HOUSE FINANCE COMMITTEE January 12, 2001 1:39 PM TAPE HFC 01 - 5, Side A TAPE HFC 01 - 5, Side B TAPE HFC 01 - 6, Side A CALL TO ORDER Vice-Chair Bunde called the House Finance Committee meeting to order at 1:39 PM. MEMBERS PRESENT 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 Representative Eldon Mulder, Co-Chair Representative Bill Williams, Co-Chair ALSO PRESENT Representative Gretchen Guess; Pat Pourchot, Commissioner, Department of Natural Resources; Mark Myers, Director, Division of Oil and Gas, Department of Natural Resources; carol Carroll, Director, Division of Support Services, Department of Natural Resources; Nico Bus, Administrative Services Manager, Department of Natural Resources; Margaret Pugh, Commissioner, Department of Corrections; Dwayne Peeples, Director, Division of Administrative Services, Department of Corrections; Margaret Pugh, Commissioner, Department of Corrections. PRESENT VIA TELECONFERENCE Milton Miltse, Department of Natural Resources, Fairbanks; Robert Wells, Department of Natural Resources, Palmer. GENERAL SUBJECT(S):  REVIEW OF DEPARTMENTS ACCOMPLISHMENTS: Department of Natural Resources Department of Corrections 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 - 5  SIDE A  000 VICE-CHAIR BUNDE Explained the order of business and the departments that would be testifying at today's meeting.  DEPARTMENT OF NATURAL RESOURCES  106 PAT POURCHOT, Stated that mission of the Department was COMMISSIONER, to provide for the utilization, DEPARTMENT OF development and conservation of all the NATURAL RESOURCES natural resources in the State for the maximum benefit of present and future Alaskans.  223 Commissioner Noted the four broad goals for the Pourchot Department: * Encourage resource development that creates Alaska jobs and ensures economic growth in all regions of the State. * Doing it right. Ensure resource development planning, management and new project approvals are base on sound science, prudent management and responsive, meaningful public involvement. * Ensure resource sustainability and multiple use including recreational enjoyment of the resource base. * Streamline natural resource leasing, sales and permitting processes.  397 Commissioner Spoke to the measures of the Department. Pourchot The first is Oil and Gas. The mission of the Division is to maximize responsible oil and gas exploration and development.  460 Commissioner Listed the measures associated with that Pourchot mission.  537 Commissioner Mentioned the 8.5% growth rate in Pourchot employment gains. He noted that Alpine just went into production, and the North Star project has shifted into high gear.  614 Commissioner Commented that the Division is not Pourchot keeping up with the increased workload and that highly specialized personnel are retiring or being hired away. Additional technologies and skills are needed to  ensure sound management of oil and gas resources and for the protection of the state's financial interests.  714 Commissioner Testified about the leases, currently Pourchot being handled by the Department.  800 Commissioner The Division has held area wide lease Pourchot sales. There have been $12 million dollars of bids taken in. The North Slope area-wide sale was held in November was a significant sale. The division sold 713,000 acres, which was more than any other sale.  886 Commissioner In the last fiscal year, the Division Pourchot issued the first exploration license. Also, the Division issued its first shallow natural gas lease in November.  933 Commissioner From July 1 thorough November 15, the Pourchot Division received 696 assignments as compared to the 378 for FY00.  1002 Commissioner Commented on the State pipeline Pourchot coordinating office functions.  1045 Vice-Chair Bunde Asked what the Department would use that information for.  1057 Commissioner Mentioned the enhancement of the finding Pourchot of oil. The Division has the ability to increase the royalty rate. The Division needs to know as much information as the oil companies have. To delineate the size, the credit should be determined when reducing the royalty from 12% to 5%. The data and the person who interprets that data are a very specific function.  1199 Representative Asked where authority would rest when Hudson accessing that information.  1225 Commissioner Responded that the Division of Oil and Pourchot Gas could make that decision.  1245 MARK MYERS, The State receives the data at a nominal DIRECTOR, DIVISION cost. That info is available to a OF OIL AND GAS, limited group of people. The data is not DEPARTMENT OF distributed to the Legislature. The NATURAL RESOURCES authority to make the decision rests with the Commissioner of the Department of Natural Resources.  1342 Representative Croft Asked when the royalty rate was established.  