Legislature(2009 - 2010)HOUSE FINANCE 519

04/15/2009 08:30 AM House FINANCE

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08:45:10 AM Start
08:46:18 AM SB75
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
-- Statewide Public Testimony --
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
CS FOR SENATE BILL NO. 75(FIN)                                                                                                
     "An Act making and amending appropriations, including                                                                      
     capital appropriations, supplemental appropriations,                                                                       
     and appropriations to capitalize funds; and providing                                                                      
     for an effective date."                                                                                                    
JOHN  DUFFY, BOROUGH  MANAGER, MAT-SU  BOROUGH, related  that                                                                   
the  Mat-Su borough  is  quickly  growing and  has  increased                                                                   
needs such  as improved  transportation  systems.  He  shared                                                                   
statistics about  the dangers of  local roads and  bridges in                                                                   
need of  repair.   He shared local  solutions taken  to raise                                                                   
funds to  meet those needs.   He requested matching  funds of                                                                   
$35 million  and that  the state  budget shortfall  is shared                                                                   
equally throughout the state.   He stressed the burden put on                                                                   
the Mat-Su due to recent budgetary cuts.                                                                                        
Co-Chair  Stoltze commented  that  the Committee  is  dealing                                                                   
with  the  governor's  budget  as submitted,  which  did  not                                                                   
include funding for those projects.   It puts the legislature                                                                   
in  a precarious  situation.   He spoke  of specific  vetoes:                                                                   
Goose Creek for  $17 million, the Spur Line,  port money, and                                                                   
matching road bond  money.  He maintained that  there were no                                                                   
guarantees or promises in this budget.                                                                                          
Mr. Duffy  voiced appreciation  for the work the  legislature                                                                   
8:51:28 AM                                                                                                                    
JOE  GELDHOF,  JUNEAU,  related   that  he  was  one  of  the                                                                   
principle  authors  of  the  cruise   ship  initiative.    He                                                                   
addressed Section  4 of  SB 75, which  relates to  the cruise                                                                   
ship initiative.   He felt he spoke for those  who worked on,                                                                   
and voted  for, the initiative.   The kinds of  projects that                                                                   
are currently  funded are  those that  the fund was  intended                                                                   
for.    He  thanked the  Committee  for  moving  forward  and                                                                   
spending the  money on the  projects and putting  Alaskans to                                                                   
8:53:14 AM                                                                                                                    
Representative Gara  asked what the  funds are allowed  to be                                                                   
used for.  He wondered if there  is any intent language.  Mr.                                                                   
Geldhof  related that  there is  language  in the  initiative                                                                   
that  mirrors federal  law.   There is  only one  significant                                                                   
case that  touches on  the federal limitations.   There  is a                                                                   
potential for a law suit.  There  needs to be a nexus between                                                                   
the  kinds  of  activities  funded  and  the  source  of  the                                                                   
revenue, the excise  tax.  For example, a wharf  in Ketchikan                                                                   
would  apply.  The  vast majority  of the  projects show  the                                                                   
connection between the project and the passengers.                                                                              
8:55:24 AM                                                                                                                    
Representative Gara  asked what the federal  language states.                                                                   
Mr. Geldhof could not cite the  language.  He said the excise                                                                   
tax must  be spent on  cruise-related items.   Representative                                                                   
Gara thought  there was a  lot of leeway  if it is  linked to                                                                   
passengers; less if it is linked to the cruise ship.                                                                            
Co-Chair Stoltze offered to provide the language.                                                                               
Representative Austerman  wondered if not spending  the money                                                                   
jeopardized  the  excise tax.    Mr. Geldhof  explained  that                                                                   
there were  two issues  related to  collecting money  and not                                                                   
spending it.  At  a certain point if a large  amount of money                                                                   
accumulates,  it would  be a legal  problem.   That has  been                                                                   
avoided this  session because the  money is being spent.   An                                                                   
orderly expenditure is advisable  from a legal point of view.                                                                   
