Legislature(2015 - 2016)HOUSE FINANCE 519

02/06/2015 01:30 PM House FINANCE

Note: the audio and video recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.

Download Mp3. <- Right click and save file as

Audio Topic
01:32:47 PM Start
01:34:05 PM Fy 16 Budget Overview: Department of Natural Resources
02:35:55 PM Fy 16 Budget Overview: Department of Military and Veterans Affairs
03:29:31 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
Heard & Held
- FY16 Dept. of Natural Resources
- FY16 Dept. of Military & Veterans' Affairs
HOUSE BILL NO. 72                                                                                                             
     "An  Act making  appropriations for  the operating  and                                                                    
     loan  program  expenses  of state  government  and  for                                                                    
     certain    programs,    capitalizing   funds,    making                                                                    
     reappropriations, and making  appropriations under art.                                                                    
     IX, sec.  17(c), Constitution of  the State  of Alaska,                                                                    
     from  the  constitutional   budget  reserve  fund;  and                                                                    
     providing for an effective date":                                                                                          
HOUSE BILL NO. 73                                                                                                             
     "An  Act making  appropriations for  the operating  and                                                                    
     capital    expenses   of    the   state's    integrated                                                                    
     comprehensive mental health  program; and providing for                                                                    
     an effective date":                                                                                                        
Co-Chair Neuman reviewed the agenda for the day.                                                                                
^FY 16 BUDGET OVERVIEW: DEPARTMENT OF NATURAL RESOURCES                                                                       
1:34:05 PM                                                                                                                    
MARK  MYERS, COMMISSIONER,  DEPARTMENT OF  NATURAL RESOURCES                                                                    
introduced   his  staff   and   introduced  the   PowerPoint                                                                    
presentation  "FY16 Budget  Overview: Department  of Natural                                                                    
Resources": He explained that he  would be reviewing some of                                                                    
the  department's  missions, his  staff  would  go over  key                                                                    
performance measures,  and he would  examine the  details of                                                                    
the budget.                                                                                                                     
1:34:41 PM                                                                                                                    
Commissioner  Myers  began  with  slide  3:  "Organizational                                                                    
Chart":  He  pointed  out that  the  Department  of  Natural                                                                    
Resources (DNR)  had approximately 1,100 employees,  made up                                                                    
2  percent of  the  state's general  fund  (GF) budget,  and                                                                    
managed about  160 million acres  of surface  and subsurface                                                                    
lands. The  department had  two deputy  commissioners: Marty                                                                    
Rutherford  handled all  things  related  to energy  (except                                                                    
energy  permitting)   and  Ed   Fogels  handled   the  other                                                                    
divisions  including   the  Division  of   Agriculture,  the                                                                    
Division of Mining,  Land, and Water, the  Division of State                                                                    
Parks and Outdoor Recreation, the  Division of Forestry, and                                                                    
the Division of Support Services.                                                                                               
1:35:26 PM                                                                                                                    
Commissioner Myers discussed slide 4 "Core Services":                                                                           
   · Foster responsible commercial development and use of                                                                       
     state land and natural resources, consistent with the                                                                      
     public interest, for longterm wealth and employment.                                                                       
   · Mitigate threat to the public from natural hazards by                                                                      
     providing comprehensive fire protection services on                                                                        
     state, private and municipal lands, and through                                                                            
     identifying significant geologic hazards.                                                                                  
   · Provide access to state lands for public and private                                                                       
     use, settlement, and recreation.                                                                                           
   · Ensure sufficient data acquisition and assessment of                                                                       
     land and resources to foster responsible resource and                                                                      
     community development and public safety.                                                                                   
Commissioner Myers stated that DNR  was viewed as the engine                                                                    
room of  the state. The  majority of development  of natural                                                                    
resources  occurred  and  most  of  the  state  revenue  was                                                                    
generated within DNR.  He furthered that for  every $1 added                                                                    
in GF,  DNR had a  return of $36  to the state  treasury. He                                                                    
believed that the department was  very efficient relative to                                                                    
its  small  size.  He  equated  DNR  to  the  United  States                                                                    
Department  of  Interior  at  the  federal  level  with  the                                                                    
exception of the Alaska Department  of Fish and Game and the                                                                    
state's Division of Forestry.                                                                                                   
Commissioner  Myers  explained  that the  department's  core                                                                    
services included  fostering commercial development  and use                                                                    
of  state  lands  and   natural  resources,  and  mitigating                                                                    
natural hazards  such as  forest fires.  Fire-fighting funds                                                                    
made  up  a large  portion  of  DNR's operating  budget.  He                                                                    
reported  that  through  the   Division  of  Geological  and                                                                    
Geophysical   Surveys  the   state  conducted   volcano  and                                                                    
earthquake  monitoring, and  issued earthquake  warnings. He                                                                    
also   acknowledged   that    DNR   worked   diligently   at                                                                    
understanding  flood   risk,  landside  risk,   and  coastal                                                                    
erosion.  He alluded  to  the inherent  risks  of living  in                                                                    
Alaska due  to natural  hazard occurrences. He  informed the                                                                    
committee  about the  state's  role in  providing lands  for                                                                    
Alaskans to  use. He gave  examples of  recreational cabins,                                                                    
new   subdivisions,   and    lands   used   for   commercial                                                                    
development. He  pointed out that  DNR was also  the leading                                                                    
agency in determining land  selection. Department of Natural                                                                    
Resources  was instrumental  in  selecting  land in  Prudhoe                                                                    
Bay.  He conveyed  that about  500 million  additional acres                                                                    
needed to  be selected in  the final selection  process. The                                                                    
state's  selection provided  economic development  in mines,                                                                    
timber,  oil  and  gas,  sand  and  gravel,  and  access  to                                                                    
infrastructure.  He emphasized  that  the  department was  a                                                                    
data-driven  science organization  and  that it  coordinated                                                                    
state  mapping, satellite  imagery, and  elevation modeling.                                                                    
He opined  that Alaska's  data was  very important  but that                                                                    
the state was under-mapped.                                                                                                     
1:39:14 PM                                                                                                                    
Commissioner Myers advanced to slide 5: "Land Ownership":                                                                       
     Land Ownership:                                                                                                            
        · Federal Land: More than 200 million acres                                                                             
        · State Land: Approx. 100 million acres of uplands,                                                                     
          60 million acres of tidelands, shore lands, and                                                                       
          submerged lands, and 40,000 miles of coastline                                                                        
        · Native Corporation Land: 44 million acres                                                                             
        · Manages one of the largest portfolios of oil,                                                                         
          gas, minerals, renewable resources, water, and                                                                        
          land in the world                                                                                                     