1364 Mr. Myers Explained that the oil company will size the shoot. The companies will assess the prospects to determine the terms. Once something is discovered, the royalty rate is set. It would conform with an outline to make that determination. It is the Divisions responsibility to make sure  that the State gets its fair share.  1471 Representative Croft Questioned why that would be an issue.  1480 Commissioner Responded that to buy that information, Pourchot it is an estimated cost of $150 thousand dollars.  1502 Representative Asked the percentage of possessed 3-D Whitaker data and the Department's ability to analyze that information.  1524 Mr. Myers Explained that almost every field has that information and would cost less than 10% for the 3-D.  1557 Representative Questioned, of the data not available, Davies how much is essential.  1579 Mr. Myers Replied that the Department has had marginal success. To do a good job, multiple versions of the data need to be available and done routinely.  1625 Vice-Chair Bunde Inquired if funds were available buy the data.  1638 Mr. Myers Responded that it was both the funding costs and the technology, which is needed in order to be able to read the data. That training is only available internally through the good oil companies. It would be in the State's best interest to recruit some of those people. The Department does not have the support to read the current info.  1713 Commissioner Pointed out the State Pipeline Pourchot Coordinating Office functions. * Miles of pipelines under jurisdiction * Miles of right of way under jurisdiction  1765 Commissioner Newest measure is activity on the natural Pourchot gas pipeline. Will interface with federal counterparts. The Governor has submitted a budget item request to help the measure.  1835 Commissioner Addressed the number of water right files Pourchot applied for and processed. At this time, there is a backlog of 500 pending applications. The Division cannot keep up with the measure. The Division proposes to fix the problem by proposing regulations to streamline the water rights program. The FY02 budget proposes a $300 thousand dollar increment to increase the water rights staff so that the applications can be better processed. The Administration will propose a bill to establish a water use fee.  1960 Commissioner Division of Mining, Land & Water. The  Pourchot mission of the Division is to encourage environmentally sound use and development of Alaska's land, mineral and water resources. Additionally, they will measure the acres of land conveyed to municipalities.  2017 Commissioner Reiterated that they would measure acres Pourchot of land sold and amounts of revenue generated from land sales.  2049 Representative Asked the increase of the land sales.  Foster 2073 Commissioner Stated that through SB 283, that bill Pourchot provided the Department authority to offer land sales, which substantially increased the amount of land for sale. FY02 & FY03 will be the follow-up for that prep work.  2137 Representative Asked about the "home stead" option for Foster the public.  2149 Commissioner Responded that some of those systems were Pourchot not always successful. That system has evolved into something less than homesteading and more toward recreational cabin sites. Subdivision lots are another form of that. Many of the subdivisions are in more remote locations and away from urban areas.  2211 Representative Questioned the handout and asked the Davies sudden increase of land available.  2226 Commissioner As the number of parcels increase, so do Pourchot the number of acres that are included. To obtain a land offering does take a lot of area plans and a long time. The process involves community involvement and public comment. These components form the basis for disposal of land.  TAPE HFC 01 - 5, Department of Natural Resources (continued)  Side B  000 Vice-Chair Bunde Noted that Representative Hudson would Chair the Department of Natural Resources Subcommittee.  049 Representative Asked if there was hope that some of the Foster acreage could be selected as State lands.  077 Commissioner Noted that the Department has worked with Pourchot Bureau of Land Management (BLM) to improve the State lands. There are issues being worked out with BLM. They are requesting larger acreage for a township. The State is attempting to narrow the language. He thought it could be responsibly worked out.  201 Representative Asked the Commissioner to provide a  Hudson historical review of the land disposals.  