HOUSE FINANCE COMMITTEE February 09, 2001 1:40 PM TAPE HFC 01 - 23, Side A TAPE HFC 01 - 23, Side B CALL TO ORDER Co-Chair Mulder called the House Finance Committee meeting to order at 1:40 PM. MEMBERS PRESENT Representative Con Bunde, Vice-Chair 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 Representative Eric Croft Representative John Davies Representative Carl Moses ALSO PRESENT Ken Taylor, Director, Division of Habitat and Restoration, Department of Fish and Game; Kelly Hepler, Director, Division of Sport Fish, Department of Fish and Game; Wayne Regelin, Director, Division of Wildlife Conservation, Department of Fish and Game; PRESENT VIA TELECONFERENCE Pat Galvin, Director, Governmental Coordination, Office of the Governor; Kelly Johnson, Legal Council, US Senate Committee on Energy and Natural Resources; Brian Malnek, Staff Director, US Senate Committee on Energy and Natural Resources GENERAL SUBJECT(S): Overview: Conservation and Reinvestment Act (CARA) Funding 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 - 23  SIDE A  000 Co-Chair Mulder Gave a brief overview of CARA and noted that the testimony would cover funding levels and program specifics.  KELLY JOHNSON, LEGAL Noted that Senator Murkowski and COUNCIL, US SENATE Representative Young introduced the COMMITTEE ON ENERGY Conservation and Reinvestment Act in AND NATURAL Congress. The Act proposed the dedication RESOURCES of revenues for outer Continental Shelf (OCS) development to a variety of conservation, recreation and wildlife programs for 15 years. The proposal would have distributed approximately $3 billion dollars to state and local communities. It included $450 million dollars for federal land acquisitions.  348 Ms. Johnson Through the appropriation process, additional programs were included in CARA. Under the lands legacy proposal $1.6 billion dollars were included; a large portion of this funding is for federal programs. It is one year funding. A new conservation-spending category was created in the Budget Enforcement Act. This funding does not come into play until FY02.  Ms. Johnson Discussed the FY01 appropriation. The funding was broken down into three departments: Commerce, Interior and Forest Service. There was approximately $150 million dollars for coastal impacted systems in the Commerce Department. The National Oceanic and Atmospheric Administration (NOAH) will administer this funding. Alaska will receive approximately $13 million dollars of the coastal impact assistance funding.  465 Ms. Johnson Funding for lands legacy programs was contained in the budgets for the Department of Interior and the US Forest Service. There was $90 million for stateside land and water conservation grants and $100 million for state wildlife grants and $30 million dollars for urban parks.  554 Ms. Johnson Alaska received approximately $800 thousand dollars for the stateside program of the land and water conservation fund. Alaska also received $1 million dollars for state historic  preservation. These funds have been distributed.  597 Ms. Johnson There was $50 million dollars for state wildlife grants, of which $2.5 million dollars would be distributed to Alaska. This has not been distributed. There was an additional $50 million dollars in the Interior Department appropriation bill to be award through competitive grants. There was also money for urban parks, North American wetlands, and endangered species that would also be award as competitive grants.  641 Ms. Johnson Coastal impact assistance funding is the largest grant to Alaska: approximately $13 million dollars, which has not been awarded. Reiterated that the authorization and appropriation is one- time. The Alaska Delegation would like to make it more permanent.  700 Co-Chair Mulder Referred to funding through the Forest service.  722 Ms. Johnson Explained that there was $16 million dollars through the forest legacy program, but that Alaska has not chosen to participate in the program. Alaska may see $800 thousand dollars from the urban and community forestry grants. Alaska received $1.4 million dollars for Tongass Mental Health lands.  773 Representative Questioned if there would be continuing Hudson funds.  816 Ms. Johnson Observed that the Senator's intent was to create a permanent appropriation, but he was not successful. The program will have to compete with other programs. Representative Young intends to reintroduce the program. Senator Murkowski is currently pursuing ANWR issues.  903 Co-Chair Mulder Referred to costal impact assistance and a summary from Bill Horn.  956 Ms. Johnson Explained that the program was drafted for the Minerals Management Services (MMS). It was turned into a NOAA program. Additional data is needed to determine the exact appropriation.  1009 Co-Chair Mulder Noted that 60 percent of the funds are to be divided equally between producing coastal states and 40 percent is to be allocated on the basis of OCS revenues, subject to a maximum of 25 percent to any single state.  