        · Manages all oil and gas fields on state land,                                                                         
          including two of the largest oil and gas fields                                                                       
          in North America                                                                                                      
        · Oversees all activities that occur on state land                                                                      
Commissioner  Myers commented  that Alaska's  land ownership                                                                    
was widely  distributed across the state.  He also mentioned                                                                    
that Alaska had  more coastline than any other  state in the                                                                    
nation. In fact, he reported  that Alaska had more coastline                                                                    
than all of the remaining states combined.                                                                                      
1:39:35 PM                                                                                                                    
Commissioner Myers turned to slide  6: "State Land Position/                                                                    
DNR  Office   Locations."  He   told  of   DNR's  management                                                                    
responsibilities  and  about  the locations  from  which  it                                                                    
managed. He  alluded to the  magnitude of the area  in which                                                                    
Alaska managed.  He affirmed the use  of advanced technology                                                                    
to manage remotely  and opined that managing  land in Alaska                                                                    
without the proper infrastructure was expensive.                                                                                
1:40:20 PM                                                                                                                    
Commissioner Myers reviewed slide 7: "Division Overviews":                                                                      
     Division of Agriculture (DOA)                                                                                              
        · Franci Havemeister, Director                                                                                          
        · 40 full and parttime budgeted positions                                                                               
       · 4.2% of DNR's FY16 Operating Budget Request                                                                            
        · $7,350.6 total budget request ($3,149.0 UGF)                                                                          
        · Promotes and encourages development of an                                                                             
          agriculture industry in Alaska                                                                                        
     Division of Forestry (DOF)                                                                                                 
        · Chris Maisch, Director                                                                                                
        · 254 full and parttime budgeted positions (does                                                                        
          not include the hundreds of fire season crews)                                                                        
        · 25.9% of DNR's FY16 Operating Budget Request                                                                          
        · $45,355.6 total budget request ($26,251.0 UGF)                                                                        
        · 85.6% of Forestry's budget is Fire Suppression                                                                        
        · Serves Alaskans through forest management and                                                                         
          wildland fire protection                                                                                              
Commissioner Myers  explained the  function of  the Division                                                                    
of  Agriculture. The  division handled  the quarantining  of                                                                    
invasive  species.   It  also  provided  oversight   of  the                                                                    
agricultural loan  program and  managed Alaska's  seed bank.                                                                    
He reported  that additionally the division  was responsible                                                                    
for   issuing  key   certifications  for   Alaskan  products                                                                    
necessary  for commercial  export or  commercial consumption                                                                    
of the state's food resources.                                                                                                  
Commissioner  Myers  moved on  to  discuss  the Division  of                                                                    
Forestry. He  noted that  the division's  key responsibility                                                                    
was to protect the state's  forests and to perform proactive                                                                    
management of fire. He also  mentioned that Alaska's forests                                                                    
were a resource for biofuels and commercial timber.                                                                             
1:41:20 PM                                                                                                                    
Commissioner  Myers   continued  with  slide   8:  "Division                                                                    
    Division of Geological & Geophysical Surveys (DGGS)                                                                         
        · Steve Masterman, Director                                                                                             
        · 52 full and parttime budgeted positions                                                                               
       · 4.9% of DNR's FY16 Operating Budget Request                                                                            
        · $8,622.2 total budget request ($4,631.7 UGF)                                                                          
        · Determines the potential of Alaskan land for                                                                          
          production   of  metals,   minerals,  fuels,   and                                                                    
          geothermal resources,  the locations  and supplies                                                                    
          of groundwater and  construction material, and the                                                                    
          potential  geologic hazards  to buildings,  roads,                                                                    
          bridges, and other installations                                                                                      
     Division of Mining, Land &Water (DMLW)                                                                                     
        · Brent Goodrum, Director                                                                                               
        · 210 full and parttime budgeted positions                                                                              
        · 15.2% of DNR's FY16 Operating Budget Request                                                                          
        · $26,596.0 total budget request ($11,795.6 UGF)                                                                        
        · Provides for the appropriate use and management                                                                       
          of Alaska's state owned land and water, aiming                                                                        
          toward maximum use consistent with the public                                                                         
Commissioner Myers  stated that  the Division  of Geological                                                                    
and  Geophysical Surveys  was  the  state's largest  science                                                                    
arm. He  mentioned that the  division did  geologic mapping,                                                                    
resource  identification, and  information publication.  The                                                                    
division  also  did  assessments  of  geologic  hazards  and                                                                    
risks,  mapped  information,  and  provided  and  worked  on                                                                    
construction materials.  The division was a  key provider of                                                                    
data used by information  services by the state's industrial                                                                    
base, particularly  by oil and  gas mining  and construction                                                                    
Commissioner  Myers  referred  to the  Division  of  Mining,                                                                    
Land,  and Water  as the  state's work  horse. The  division                                                                    
handled land  sales and  did many  things at  the individual                                                                    
level as well  as at the mega-project level  with respect to                                                                    
mining or oil and gas development.                                                                                              
1:42:42 PM                                                                                                                    
Commissioner Myers turned to slide 9: "Division Overviews":                                                                     
     Division of Oil & Gas (DOG)                                                                                                
        · Paul Decker, Acting Director                                                                                          
        · 125 full and parttime budgeted positions                                                                              
        · 13.2% of DNR's FY16 Operating Budget Request                                                                          
        · $23,095.2 total budget request ($9,771.5 UGF)                                                                         
        · Responsible for the leasing of state lands for                                                                        
          oil, gas, and geothermal exploration, and issuing                                                                     
          and monitoring pipeline rightofway leases.                                                                            
     Division of Parks & Outdoor Recreation (DPOR)                                                                              
        · Ben Ellis, Director                                                                                                   
        · 187 full and parttime budgeted positions                                                                              
       · 9.9% of DNR's FY16 Operating Budget Request                                                                            
        · $17,326.1 total budget request ($3,952.3 UGF)                                                                         
        · Provides outdoor recreation opportunities and                                                                         
          conserves and interprets natural, cultural, and                                                                       
          historic resources for the use, enjoyment, and                                                                        
          welfare of the people                                                                                                 
Commissioner Myers  discussed the duties of  the Division of                                                                    