8:59:28 AM                                                                                                                    
Representative  Gara did  not like  the idea  of the  federal                                                                   
government  telling  the state  how  to use  its  money.   He                                                                   
requested  federal  language   regarding  that  issue.    Mr.                                                                   
Geldhof offered to provide that language.                                                                                       
Representative Kelly  also requested a copy  of the language.                                                                   
Co-Chair  Stoltze stated  that  all members  would receive  a                                                                   
Mr. Geldhof  added that federal  law roughly parallels  state                                                                   
9:00:47 AM                                                                                                                    
CHIP  THOMA,  PRESIDENT,  RESPONSIBLE   CRUISING  IN  ALASKA,                                                                   
referred   to  page  42   of  the   bill,  the  cruise   ship                                                                   
appropriation, and  thought the descriptions of  the projects                                                                   
should  be more  specific in  order  to avoid  lawsuits.   He                                                                   
voiced appreciation for the legislature's support.                                                                              
9:03:02 AM                                                                                                                    
KATHY MORGAN,  TOK COMMUNITY  UMBRELLA CORPORATION,  TOK, via                                                                   
teleconference,  requested funding for  several CIP's:  a Tok                                                                   
biomass and processing facility  for $190,000, a new woodchip                                                                   
boiler at  the Tok DOT for  $1.5 million, wood  pellet stoves                                                                   
in public  buildings for $47,500,  and to clear  space around                                                                   
disabled, senior, and veterans homes for $150,000.                                                                              
9:04:27 AM                                                                                                                    
DAN  DUAME, EXECUTIVE  DIRECTOR,  ALEUTIAN HOUSING  AUTHORITY                                                                   
ASSOCIATION  OF  ALASKA  HOUSING   AUTHORITIES,  PALMER,  via                                                                   
teleconference,  expressed   support  for   the  Supplemental                                                                   
Housing Development  Grant Program,  which saw a  decrease in                                                                   
the Senate's version  of the bill.  He described  the program                                                                   
as rehabilitation  and development  of affordable  housing in                                                                   
rural  Alaska.    The  program  administers  $90  million  in                                                                   
federal  housing  money  directly  and  leverages  additional                                                                   
funds.   The  Grant Program  is one  of the  sources used  as                                                                   
leverage.  He related that the  allocated state grant program                                                                   
of  $8  million needs  to  be  raised  to  $10 million.    He                                                                   
requested that the $10 million  amount be restored to be used                                                                   
for  affordable housing  and jobs.    The funds  allow for  a                                                                   
federal match.                                                                                                                  
9:10:10 AM                                                                                                                    
CHARLES  PARKER,  ALASKA VILLAGE  INITIATIVES,  WASILLA,  via                                                                   
teleconference,  requested  funding  for fire  protection  in                                                                   
rural  communities.     He  requested   $1  million   for  12                                                                   
communities.   He  cited a study  on property  loss in  rural                                                                   
areas when  there is no fire  protection.  He  strongly urged                                                                   
support for the program.                                                                                                        
9:12:29 AM                                                                                                                    
GRANT BAKER, UAA ENGINEERING,  ANCHORAGE, via teleconference,                                                                   
spoke  of the  importance  of  hiring Alaskan  engineers  for                                                                   
pipeline jobs.   He urged support for an increase  in funding                                                                   
for  an   engineering  building.     He  encouraged   finding                                                                   
solutions  to   stimulate  the  economy.    He   thanked  the                                                                   
Committee for all its hard work.                                                                                                
Representative Gara appreciated  meeting with the engineering                                                                   
students recently.   He mentioned  other structural  needs in                                                                   
Alaska.   He suggested  also using  private sector  funds for                                                                   
the engineering building.                                                                                                       
9:16:18 AM                                                                                                                    
DAN   LEINBERGER,   MAYOR,   BETHEL,    via   teleconference,                                                                   
recognized the status of the economy;  however, he maintained                                                                   
that  Bethel has  a  few necessity  items.   Bethel's  public                                                                   