227 Commissioner Touched on the agricultural lands sold Pourchot and placed into production. The measure includes the number of active placers, load and coalmines and the number of mining claims staked and processed. Those loans are performing well.  349 Commissioner Mining claims-permanently involved in a Pourchot number of mining prospects. Metal prices have dramatically increased in the State. The State has been struggling to deal with the claims and has developed a tremendous backlog. More funds have been made available to reduce the work. At this time, there is a much shorter wait with help from federal funding.  550 Commissioner Mining claim information will be able for Pourchot accessing on the web.  583 Representative Asked if the mining claims resulted from Whitaker increased ariel mapping.  617 Commissioner Addressed the geological and geophysical Pourchot surveys. He noted that the federal areas are becoming less attractive. Approximately 3.8 million acres of ground are now under active exploration.  757 Commissioner Spoke to the Division of Parks and Pourchot Outdoor recreation. At this point in time, the percentage of parks facilities open is 100%, which are 120 park units open. He noted the number of visits by site and type of use of state park units. The Division is struggling for ranger maintenance of the parks. He emphasized that there is only one seasonal ranger patrolling 1.5 million acres.  867 Commissioner Commented on the Division of Forestry. Pourchot The annual volume of timber offered for sale and annual volume of State timber offered for in-state companies and then converting it to value added products. He continued, commenting on the percentage of fires in full and critical protection categories that were held to less those 10 acres. In FY00, that performance was 97.4% of which the total of 288 fires, 269 were in critical areas and 262 were less than 10 acres.  976 Commissioner Addressed maintaining daily completion of Pourchot the on-line grantor/grantee and location indexing process for all documents accepted in the Recorder's office.  1055 Commissioner Mentioned the verification concerns. The  Pourchot Division is currently looking to imaging technology in the hopes of making better progress.  1142 Vice-Chair Bunde Asked if the members would like to have a copy of the information presented.  1162 Representative Referenced the bill, page 35. He asked Foster about the backlog of processing permits.  1194 Commissioner Acknowledged that there are cases that Pourchot the Division will "never" be able to address. The current system is "broken" and needs adequate funding and the backlog is very large.  1248 Representative Emphasized that the Department does not Foster have the funding to process the laws passed by the Legislature.  1283 Representative Referenced the Office of Management & Davies Budget page, performance measures. He admitted it was difficult to do the cross-reference. He suggested that it would be helpful to get the formats to mesh.  1331 Commissioner Agreed. He added that the measures do Pourchot not always jive with the fiscal year goals. He concluded the testimony.  DEPARTMENT OF CORRECTIONS  1503 MARGARET PUGH, Reviewed the department's mission. COMMISSIONER, Customers are the citizens of the State. DEPARTMENT OF Department charged to protect, through CORRECTIONS secure institutions, rehabilitation and treatment of offenders.  1570 Commissioner Pugh Detailed the facilities operated by the department: 12 correctional centers, 14 probation offices, and 15 community jails.  1610 Commissioner Pugh Discussed missions of the Office of the Commissioner: 30,686 bookings and 4,492 probation and parole - up 2.3 percent.  1683 Commissioner Pugh Highlighted two new programs: substance abuse treatment program in Wildwood and Youthful Offender Program at Spring Creek. 85 percent of all offenders that enter the system have some substance abuse problems.  1740 Commissioner Pugh Noted that the Youthful Offender Program at Spring Creek is for is a closed program for very young prisoners. It focuses on behavior and education.  1794 Commissioner Pugh Community Corrections program is working more closely with victims.  1836 Commissioner Pugh Working with management information system.  1854 Commissioner Pugh Working on new jail for Anchorage, which  is scheduled to open in 2002.  1872 Commissioner Pugh Discussed measure 2 - percentage of intakes that have been in the system is misleading because it captures people that have been booked for the same offense due to bail.  1920 Vice-Chair Bunde Questioned if the Department could develop a defendable recidivism number.  1940 Commissioner Pugh Replied that the new management system would allow the development of a recidivism definition and data.  1960 Vice-Chair Bunde Asked about the national standard.  1980 Representative Croft Measure recidivism could be a measure of performance but not necessarily of how the Department is doing.  2010 Vice-Chair Bunde Measure of Alaska's performance.  