Oil and  Gas. He  explained that  the division  did pre-sale                                                                    
evaluations of state land, managed  the sub surface, managed                                                                    
royalty   components,   and   provided   down-hole   surface                                                                    
information  to protect  correlative rights  of all  parties                                                                    
involved with  oil and gas development.  The state's royalty                                                                    
share from oil  and gas was the major source  of revenue for                                                                    
the state. He  relayed that taxes were  a derivative product                                                                    
of the work done through the division.                                                                                          
Commissioner  Myers  continued   with  his  presentation  by                                                                    
citing  the  role  of  the Division  of  Parks  and  Outdoor                                                                    
Recreation.  He elaborated  that  the  division managed  the                                                                    
largest  state park  system  in the  United  States, ran  it                                                                    
inexpensively, and  had seven to eight  volunteers for every                                                                    
employee.  He furthered  that the  division had  become much                                                                    
more  autonomous  increasing  its self-sufficiency  from  35                                                                    
percent in  the previous year  to 44 percent in  the current                                                                    
year. The division  anticipated a 50 percent  level of self-                                                                    
sufficiency   in   the   following   year.   He   attributed                                                                    
improvement   to   creative   marketing,   volunteers,   and                                                                    
increased fees.                                                                                                                 
1:43:54 PM                                                                                                                    
Commissioner Myers reviewed slide 10: "Division Overviews":                                                                     
     Division of Support Services (SSD)                                                                                         
        · Jean Davis, Director                                                                                                  
        · 131 full and parttime budgeted positions                                                                              
       · 7.8% of DNR's FY16 Operating Budget Request                                                                            
        · $13,709.1 budget request ($5,867.8 UGF)                                                                               
        · Provides clientfocused, efficient and cost                                                                            
          effective financial, budget, procurement, human                                                                       
          resource, information technology and recording                                                                        
          services to DNR and the public                                                                                        
Commissioner Myers  explained that  the Division  of Support                                                                    
Services  was   the  state's  backstop   for  administrative                                                                    
support  and was  the  state's  information technology  (IT)                                                                    
backbone. The  Recorder's Office  with locations  across the                                                                    
state was also part of the division.                                                                                            
Commissioner   Myers  continued   with  slide   11:  "Office                                                                    
     Office of the Commissioner                                                                                                 
        · Mark Myers, Commissioner                                                                                              
        · 9 fulltime budgeted positions                                                                                         
       · 1.0% of DNR's FY16 Operating Budget Request                                                                            
        · $1,828.2 total budget request ($1,654.8 UGF)                                                                          
     North Slope Gas Commercialization (NSGC)                                                                                   
        · Marty Rutherford, Deputy Commissioner                                                                                 
        · 8 fulltime budgeted positions                                                                                         
       · 7.6% of DNR's FY16 Operating Budget Request                                                                            
        · $13,225.2 total budget request (UGF)                                                                                  
Commissioner  Myers  affirmed  that   the  North  Slope  Gas                                                                    
Commercialization  (NSGC) office,  housed within  the Office                                                                    
of the Commissioner, stood out  as one of the most important                                                                    
offices in the department.  The office lead the coordination                                                                    
with  the  Department of  Revenue,  Department  of Law,  and                                                                    
Alaska  Gasline Development  Corporation (AGDC)  on the  big                                                                    
gas line.                                                                                                                       
1:44:42 PM                                                                                                                    
Commissioner Myers explained slide 12: "Office Overviews":                                                                      
     Office of Project Management & Permitting (OPMP)                                                                           
        · Sara Longan, Director                                                                                                 
        · 19 fulltime budgeted positions                                                                                        
       · 4.6% of DNR's FY16 Operating Budget Request                                                                            
        · $8,134.6 total budget request ($738.8 UGF,                                                                            
          $5,648.3 Industry Receipts)                                                                                           
        · Coordinates the review of larger scale projects                                                                       
          in the state                                                                                                          
     Alaska Mental Health Trust Land Office (MHTLO)                                                                             
        · Marcie Menefee, Executive Director                                                                                    
        · 18 full and parttime budgeted positions                                                                               
       · 2.5% of DNR's FY16 Operating Budget Request                                                                            
        · $4,321.9 total budget request (MHTAAR Receipts)                                                                       
        · Protecting and enhancing the value of Alaska                                                                          
          Mental Health Trust Lands while maximizing                                                                            
          revenues from those lands over time                                                                                   
Commissioner   Myers  reported   that  the   state  strongly                                                                    
identified a  challenge with permitting large  projects. The                                                                    
complexity,  the  number   of  organizations  involved,  the                                                                    
different  points   of  view,  and  other   various  factors                                                                    
influenced  the permitting  process. The  Office of  Project                                                                    
Management  and Permitting  was created  to provide  a solid                                                                    
public  process  and  a   transparency  of  information.  He                                                                    
conveyed the office's success  in expediency and efficiency.                                                                    
He also relayed  that primary funding for  OPMP consisted of                                                                    
program receipts.                                                                                                               
Commissioner Myers  conveyed that the MHTLO  reported to its                                                                    
own  board  of  directors.  He  explained  that  the  office                                                                    
provided the  land services that  brought in revenue  to run                                                                    
mental health programs in the state.                                                                                            
1:45:37 PM                                                                                                                    
ED  FOGELS,  DEPUTY   COMMISSIONER,  DEPARTMENT  OF  NATURAL                                                                    
RESOURCES specified that he was  asked to highlight four DNR                                                                    
performance measures.  He discussed  the chart in  slide 13:                                                                    
"Key Performance  Measures: Dollar  Value (in  thousands) of                                                                    
Agreements under MOU and RSA  for Large Development Projects                                                                    
Permitting  Coordination":  He   pointed  out  the  dramatic                                                                    
increase  of  large scale  projects  over  the past  several                                                                    
years.  He  elaborated  that  the  state  had  resources  of                                                                    
interest resulting in significant permitting activity.                                                                          
Representative  Kawasaki  asked  about the  larger  projects                                                                    
that  OPMP was  currently handling.  He also  inquired about                                                                    
the permitting protocol prior to the creation of OPMP.                                                                          
Mr. Fogels relayed that the  coordination process started in                                                                    
the early  1990's with the  Fort Knox Mine.  The coordinator                                                                    
for the project  was located within the  Division of Mining,                                                                    