1045 Ms. Johnson Explained that Alaska received its portion from the amount divided equally to the 7 production coastal states. The state of Alaska's percentage of OCS production averages out to zero.  1086 Co-Chair Mulder Observed that 35 percent of state share is to be paid directly to coastal subdivisions and $4.5 million dollars would go directly to local coastal communities. Local shares would be further broken down.  1173 Co-Chair Mulder The local share would be allocated: 25 percent based on population, 25% based on coastline miles and 50% on the relative distance from any leased tract. Funds can be used for a number of uses including: National marine sanctuaries, fisheries conservation, conservation and restoration of coastal and marine habitats, coastal water quality improvement, watershed protection, controlling coastline erosion and management of coastal growth and development.  1181 Ms. Johnson Added that funds can be used for infrastructure up to 23 percent  1195 BRIAN MALNEK, STAFF Noted that breakwaters could be built.  DIRECTOR, US SENATE COMMITTEE ON ENERGY AND NATURAL RESOURCES 1211 Ms. Johnson Emphasized that infrastructure funds could go to roads. Senator did not want restrictions on infrastructure.  1233 Mr. Malnek Observed that there is a need for fire trucks, police, first aid etc.  1246 Ms. Johnson Emphasized that the sponsor envisioned a long-term, permanent funding program. The environmental community wanted assurance that some environmental use would occur. The language was maintained but it was put into short-term program.  1311 Co-Chair Mulder Asked if a project to diminish erosion would be considered infrastructure or maintaining coastline erosion.  1340 Ms. Johnson The funding would fall under coastline erosion.  1357 Co-Chair Mulder Noted that the world would not be changed with $8 million dollars.  1376 Ms. Johnson Stressed that Senator Murkowski wants to provide additional funding. Intention was to tie funding to OSC production.  1391 Co-Chair Mulder Questioned if the intent was for the funding to go through the normal legislative authorization process.  1403 Mr. Malnek Stated that the there was a desire to get money straight into communities but acknowledged that the funding would pass through the state.  1426 Representative Could infrastructure funding be used to Hudson address substandard fuel farms in villages?  1462 Mr. Malnek Felt that it would be appropriate but noted that there were no clear guidelines.  1477 Co-Chair Mulder Questioned if projects need NOAA approval?  1487 Ms. Johnson States are required to submit a plan by July 1, 2001 indicating what kind of programs would be funded by the project.  1512 Mr. Malnek Stressed that NOAA needs to provide the seven coastal states with a letter explaining program requirements.  1531 Ms. Johnson Pointed out that NOAA has indicated that they would only provide guidelines.  1565 Co-Chair Mulder Stressed that NOAA can be more of a hindrance in the terms of getting things done.  1590 Ms. Johnson Acknowledged that running the funds through NOAA has caused concerns. The Senator's intent was to treat the funds as revenue sharing.  1613 Co-Chair Mulder Stated that there are a multitude of projects that the state could be doing with another revenue stream, but pointed out that there is extensive administrative effort involved.  1644 Representative Commended the Congressional delegation Hudson for their work on the program.  1693 PAT GALVIN, Provided details on the Coastal Impact DIRECTOR, Assistance Program. The statutory GOVERNMENTAL structure was geared to an on-going COORDINATION, OFFICE large-scale program, which ended as a OF THE GOVERNOR smaller one-year program.  1822 Mr. Galvin Noted that the state has till July 1, 2001 to demonstrate how the state and local funds would be spent. Most of the state's effort has been with NOAA regarding the scope of the plan and the amount of details needed.  1862 Co-Chair Mulder Asked why local coordination was needed.  1870 Mr. Galvin Explained that there is only one state plan that designates how all the money is to be spent. Local communities will  submit plans, but the infrastructure portion has a cap of 23 percent. Coordination is required to assure that local communities share the infrastructure allotment and that the total not exceed 23 percent.  1935 Co-Chair Mulder Expressed frustration at the level of bureaucracy.  1948 Mr. Galvin Goal to make sure that the state fulfills obligations and receives the entire funding amount. He emphasized that they are waiting for a draft from NOAA. Stressed the need for broad requirements and flexibility.  1996 Representative Observed that other states are faced with Hudson the same problems.  2012 Mr. Galvin Noted that they are working with the other 7 coastal states. Alaska has constraints that require flexibility.  2049 Co-Chair Mulder Observed that the Governor's budget contains funding for CARA in the Division of Governmental Coordination's budget.  2087 Mr. Galvin The state portion of the coastal impact assistance funds is $8.3 million dollars. This funding is contained in the Division of Governmental Coordination's budget. The CARA statute requires public participation. NOAA requires a 30-day comment period.  2117 Co-Chair Mulder Noted that the Legislature is being asked to give blanket authorization for the CARA funding.  2135 Mr. Galvin Reiterated that a state plan will have to go through the public process. There are some general ideas of where the funding could be used on a statewide level. Ocean research and monitoring are among the possible uses.  2173 Co-Chair Mulder Questioned if it would be wise to spend onetime funding on long-term research. He suggested that a few projects be picked that can be accomplished.  