2018 Commissioner Pugh Pointed out that a data population profile is done each December.  2063 Commissioner Pugh Discussed measure 3 - number of days over emergency capacity. Since Nov. 1999 rarely over. The courts have stopped active monitoring in the Cleary case. The Department of Law has filed a motion to terminate. The court has indicated that it will be terminated.  2179 Commissioner Pugh Reviewed Parole Board annual report. 590  2220 Commissioner Pugh Discussed measure for Division of Administrative Services.  Department of Corrections (continued)  TAPE HFC 01 - 6,  Side A  015 Commissioner Pugh Reviewed the measure for the Alaska Correctional Institutions. The numbers of released inmates is so small that another measure may be needed.  107 Representative Pointed out that the intent was to Hudson provide tools for release. Vice-Chair Bunde added that it is also to keep inmates busy. Commissioner Pugh agreed that the program keeps the inmates visible and productively occupied.  215 Representative Stressed that rural inmates would have Foster difficulty finding employment if they return to rural areas.  319 Commissioner Pugh Responded to comments by Representative Croft regarding the direction of the Alaska Correctional Industry. The old focus was more on productive time in incarceration than in job training. The product fund is self-generating. Income does not go the Department's general fund.  503 Representative Croft Stressed that it is meant to sustain its  self and not lose revenue.  577 Commissioner Pugh Listed some of the goods and services operated by the Alaska Correctional Industries.  610 Vice-Chair Bunde Summarized that the mission is to keep people productive and that it is not the Department's mission alone.  646 Commissioner Pugh Agreed and added that the mission statement should be clarified.  666 Representative Croft Asked what percentage of the people involved are getting into trouble and if that could be a better measure.  733 Vice-Chair Bunde Emphasized the value of the work ethic.  780 Commissioner Pugh Continued, the manager of the institution is looking for a safe secure institution site.  814 Commissioner Pugh Reviewed the Division of Institutions. She noted that the State of Alaska is one of only 5 that operate a unified system. Jails are operated in 45 other states by counties, which makes it difficult to compare to national studies.  906 Commissioner Pugh There have been two major instances of note: · The homicide by a prisoner; and · The use of deadly force by an officer during an attempted escape.  982 Commissioner Pugh Added that there has also been a tuberculosis outbreak, which started at Spring Creek. The Division of Public Health has done an excellent job at tracking the illness. She interjected that Hepatitis C is also in the institutions.  1059 Commissioner Pugh Reviewed Inmate Programs. A number of charts were provided. [On file].  1181 Representative Croft Measure one of inmate programs - complete programs successfully. Noted that a lot of people can complete the program without invoking a change or result.  1255 Commissioner Pugh Observed that the management system is not capable of providing the number of inmates with a GED. 12 - 15 percent of the GED's in the State were presented though the Department's program.  1447 Commissioner Pugh Explained that the new system will allow better data for numbers of recidivism.  1531 Commissioner Pugh Clarified discretionary and statutory parole. It is mandatory that a person sentenced for more than two years and had served that period of their sentence. They are supervised under mandatory  release.  1612 Representative Questioned if all inmates are State Hudson residents.  1635 Commissioner Pugh Responded that not all inmates are State residents, however, most inmates are. Out-of-state residents cannot be returned to their state because they broke Alaskan law.  1714 Representative Questioned if the inmates housed out of Hudson state are tracked to assure equality.  1729 Commissioner Pugh The department manages the contract and requires that Alaskan standards be met. There is not an Alaska Correctional Industries program in Arizona. GED information includes Arizona inmates.  1876 Commissioner Pugh Reviewed strategies and priorities. The Anchorage jail is one year from opening. The focus is on developing the operational plan.  1942 Commissioner Pugh The focus is changing from reporting to the Court under the Cleary settlement to reporting to the Legislature. The Department is working on national accreditation.  2021 Commissioner Pugh There is a community jail initiative.  2038 Commissioner Pugh Continuing a focus on substance abuse, mental health, youthful offenders and education, management information system implementation.  2092 ADJOURNMENT The Committee adjourned at 4:52 p.m.