Land,  and  Water. He  furthered  that  OPMP, created  under                                                                    
Governor  Frank Murkowski's  administration, contained  both                                                                    
the Coastal  Zone Management Program  and the  large project                                                                    
coordination  function. He  indicated  that  there were  two                                                                    
large  mining  projects; the  Donlin  Gold  Project and  the                                                                    
Chuitna Coal  Project. On the  oil and gas side  he reported                                                                    
that OPMP  had recently  completed permitting for  the Point                                                                    
Thomson Project  and was currently coordinating  the Greater                                                                    
Moose's Tooth  Project. He  also pointed  out that  OPMP was                                                                    
involved in  state permitting for Shell  Oil Company's Outer                                                                    
Continental Shelf activities.                                                                                                   
1:47:56 PM                                                                                                                    
Mr.  Fogels  moved  on to  discuss  the  second  performance                                                                    
measure  as shown  in slide  14: "Key  Performance Measures:                                                                    
Mining, Land,  and Water Permit Backlog."  He explained that                                                                    
DNR  was  making  considerable   progress  in  reducing  the                                                                    
permitting  backlog in  the Division  of  Mining, Land,  and                                                                    
Water.  He  pointed  to  the progress  shown  on  the  chart                                                                    
reporting  a  56 percent  reduction  in  permit backlog.  He                                                                    
expressed  kudos to  Brent  Goodrum,  Director, Division  of                                                                    
Mining, Land and Water, Department  of Natural Resources for                                                                    
his  efforts and  organizational and  operational efficiency                                                                    
skills.  He also  mentioned the  budgetary support  from the                                                                    
legislature to backfill some positions.                                                                                         
Mr.  Fogels advanced  to the  bar  graph on  slide 15:  "Key                                                                    
Performance  Measures: Square  Miles of  Published Minerals-                                                                    
Related  Airborne-Geophysical Data."  He explained  that the                                                                    
graph  depicted  the  number of  square  miles  of  airborne                                                                    
geophysical  data   that  the   Division  of   Geologic  and                                                                    
Geophysical  Surveys had  published.  He  reported that  the                                                                    
division  received   capital  monies  to  do   further  data                                                                    
gathering.  He emphasized  the  amount  of state-owned  land                                                                    
that currently  lacked data surveys.  He contended  that the                                                                    
state remained  eligible to receive additional  land through                                                                    
statehood  land  entitlement.  The state  needed  additional                                                                    
data in order to select the entitlement land wisely.                                                                            
1:49:10 PM                                                                                                                    
Representative   Guttenberg    asked   about    a   possible                                                                    
correlation  between  what DNR  has  mapped,  what has  been                                                                    
staked, and what has been  developed or produced. Mr. Fogels                                                                    
responded  affirmatively.  He   referred  to  the  Livengood                                                                    
prospect north  of Fairbanks.  The prospect  was discovered,                                                                    
in  large part,  due  to the  assistance  of DNR's  airborne                                                                    
geophysical program.  He conveyed that when  the information                                                                    
was reported  to the public  a tremendous amount  of staking                                                                    
activity in the  area resulted. He relayed  that DNR focused                                                                    
on areas that had high  prospect potential. He believed that                                                                    
many  of the  large mining  projects currently  producing in                                                                    
the  state  proceeded  DNR's  airborne  geophysical  program                                                                    
Representative  Munoz  remarked  that specific  efforts  had                                                                    
been  made by  the state  to reduce  the permitting  backlog                                                                    
within DNR. She wondered about  the current wait time for an                                                                    
average  permit within  the Division  of  Mining, Land,  and                                                                    
Water. She also  asked if Mr. Fogels felt  that the proposed                                                                    
budget changes  would affect  DNR's permitting  backlog. Mr.                                                                    
Fogels was  uncertain about specifying an  average wait time                                                                    
due to variations in permit  applications. He suggested that                                                                    
a temporary water use permit  might be issued within a month                                                                    
versus a lease for a  commercial operation that could take 6                                                                    
months to a year or more  depending on the complexity of the                                                                    
application. He  asserted that wait times  had been reduced.                                                                    
He also reported that DNR  was receiving a greater number of                                                                    
incoming applications.  The Department of  Natural Resources                                                                    
had  input   on  the   potential  funding   reductions.  The                                                                    
department's first priority was  to keep necessary functions                                                                    
in place that produced an  economy for the state. The second                                                                    
priority was public safety. He  remarked that the department                                                                    
made  efforts to  ensure that  the permitting  core remained                                                                    
1:52:22 PM                                                                                                                    
Vice-Chair  Saddler asked  if efforts  made in  the airborne                                                                    
geophysical  and  permitting  areas  within  the  department                                                                    
supported future  development. Mr.  Fogels responded  in the                                                                    
Vice-Chair Saddler  asked about  a reduction  of any  of the                                                                    
expenditures and the potential  for the value of investments                                                                    
to diminish in  the future. Mr. Fogels  responded, "In part,                                                                    
yes, and  in part,  no": He  elaborated that  the department                                                                    
had built  up a  staff of  experts key  to keep  work moving                                                                    
within the  department. He relayed  that the  department was                                                                    
in  the  process  of  developing  an  electronic  permitting                                                                    
system.  Currently,  land  use   permits  and  water  rights                                                                    
permits  were processed  via  automation.  He expressed  his                                                                    
appreciation for  capital appropriation monies  that allowed                                                                    
for  new  automation.  He  assured  the  committee  that  if                                                                    
funding was limited,  a system remained in  place for permit                                                                    
application processing.                                                                                                         
Vice-Chair Saddler  clarified that  anyone could  access the                                                                    
airborne geophysical  information well into the  future. Mr.                                                                    
Fogels responded in the affirmative.                                                                                            
Representative Gara  asked about funding for  the permitting                                                                    
process for  mines and  other projects.  He wondered  if the                                                                    
funding  was  comprised  mainly  of  program  receipts.  Mr.                                                                    
Fogels  responded that  major projects  were funded  through                                                                    
program  receipts.  However,  the  permitting  cost  of  the                                                                    
smaller projects were typically absorbed by DNR's budget.                                                                       
1:54:28 PM                                                                                                                    
Representative Kawasaki  asked about the  significant number                                                                    
drop in  FY 12  depicted in  slide 15.  He suggested  that a                                                                    
better  metric  would  be  to   include  the  percentage  of                                                                    
backlogged permits. He preferred to  see the total number of                                                                    
permits versus the permits waiting  to be evaluated. He also                                                                    
suggested including  a time measure  to know  the processing                                                                    
time  for   each  permit.  He  relayed   his  difficulty  in                                                                    