safety buildings  are in decrepit condition.   The police and                                                                   
fire  station  are  in  need of  repairs.    More  structural                                                                   
deficiencies  were discovered  during  a roof  repair to  the                                                                   
fire  station.   He mentioned  that  Occupational Safety  and                                                                   
Health Administration  has cited  health and safety  problems                                                                   
with the  structure.  He said  the situation should  not wait                                                                   
another  year.   He also  requested funding  for a  multi-use                                                                   
Bethel  Aquatic   Center.    He  referred  to   a  resolution                                                                   
requesting funding for those projects.                                                                                          
9:21:11 AM                                                                                                                    
RICK   KOCH,  CITY   MANAGER,   KENAI,  via   teleconference,                                                                   
testified  in support of  a capital  project in the  original                                                                   
budget, the Kenai River Bluff  Erosion Project.  He explained                                                                   
the  details  of the  erosion  and  the Corps  of  Engineers'                                                                   
study.    In  October  2007,   the  voters  approved  a  bond                                                                   
proposition to  support the project.   He mentioned  the loss                                                                   
of property and money for improvements  if the project is not                                                                   
undertaken.    He discussed  the  federal omnibus  bill  that                                                                   
removed  a Congressional  authorization that  related to  the                                                                   
Corps  of  Engineers'  ability to  undertake  Alaska  coastal                                                                   
erosion  control  projects.    A  35  percent  match  is  now                                                                   
required.   The  project  is ready  to  move  forward and  is                                                                   
Kenai's number one  priority.  He requested a  state match of                                                                   
$13 million.                                                                                                                    
9:27:54 AM                                                                                                                    
BRIAN  RODGER,  INTERIM  CHANCELLOR,  UNIVERSITY  OF  ALASKA,                                                                   
FAIRBANKS, via teleconference,  thanked the Committee for its                                                                   
work.   He reported that UAF  needs $50 million  for deferred                                                                   
maintenance.   He requested support to use  non-general funds                                                                   
to begin construction of the Energy Building.                                                                                   
Representative  Joule asked  if the Cold  Climate Housing  is                                                                   
part  of the  university.   Mr.  Rodger  replied  that it  is                                                                   
located  on  UAF  property,  but   not  associated  with  the                                                                   
CHRIS  TURLETES,  ASSOCIATE VICE  CHANCELLOR,  UNIVERSITY  OF                                                                   
ALASKA, ANCHORAGE, via teleconference,  requested funding for                                                                   
deferred maintenance.   He  described the university's  needs                                                                   
and the  amount of funds  required to  meet those needs.   He                                                                   
detailed needs  in refurbishing the science building  and the                                                                   
arts  building.   He  requested  funding for  remodeling  and                                                                   
renewing and deferred maintenance.                                                                                              
Vice-Chair Thomas assumed the gavel.                                                                                            
9:36:48 AM                                                                                                                    
JOHN  PUGH,  CHANCELLOR,  UNIVERSITY   OF  ALASKA  SOUTHEAST,                                                                   
JUNEAU,  via teleconference,  thanked the  Committee for  its                                                                   
work on the  operating budget.  He requested  funding for the                                                                   
university's top priority, major  remodeling and renewing, as                                                                   
well  as   for  deferred  maintenance.     The   thanked  the                                                                   
legislature for  its past support of remodeling  and renewing                                                                   
projects.   He requested that  the Committee add back  the $8                                                                   
million for deferred maintenance.                                                                                               
9:38:55 AM                                                                                                                    
ERIC   MORRISON,    FIRE   CHIEF,    WHITE   MOUNTAIN,    via                                                                   
teleconference,  testified  in  support  of funding  for  the                                                                   
public safety  building construction  in White Mountain.   He                                                                   
asked for a 40 percent match,  stating that 60 percent of the                                                                   
funds had been lined up from seven  other sources.  He listed                                                                   
funding sources  and emphasized the  need for state  funds in                                                                   
order to meet the federal match.                                                                                                
9:40:38 AM                                                                                                                    
