitrator overturned only one grievance in the last two years. There were no penalties on audit or payrolls.  1732 Vice-Chair Bunde Questioned why one gallon was chosen. Commissioner Brown noted that one gallon of oil in a sensitive area can cause trouble.  1777 Commissioner Brown Discussed contaminated sites. There were 756 high-risk sites.  1801 Commissioner Brown Observed that 124 underground storage tanks that received no further action required.  1849 Commissioner Brown Air and water quality permits cost an average of $9,000 dollars. Anchorage has met the health standard benchmark for air quality. Fairbanks is not meeting standards.  1876 Commissioner Brown It takes an average of 278 days to issue a permit. There is no data on the time it takes to reach resolution on complaints.  1903 Commissioner Brown All risk based inspection facilities were completed.  1910 Commissioner Brown Fast track permits will be available.  1919 Commissioner Brown Discussed measures for Environmental Health. Most of the program is funded by 60 percent general funds and 40 percent program receipts.  1949 Commissioner Brown There were fewer boil water notices.  1959 Commissioner Brown Tracking for deficiencies in sanitary surveys began in April 2000. Since then, 16 percent had significant deficiencies.  Commissioner Brown The percentage of Land fills scoring 80 or higher has increased.  2043 Commissioner Brown Food services facilities are not being inspected as much as targeted. Critical violations are going up.  2054 Representative Croft Critical violations occur when an operator is not in compliance with state food rules in a manner that can result in a food borne illness.  2079 Commissioner Brown Clarified that the trend was going down and is now going back up.  2106 Representative Croft Noted that it is hard to tell if it is a good indicator that there are more critical violations.  2123 Commissioner Brown Noted that they are inspecting less and finding more.  2132 BARBARA FRANK, Clarified that since facilities are not  DIRECTOR, DIVISION being inspected as often that when they OF ADMINISTRATIVE are inspected there are more serious SERVICES, DEPARTMENT violations. More frequent inspections OF ENVIRONMENTAL allow problems to be addressed before CONSERVATION they become a critical violation.  2187 Commissioner Brown Discussed Facility Construction and Operation measures. No data on the cost per household served. 69 percent of rural households will have safe water and sanitation by the end of calendar year 2000.  2236 Commissioner Brown Statewide public Service no data of cost on individual facilities. Material exchange has saved $1.5 million dollars.  2267 Commissioner Brown Suggested the deletion of measure 2. There is a 70 percent compliance rate. The department offers training programs to help communities do environmental planning. She noted that 80 percent of the communities served continue on to complete programs. The department has a 99 percent customer satisfaction.  2318 Commissioner Brown Noted that the issue is: How do you value prevention? Observed it is a challenge to quantify.  2340 ADJOURNMENT The meeting was adjourned at 4:00 p.m.