determining  whether the  state  was more  efficient in  its                                                                    
processing efforts or if there  were less permits to process                                                                    
based on the data provided in the chart.                                                                                        
Mr. Fogels appreciated  Representative Kawasaki's points and                                                                    
confirmed that the department had  the metrics he suggested.                                                                    
He stated that Director Goodrum  could present case types in                                                                    
detail and  provide other information.  He relayed  that the                                                                    
backlog  was comprised  of over  thirty  different types  of                                                                    
applications.  He was  happy to  supply  the committee  with                                                                    
additional information.                                                                                                         
Co-Chair  Neuman summarized  that there  had had  been a  60                                                                    
percent  reduction  in  the   number  of  backlogged  permit                                                                    
applications since FY 11. He stated  that in FY 11 the state                                                                    
had 2,659 permit  applications to process and by  FY 14 only                                                                    
1,168 permits needed processing.                                                                                                
Mr. Fogels moved on to  slide 16: "Key Performance Measures:                                                                    
Park  Fee   Revenues  (in   thousands)."  He   informed  the                                                                    
committee   that  state   park  fees   had  gradually   been                                                                    
increasing. Previously,  the fees  covered about  34 percent                                                                    
of  the  park's  operating  budget.  The  division  recently                                                                    
instated  fee   increase  bringing  the  percentage   to  44                                                                    
percent. He interjected that an  additional fee increase was                                                                    
planned within the  following two years which  would make up                                                                    
about 50  percent of the  operating budget for  state parks.                                                                    
He mentioned that there were  other innovative projects that                                                                    
would  help to  reduce the  reliance on  the state's  GF for                                                                    
park   operations.  He   concluded   his   portion  of   the                                                                    
1:57:07 PM                                                                                                                    
JEANMARIE  DAVIS, DIRECTOR,  DIVISION  OF SUPPORT  SERVICES,                                                                    
DEPARTMENT  OF NATURAL  RESOURCES stated  that she  would be                                                                    
walking  the  committee  through  a series  of  slides  that                                                                    
outline the  governor's amended FY 16  budget. She commented                                                                    
that   the   first    subcommittee   meeting,   chaired   by                                                                    
Representative Pruitt,  was held  the previous  evening with                                                                    
the department.  She anticipated a detailed  review of DNR's                                                                    
1:57:46 PM                                                                                                                    
Ms. Davis turned  to slide 18: "DNR  FY2016 Governor Amended                                                                    
Budget - Employees":                                                                                                            
     DNR will  employ about 1,060  Alaskans in fulltime  and                                                                    
     seasonal positions, in 29  locations, with main offices                                                                    
     in  Anchorage,   Juneau,  Fairbanks  and   Palmer,  and                                                                    
     regional offices throughout the state.                                                                                     
Ms.  Davis  explained  that  the small  chart  on  slide  18                                                                    
depicted the  position counts for  DNR since FY 12,  a five-                                                                    
year period. She  observed that the number  of employees was                                                                    
relatively  stable with  only slight  changes from  year-to-                                                                    
year. However,  the FY  16 proposed  budget reflected  a net                                                                    
reduction of  47 positions; a  decrease of 48  positions and                                                                    
an increase of 1 new position.  She furthered that of the 48                                                                    
positions to be  dropped only 34 were  currently filled. She                                                                    
relayed that  DNR would be  working with its  employees, the                                                                    
divisions, the Division of  Personnel, and labor negotiators                                                                    
on any  kind of  layoff process after  the final  budget was                                                                    
approved. She  reiterated that the department  anticipated a                                                                    
number of layoffs based on the most current information.                                                                        
Representative  Wilson asked  if  information was  available                                                                    
concerning  specific division  layoffs. Ms.  Davis responded                                                                    
in the affirmative. She pointed  to the information provided                                                                    
in  the governor's  budget that  was  released the  previous                                                                    
day. She indicated that the  information was provided to the                                                                    
finance  subcommittee  and could  be  provided  to the  full                                                                    
finance committee. Representative  Wilson confirmed that she                                                                    
wanted the information.                                                                                                         
1:59:38 PM                                                                                                                    
Ms.  Davis advanced  to slide  19:  "Budget Growth  Analysis                                                                    
(Prepared by  Legislative Finance)  - Department  of Natural                                                                    
Resources'  Share of  Total Agency  Operations (GF  Only, in                                                                    
     DNR's  GF  budget  grew by  $27,735.8  million  between                                                                    
     FY2007  and  FY2016  Governor's Request  -  an  average                                                                    
     annual growth rate of 3.2%.                                                                                                
     The  department's  total  FY16  Governor's  Request  GF                                                                    
     budget equals  $337,456 per resident  worker (according                                                                    
     to  the   Department  of  Labor,  there   were  333,283                                                                    
     resident workers in Alaska in 2012).                                                                                       
Ms. Davis stated that the  annual growth rate of 3.2 percent                                                                    
was low compared to other  departments. She pointed out that                                                                    
FY  07 and  FY 08  DNR's budget  remained stable.  In FY  09                                                                    
there was  a slight jump in  the budget due to  an increased                                                                    
workload  in  the oil  and  gas  division and  an  amplified                                                                    
amount of work  on the Alaska Gasline  Inducement Act (AGIA)                                                                    
project. She mentioned  that in FY 12 there  was an increase                                                                    
in the budget because of an  influx of money provided by the                                                                    
legislature  to  assist  with  the  department's  permitting                                                                    
2:00:42 PM                                                                                                                    
Representative  Guttenberg  asked  if the  growth  rate  was                                                                    
directly  related to  specific  projects and  to efforts  to                                                                    
reduce DNR's  permitting backlog.  Ms. Davis  responded that                                                                    
it  was due,  in  large  part, to  an  increase in  resource                                                                    
development activities around the  state. She indicated that                                                                    
the chart only  reflected the GF portion of  the budget. The                                                                    
growth  rate  was  also  related  to  labor  contracts.  She                                                                    
notified  the  committee  that DNR  would  be  conducting  a                                                                    
detailed  ten-year   review  in  the   finance  subcommittee                                                                    
meeting on Tuesday of the following week.                                                                                       
2:01:43 PM                                                                                                                    
Representative Wilson asked about  the reference made on the                                                                    
chart about the department's  total FY 16 governor's request                                                                    
GF budget  equaling $337,456 per  resident worker.  She felt                                                                    
that   the  figure   was  high.   Ms.   Davis  agreed   with                                                                    
Representative  Wilson  that  the number  seemed  high.  She                                                                    
agreed  to  review  it  and   report  her  findings  to  the                                                                    
committee.   Representative   Wilson    replied   that   she                                                                    