DAN  HARRELSON, MAYOR,  WHITE  MOUNTAIN, via  teleconference,                                                                   
requested money for the public  safety building.  He reported                                                                   
on a fire  with loss of lives,  and the loss of  their school                                                                   
from another a fire.                                                                                                            
9:41:40 AM                                                                                                                    
LINDA  SNOW,  CITY MANAGER,  ST.  PAUL,  via  teleconference,                                                                   
requested  state  matching  funds  for the  St.  Paul  Harbor                                                                   
Project.   She described  the history of  the island  and the                                                                   
city's  quest to  establish its  economy.   She detailed  the                                                                   
phases  of  the   harbor  construction.    Included   in  the                                                                   
governor's  version of  the  bill is  funding  for the  final                                                                   
phase which would complete the harbor project.                                                                                  
9:45:01 AM                                                                                                                    
TERRI SNYDER,  MAT-SU BOROUGH,  via teleconference,  spoke in                                                                   
support  of funding  for roads.   She  talked about  unfunded                                                                   
mandates.    She emphasized  the  need  for fairness  in  the                                                                   
distribution of available funds.                                                                                                
9:47:50 AM                                                                                                                    
SEDOR KUZMIN,  DELTA JUNCTION, via teleconference,  testified                                                                   
in favor  of funding for fuel  for schools and water  for the                                                                   
9:50:10 AM                                                                                                                    
CYNTHIA HENRY, CHAIR, UNIVERSITY  OF ALASKA BOARD OF REGENTS,                                                                   
via teleconference, thanked the  Committee for its work.  She                                                                   
listed  renewal   and  renovation  as  the   Board's  highest                                                                   
priority item.  She hoped that  there would be an increase in                                                                   
the budget  for this appropriation.   She emphasized  that it                                                                   
was   an  opportunity   for   the  university   to   maximize                                                                   
construction dollars.                                                                                                           
Representative    Kelly   mentioned    that    Representative                                                                   
Fairclough worked hard on the university's budget.                                                                              
9:53:36 AM                                                                                                                    
PAUL  KENDALL,   ANCHORAGE,  via  teleconference,   requested                                                                   
funding for  an energy  forum.  He  suggested looking  at the                                                                   
Cook Inlet  as an energy source.   He reminded  the Committee                                                                   
that the  stimulus  money will  disappear in  two years.   He                                                                   
thought the  focus should  be on water  as an energy  source.                                                                   
He suggested ideas for using water  for energy.  He suggested                                                                   
sticking to core values.                                                                                                        
9:58:36 AM                                                                                                                    
BILL  CHEESEMAN,  TRANSPORTATION  SUPERVISOR,  MAT-SU  SCHOOL                                                                   
DISTRICT,  via   teleconference,  agreed  with   Mr.  Duffy's                                                                   
comments  on the  need for  road repair  in the  Valley.   He                                                                   
spoke of safety issues when transporting  students in busses.                                                                   
10:00:16 AM                                                                                                                   
MARVIN   YODER,   MANAGER,   WASILLA,   via   teleconference,                                                                   
requested  funding  for  road  bonds to  promote  health  and                                                                   
safety.  He stated that the state  should support the voters'                                                                   
PAUL  CAMPBELL,   PORT  MACKENZIE  COMMISSION,   MAT-SU,  via                                                                   
teleconference,  testified in  support of  funding bonds  for                                                                   
10:02:53 AM                                                                                                                   
BISHOP BUCKLE,  CHAIR, REAL PROPERTY ASSET  MANAGEMENT BOARD,                                                                   
MAT-SU, via  teleconference, testified in support  of funding                                                                   
for roads and the new prison.                                                                                                   
10:03:49 AM                                                                                                                   
TOM ADAMS, CIVIL  ENGINEER, LOUNDSBURY &  ASSOCIATES, MAT-SU,                                                                   
via   teleconference,   spoke  in   favor   of  funding   for                                                                   
transportation projects.   He stressed the need  to fund bond                                                                   
and design projects.   He emphasized that it was  the wish of                                                                   