2206 Mr. Galvin Noted that the state does not currently have $8 million dollars of projects that are not infrastructure and would meet the NOAA requirement.  2232 Mr. Galvin Emphasized that CARA funding could be used to integrate the holes that exist with ocean monitoring and research around the state.  2257 Co-Chair Mulder Stressed that he is reluctant to give cart blanc authority.  2272 WAYNE REGELIN, Observed that there were negotiations on DIRECTOR, DIVISION the federal level that resulted in $150 OF WILDLIFE million dollars for land acquisitions. A CONSERVATION, comprehensive management plan for all the DEPARTMENT OF FISH department's programs would be required AND GAME before Alaska could compete for the land acquisition competitive grants. He noted that there is an attempt to rescind this statute requirement in Congress and that it is so burdensome that he did not know of any states competing for the grants.    TAPE HFC 01 - 23,  Side B  11 Mr. Regelin Provided a brief overview of CARA. There is $50 million dollars for wildlife management that is divided by formula to the states. This is part of the federal aid program. The funds cannot be used for other purposes and there is a match requirement. It is a one-year appropriation with a permanent authorization.  88 Mr. Regelin Noted that there is an effort to make the program permanent and to increase the funding. The intent was for a $350 million dollar appropriation. The state would have gotten $17 million dollars if the original appropriation had been adopted.  173 Mr. Regelin The state of Alaska will receive $2.4 million dollars, added to their federal aid account from the Pittman-Robertson Wildlife Restoration Act. He was optimistic that the funding would be continued. Directors have discretion to spend money on any priority that they establish.  233 Mr. Regelin However the intent is for preferred purposes of unmet funding needs for wildlife education, management of species that are not hunted and wildlife related recreation.  260 Mr. Regelin The legislation was started as funding for species that are not hunted due to endangered species problems. With help from the Senator from Louisiana this was tied into coastal impact assistance and shared revenue for offshore drilling. Revenue from offshore drilling goes directly to the federal treasury.  337 Mr. Regelin An Alaska coalition of hunters, communities, oil companies, banks, and the environmental community supported  CARA. Buying federal lands was the only controversial portion.  424 Mr. Regelin Discussed programs that could be supported by the funding. Noted that funding could be reappropriated. Would like to use some of the funds in FY02 for program planning in wildlife education, watchable wildlife programs and non-game programs. The funding would be used for projects that are high priority.  533 Mr. Regelin He emphasized that the department would know in September or October if the funding would continue.  602 Mr. Regelin Acknowledged that he is asking the Legislature to make the appropriation by the end of the session. Felt that the program would continue. He pointed out that Coastal impact funding will be lost if not spent and emphasized the need for flexibility for planning. He stressed that the department would work with the subcommittee. He reiterated that he is confident that the funds will continue at $100 to $150 million a year; Alaska would receive the maximum of 5 percent.  805 Mr. Regelin All federal aid dollars have a state match of 1 to 3. They would need $800 thousand dollars for the state match. Hunter and wildlife fees could be used, but they are reluctant to do so. Looking at ways to get a state match.  849 Representative What is the timeline?  Hudson 883 Mr. Regelin The statutes outline specific purposes. He stated that the department could have broad suggestions by the 2/22/01 subcommittee that would provide big pieces of land purchases without locking the state into a long-term direction, but that they would not have the normal detailed. Identifying programs will be the focus.  1016 KELLY HEPLER, Clarified that there are project DIRECTOR, DIVISION descriptions available. They are looking OF SPORT FISH, at concrete projects. They do not have to DEPARTMENT OF FISH go back to NOAA for approval. AND GAME  1077 KEN TAYLOR, If it remains a one-year appropriation DIRECTOR, DIVISION they would still have three years to OF HABITAT AND spend the funds. Can look at the RESTORATION, availability for additional funds for DEPARTMENT OF FISH direction. Added that the fight would AND GAME continue.  1121 Mr. Regelin Noted that the funds flow through the federal Fish and Wildlife Service. The $50 million dollars in the competitive grant program would be difficult to pursue due to the restrictions.  1216 Co-Chair Mulder Noted that he had questions regarding urban parks.  1233 Mr. Regelin Urban and state parks will go though the Department of Natural Resources. There is only $115 thousand dollars.  1254 Co-Chair Mulder Thought that the funds would be released through competitive grants for specific projects.  1336 Representative Observed that the state match would be an Hudson issue.  1380 Mr. Regelin Reiterated that the match is 3 federal dollars for each state dollar.  1386 Representative Clarified that there were direct Lancaster appropriations to the Sea Life Center. He noted frustrations with NOAA. interactions.  1468 ADJOURNMENT The meeting was adjourned at 2:55 p.m.