appreciated Ms.  Davis looking into the  issue and commented                                                                    
that she did not want to be taxed at the suggested level.                                                                       
2:02:31 PM                                                                                                                    
Ms. Davis  continued with slide 20:  "Budget Growth Analysis                                                                    
Without AKLNG  - Department of  Natural Resources'  Share of                                                                    
Total  Agency Operations  (GF  Only,  in Thousands)  without                                                                    
     Without AKLNG, DNR's GF budget grew by $14,549.1                                                                           
     million between FY2007 and FY2016 Governor's Request -                                                                     
     an average annual growth rate of 1.8 percent.                                                                              
Ms. Davis  reported that in FY  15 there was an  increase of                                                                    
$8.9  million to  support AKLNG  associated with  the fiscal                                                                    
note for  a bill that  passed [during the 28th  Alaska State                                                                    
Legislature]; SB  138 [Short Title: Gas  Pipeline; AGDC; Oil                                                                    
and  Gas Prod.  Tax].  In  DNR's FY  16  budget request  the                                                                    
department asked  that the  funds for  the AKLNG  project be                                                                    
carried  forward and  additionally  requested further  funds                                                                    
for the project of $4.2 million.                                                                                                
Ms.  Davis  explained that  the  chart  reflected what  core                                                                    
services  within DNR  would remain  intact if  $13.2 million                                                                    
was  removed from  the FY  16  budget and  $8.9 million  was                                                                    
removed from the  FY 15 budget. The chart  showed an average                                                                    
annual growth rate of 1.8  percent. She pointed out that the                                                                    
horizontal blue  line reflected 1.54 percent  of the state's                                                                    
2:03:38 PM                                                                                                                    
Ms. Davis  discussed the chart  on slide 21:  "Budget Growth                                                                    
Analysis (Prepared By  Legislative Finance) - Appropriations                                                                    
within  the Department  of Natural  Resources  (GF Only,  in                                                                    
Thousands)."  She  explained  that the  graph  depicted  the                                                                    
growth  of   GF  only  for  appropriations   within  DNR  by                                                                    
appropriation  unit  based on  the  management  plan in  the                                                                    
governor's budget  from FY  07 through FY  16. The  top line                                                                    
[shown  in  grey]  signified   DNR's  increased  efforts  in                                                                    
permitting.  She pointed  out the  uptick on  the dark  blue                                                                    
line and attributed  it to the AKLNG project.  She also drew                                                                    
attention to  the peak on the  red line in FY  09 associated                                                                    
with the  Alaska Gasline Inducement Act  (AGIA) project. She                                                                    
stated   that  money   had  come   into  DNR's   budget  and                                                                    
subsequently gone back out with AGIA.                                                                                           
Ms. Davis advanced to the  graph on slide 22: "Budget Growth                                                                    
Analysis (Prepared by  Legislative Finance) - Appropriations                                                                    
within the  Department of Natural  Resources (All  Funds, in                                                                    
Thousands)." She  reported that the fire  suppression budget                                                                    
showed an increase  between FY 12 and FY 13  of $8.5 million                                                                    
in federal authority  added to the budget.  She relayed that                                                                    
DNR continued to use  more federal authority year-after-year                                                                    
as reflected in the chart.                                                                                                      
2:05:16 PM                                                                                                                    
Representative  Guttenberg commented  that fire  suppression                                                                    
typically  correlated  with  fire  activity  in  the  summer                                                                    
months. He  asked about  the jump  in FY  13 and  whether it                                                                    
indicated   increased  fire   activity  around   the  state.                                                                    
Commissioner Myers responded that  the department had seen a                                                                    
dramatic increase in  the amount of acreage  burned over the                                                                    
previous ten years.  He attributed the increase  in fires in                                                                    
interior  Alaska  to the  dry  climate.  He reiterated  that                                                                    
naturally  induced  fires  have increased  dramatically.  He                                                                    
also mentioned  that Alaska's forests  have been  plagued by                                                                    
certain invasive  species, such  as the Spruce  Bark Beetle,                                                                    
leaving dead timber  behind. He relayed that  there had been                                                                    
a significant amount of beetle kill identified.                                                                                 
Co-Chair  Neuman asked  Commissioner Myers  if DNR  had been                                                                    
doing more  controlled burns  to mitigate  fire suppression.                                                                    
Commissioner Myers responded  that fuel treatment definitely                                                                    
helped  but was  expensive.  He reported  that  DNR did  not                                                                    
fight all  fires but fought  fires that  affected structures                                                                    
and  communities such  as the  Funny River  fire. He  opined                                                                    
that  preventative   measures  and  decreasing   fuel  loads                                                                    
including back runs and timber harvests made sense.                                                                             
Co-Chair  Neuman  asked  about whether  the  department  had                                                                    
expanded  timber harvesting  because of  beetle infestation.                                                                    
Commissioner  Myers  responded  affirmatively and  spoke  of                                                                    
trimming  the   Spruce  Bark  Beetle  kills   on  the  Kenai                                                                    
Peninsula.  He  also relayed  that  because  of warm  spring                                                                    
weather,  snow  was melting  earlier  and  the White  Spruce                                                                    
trees  were  not getting  enough  soil  moisture. The  trees                                                                    
became  stressed   and  vulnerable  to  being   attacked  by                                                                    
invasive  species. He  indicated the  department had  seen a                                                                    
significant increase in the effects of invasive species.                                                                        
Co-Chair Neuman asked  about an open harvest  of beetle kill                                                                    
on the  Kenai Peninsula. Mr.  Fogels responded that  much of                                                                    
the beetle kill on the  Kenai Peninsula was within the Kenai                                                                    
National  Wildlife Refuge  and  Chugach  National Forest  on                                                                    
federal land.  He believed  the state had  done its  best to                                                                    
conduct timber  sales to thin  out the beetle kill  on state                                                                    
land. He reported  that DNR would be  doing additional sales                                                                    
on the  Kenai Peninsula. He  specified that the  majority of                                                                    
the beetle kill on the peninsula was on federal land.                                                                           
Co-Chair  Neuman  mentioned   open  harvesting  because  the                                                                    
commissioner had  spoken of it earlier  in the presentation.                                                                    
He asked if  areas of state land with issues  such as beetle                                                                    
kill would be  open for the timber industry  to harvest. Mr.                                                                    
Fogels asserted that the state  was offering timber sales on                                                                    
the  Kenai Peninsula.  He  mentioned  the clearing  activity                                                                    
done in the Tok area to  remove fire load. He suggested that                                                                    
fires in the  Tok area would be far less  intense because of                                                                    
clean-up  done  previously.  He   added  that  the  clearing                                                                    
provided a  significant amount  of biomass  for many  of the                                                                    
biomass projects such as the one at Tok's school.                                                                               
Co-Chair Neuman  wondered about the  success of  the state's                                                                    
timber  sales. Mr.  Fogels reported  that  timber sales  had                                                                    
been successful,  although the state had  recently conducted                                                                    
a  25-year sale  auction but  did not  receive any  bids. He                                                                    
concluded  that  sometimes  the   state  timber  sales  were                                                                    