the voters to  fund these bonds. He recognized  that the Mat-                                                                   
Su Borough  ratio  drops to $4  dollars per  person if  major                                                                   
transportation  projects are removed.   He urged  financing a                                                                   
portion of the road bond package.                                                                                               
10:07:54 AM                                                                                                                   
DAVE   CRUZ,   PORT   MCKENZIE    COMMISSION,   MAT-SU,   via                                                                   
teleconference,   spoke   in    support   of   infrastructure                                                                   
improvement projects.                                                                                                           
CHUCK   BRAUM,  OPERATIONS/MAINTENANCE   ROAD,  MAT-SU,   via                                                                   
teleconference, asked  that Mat-Su be  given a fair  share of                                                                   
the capital budget.                                                                                                             
10:09:15 AM                                                                                                                   
CHRIS  REMILK, MAT-SU  SCHOOL  DISTRICT, via  teleconference,                                                                   
spoke in  support of  the road bond  project and  pointed out                                                                   
the importance of students being  transported safely over the                                                                   
LYNN  WOODS,  DEPUTY  MAYOR, MAT-SU  BOROUGH,  testified  via                                                                   
teleconference  in support  of further  investment in  roads,                                                                   
ports, and  the rail  system.   She maintained that  projects                                                                   
are needed to address current  and past needs and to grow the                                                                   
Representative Foster  referred to the Senate  capital budget                                                                   
structure  and  pointed  out  that  Mat-Su  has  $50  million                                                                   
allotted to it,  more than Anchorage area-wide or  Kenai.  He                                                                   
concluded that Mat-Su has done very well.                                                                                       
Ms.  Woods   said  she  was   fortunate  to  have   excellent                                                                   
representation in the legislature.   She pointed out that she                                                                   
was  speaking strictly  about  the Mat-Su  area.   Money  for                                                                   
prisons  does not  help  with building  roads.   She  thought                                                                   
distribution should be equal throughout the state.                                                                              
10:13:58 AM                                                                                                                   
MICHAEL CAMPFIELD,  ENGINEER, MAT-SU TRANSPORTATION  ADVISORY                                                                   
BOARD, PALMER, via teleconference,  listed projects currently                                                                   
in  the design  stage and  requested  funding for  them.   He                                                                   
requested  $190  million to  maintain  those  projects.   The                                                                   
stimulus package does not cover  these projects.  He spoke of                                                                   
the  approval of  the voters.    He said  that Department  of                                                                   
Transportation  and Public  Facilities supports  many of  the                                                                   
roads included in the bond package.   He maintained that they                                                                   
would  reduce   accidents,  improve   safety,  and   increase                                                                   
emergency response time.                                                                                                        
10:18:30 AM                                                                                                                   
GREG   BELL,   PORT   MCKENZIE   COMMISSION,   WASILLA,   via                                                                   
teleconference,  requested funding for  the Port,  roads, and                                                                   
railroad expansion.                                                                                                             
Representative  Fairclough  thought that  Governor  Sheffield                                                                   
was looking for funding for the Port of Anchorage.                                                                              
10:20:13 AM                                                                                                                   
SENATOR LINDA MENARD requested  funding for the railroad spur                                                                   
and for roads in the Mat-Su Borough.   She mentioned that the                                                                   
area contains  three of the  most hazardous roads  in Alaska.                                                                   
She maintained that the economic  return from the projects is                                                                   
key to the Borough.                                                                                                             
10:22:28 AM                                                                                                                   
FORMER-GOVERNOR BILL SHEFFIELD,  DIRECTOR, PORT OF ANCHORAGE,                                                                   
via  teleconference, requested  funding to  finish the  north                                                                   
extension  of the  Port.  He  thanked the  Committee for  its                                                                   
10:23:47 AM                                                                                                                   
SB  75   was  heard  and   HELD  in  Committee   for  further                                                                   

Document Name Date/Time Subjects
02 HB207 Sponsor Statement.pdf HFIN 4/15/2009 8:30:00 AM
HB 207
HB 207 Referral Summary.doc HFIN 4/15/2009 8:30:00 AM
HB 207