successful and sometimes they were not.                                                                                         
2:09:16 PM                                                                                                                    
Vice-Chair Saddler asked if an  area was less likely to burn                                                                    
again for an  extended period after a fire. He  asked if the                                                                    
time frame was 10 to 25  years and about a limit. Mr. Fogels                                                                    
stated that in a forest  fire fuel was typically cleared out                                                                    
leaving  an area  less  likely  to catch  fire  again for  a                                                                    
while. The type  of forest and the  ecosystem determined the                                                                    
time frame. He confirmed that  fire danger decreased after a                                                                    
fire.  Commissioner  Myers  added   that  there  were  other                                                                    
factors that influenced times between area fires.                                                                               
Co-Chair Neuman commented  about dead trees in  the Big Lake                                                                    
area and the difficulty in  fighting a fire once it started.                                                                    
He relayed that the trees in  Big Lake were similar to Pixie                                                                    
Representative Guttenberg  asked if there was  a coordinated                                                                    
effort to make  resources available from a  fire. Mr. Fogels                                                                    
responded  affirmatively.  He  referred to  the  Tok  school                                                                    
example.  He  indicated  that his  staff  was  proactive  in                                                                    
working with the private sector.                                                                                                
Co-Chair  Neuman  asked  committee  members  to  hold  their                                                                    
questions until the conclusion of  DNR's presentation due to                                                                    
time constraints.                                                                                                               
Ms. Davis  provided an additional statistic.  The department                                                                    
had   been  looking   at  the   ten-year  average   of  fire                                                                    
suppression  GF  costs  in preparing  for  the  Division  of                                                                    
Forestry overview.  She reported  that the  ten-year average                                                                    
for UGF was $30.8 million. Over  ten years the state had one                                                                    
year  that fire  suppression  costs reached  a  high of  $66                                                                    
million and  another year  that the costs  reached a  low of                                                                    
$7.8  million. She  contended that  over  a ten-year  period                                                                    
there  were significantly  different fire  seasons from  one                                                                    
year to the next.                                                                                                               
2:12:08 PM                                                                                                                    
Ms. Davis advanced to the  pie chart on slide 23: "Operating                                                                    
Budget by  Division/Office." She explained that  the picture                                                                    
depicted  DNR's  operating  budget  by  divisions  or  major                                                                    
offices. It showed that the  FY 16 governor's budget request                                                                    
was $175.1 million compared to  the FY 15 management plan of                                                                    
$178.3  million.  She  pointed  out  that  the  Division  of                                                                    
Forestry looked  to have  the largest piece  of the  pie but                                                                    
explained  that  22 percent  of  the  division's budget  was                                                                    
designated for  fire suppression  preparedness and  the base                                                                    
amount for fire activity.                                                                                                       
Ms. Davis  explained the pie  chart on slide  24: "Operating                                                                    
Budget  by Fund  Type." She  relayed that  the slide  showed                                                                    
DNR's budget by fund type.  Funding for the operating budget                                                                    
was  comprised  of  49 percent  unrestricted  general  funds                                                                    
(UGF), 12.4  percent federal funds, 23  percent other funds,                                                                    
and  15.6 percent  designated  general  funds. She  included                                                                    
callouts to  clarify funding  sources categorized  as either                                                                    
"Other Funds"  or "Designated General  Funds." She  read the                                                                    
callouts on the slide.                                                                                                          
Ms. Davis  discussed the pie  chart on slide  25: "Operating                                                                    
Budget By Core  Services." She stated that  it reflected one                                                                    
additional  picture of  the operating  budget. She  reported                                                                    
that 48 percent  of DNR's budget was  allocated to fostering                                                                    
responsible development  under core services.  She continued                                                                    
to  highlight  that  24  percent   of  budget  dollars  were                                                                    
designated  for mitigating  natural hazard  threats such  as                                                                    
fire,  earthquake  and  volcanic  occurrences,  and  coastal                                                                    
2:15:21 PM                                                                                                                    
Ms. Davis  advanced to slide  26: "Operating Budget  By Core                                                                    
Service." She referred to it  as the "scary slide." She used                                                                    
the slide  to explain how  the department built  its budget.                                                                    
She  relayed that  the governor's  office  built the  budget                                                                    
using the FY  15 management plan as the  base. She indicated                                                                    
that  the upper  left  quadrant of  the  chart outlined  the                                                                    
department's  core  services  divided out  by  four  funding                                                                    
types: unrestricted general  funds (UGF), designated general                                                                    
funds (DGF),  other funds, and federal  funds. She continued                                                                    
to  explain  that  the right  side  [upper  right  quadrant]                                                                    
reflected  the total  for  the [FY  16]  adjusted base.  She                                                                    
furthered that  the Legislative Finance Division  (LFD) then                                                                    
allocated the  transactions in  the governor's  request into                                                                    
the  adjusted  base  including one-time  appropriations  and                                                                    
union  negotiated  salary   contract  costs.  The  resulting                                                                    
numbers then  became the  FY 16  adjusted base  figures. She                                                                    
indicated  that  the  FY  16   adjusted  base  numbers  were                                                                    
duplicated  in the  bottom left  quadrant of  the slide  and                                                                    
that the  bottom right  quadrant showed  the FY  16 governor                                                                    
amended budget  numbers. She referred  to the  change column                                                                    
on the far right of the  slide. A reduction of $12.6 million                                                                    
from the  management plan to LFD's  calculated adjusted base                                                                    
was  shown at  the  top of  the page.  An  increase of  $9.4                                                                    
million  from the  adjusted base  to the  governor's amended                                                                    
plan was displayed at the bottom of the page.                                                                                   
2:17:11 PM                                                                                                                    
Ms. Davis relayed  that an easier way to look  at the budget                                                                    
was  shown  on  slide  27:  "Summary  Of  FY2016  Governor's                                                                    
Amended Budget  Development." She began by  referring to the                                                                    
top of the slide at the  FY 15 management plan. She reported                                                                    
that the total on the top  line was $178.3 million with 1107                                                                    
positions. She  continued that  LFD's actions  were outlined                                                                    
in the light  blue area at the  top of the slide.  The FY 16                                                                    
costs  that were  added in  included  the union  contractual                                                                    
salary  increases in  the light  blue area  at the  top. The                                                                    
reduction  of one-time  items were  also shown  in the  same                                                                    
area of the slide and  included $8.9 million for AKLNG, $4.0                                                                    
million for  the Mental  Health Trust  Land Office,  and two                                                                    
additional  items resulting  in DNR's  FY 16  adjusted base.                                                                    
The adjusted base  was the starting point  for comparing the                                                                    
governor's amended plan.                                                                                                        
Ms. Davis  moved on  to explain the  FY 16  governor amended                                                                    
budget increments  in the light  green portion of  slide 27.                                                                    
She first  pointed to the  $8.9 million added back  into the                                                                    
budget for AKLNG. An additional  request of $4.2 million was                                                                    
seen  below the  AKLNG  increment. She  noted  that the  two                                                                    
items were the only UGF  items increased in the department's                                                                    
budget.  The  department also  added  in  the Mental  Health                                                                    
Trust money  and a small spending  authorization increase in                                                                    
the  pipeline and  gasoline projects  in the  State Pipeline                                                                    
Coordinator's office.                                                                                                           
Ms. Davis discussed  the pink section that  reflected the FY                                                                    
16 governor  amended budget decrements. The  figures reflect                                                                    
budget  reductions  spread  across all  of  DNR's  divisions                                                                    
totaling $8.6 million. The reduction  of $5.9 million in UGF                                                                    
equated to  a reduction  of 48  positions. She  relayed that                                                                    
she would  be providing  a one-page information  sheet about                                                                    
the  position reductions  to Representative  Neuman's office                                                                    
for distribution.                                                                                                               
Ms. Davis  referenced the comparison  towards the  bottom of                                                                    
the  slide  in  blue.  The comparison  included  the  FY  16                                                                    
adjusted base  (LFD's plan)  to the  FY 16  governor amended                                                                    
plan. It also  showed the FY 15 management  plan compared to                                                                    
the FY 16 governor amended  plan. The comparison between the                                                                    
department's budget  and the adjusted  base reflected  a 5.7                                                                    
percent increase largely due to  the AKLNG and Mental Health                                                                    
Trust  monies   being  added  back  into   the  budget.  She                                                                    
furthered  that   in  looking  at  the   comparison  to  the                                                                    
management  plan   the  department  showed  a   1.8  percent                                                                    
decrease  or a  2.5 percent  decrease in  UGF. She  reported                                                                    
that  the percentages  matched the  percentages provided  by                                                                    
Pat Pitney,  Director, Office of Management  and Budget. She                                                                    
relayed that the  last comparison, in the  orange section on                                                                    
slide  27, excluded  AKLNG  as the  addition  to DNR's  core                                                                    
services.  The  numbers  reflected an  overall  2.3  percent                                                                    
reduction in DNR's budget for  all funding sources and a 7.6                                                                    
percent reduction in UGF.                                                                                                       
Co-Chair Neuman commented that he liked the chart.                                                                              
2:21:13 PM                                                                                                                    
Ms. Davis  continued to slide  28: "Department  Comparison -                                                                    
FY2015  Management  Plan Operating  Budget  (UGF  only    in                                                                    
millions)." She  explained that the  slide was  a department                                                                    
comparison  based on  the FY  15 management  plan. Only  UGF                                                                    
were compared in  the slide. She reported that in  FY 15 DNR                                                                    
represented  2 percent  of the  state operating  budget. The                                                                    
slide  provided a  clear picture  of where  the state's  UGF                                                                    
dollars were  being spent. She  furthered that in FY  16 the                                                                    
department decreased to 1.75 percent of the state's budget.                                                                     
2:22:02 PM                                                                                                                    
Ms.  Davis  pointed to  the  pie  chart  on slide  29:  "DNR                                                                    
Revenue  Generation  -  DNR Generated  Revenue  Compared  To                                                                    
DNR's Unrestricted  General Fund  Budget Annual  Average For                                                                    
FY2006 -  FY 2014 (In  Thousands)." She summarized  that DNR                                                                    
generated an  average of $2.6  billion in  revenue annually.                                                                    
She  explained that  the large  blue section  reflected what                                                                    
monies went  into UGF. The  orange section  indicated monies                                                                    
going  into  the  Permanent Fund.  The  two  smaller  pieces                                                                    
represented  monies  going  into the  Constitutional  Budget                                                                    
Reserve Fund and  into other funds such as  the school fund,                                                                    
Agricultural  Revolving  Loan  Fund  (ARLF)  interests,  and                                                                    
excess program  receipts collected in the  recorder's office                                                                    
or  through  state  pipeline  coordinator  lease  fees.  She                                                                    
pointed  to  the smaller  blue  circle  in the  upper  right                                                                    
corner  that showed  DNR's average  annual GF  budget to  be                                                                    
$72.8 million  from FY 06  through FY 14. She  referred back                                                                    
to a statement  made by Commissioner Myer that  for every $1                                                                    
invested in DNR, the department's  return was $36. She noted                                                                    
that  the  revenue stream  picture  over  the following  two                                                                    
years was likely  to decrease. She reported  that in looking                                                                    
at FY  14 by itself compared  to the nine- year  average, FY                                                                    
14 revenue was down  approximately 2.7 percent. In comparing                                                                    
FY  13 to  FY 14,  FY  14 dropped  by almost  10 percent  in                                                                    
revenue  collection. She  wanted  to  present DNR's  broader                                                                    
2:24:12 PM                                                                                                                    
Commissioner Myers  reported on  slide 30:  "Revenue Actuals                                                                    
and  Forecast." He  included  the slide  to  show DNR's  two                                                                    
major sources of revenue; oil  and gas royalties and oil and                                                                    
gas taxes. He relayed that  the state's royalties were based                                                                    
on  a percentage  of production  which made  them much  less                                                                    
volatile  than  a  net  profit  share  oil  tax  system.  He                                                                    
continued that  even though  when the  price of  oil dropped                                                                    
the  royalty value  went down,  the royalty  value decreased                                                                    
proportionately much less  than did the tax in  a net profit                                                                    
system.  He suggested  that the  state maintain  the royalty                                                                    
share as  a base for  its budget, a  less risky part  of the                                                                    
state's  investment. He  emphasized  that  when prices  were                                                                    
really high on  a net profit system the state  stood to make                                                                    
significant money.  However, when  oil prices were  low, the                                                                    
state  stood to  lose money.  Royalties offered  some buffer                                                                    
from losing  money. He claimed  that royalty  management was                                                                    
an  extremely   important  factor   in  state   revenue.  He                                                                    
furthered  that  DNR's  management   of  the  resources  and                                                                    
commodities  was vital  to the  economy. He  reiterated that                                                                    
historically royalties were  not substantially volatile even                                                                    
with  price  change  compared  to a  net  profit  share  tax                                                                    
system. He opined that without  the royalty piece or without                                                                    
production  the state  would not  have  taxes. He  suggested                                                                    
that taxes  and royalties  formed the  basis of  the current                                                                    
economy. He noted that as  significant as the price drop was                                                                    
for FY  16, the state  still had  a strong stable  base even                                                                    
though the effects on royalties were weighty.                                                                                   
Commissioner   Myers  made   one  other   comment  regarding                                                                    
Representative   Wilson's  observation   of  the   cost  per                                                                    
resident.  He  reported  that  the  cost  per  resident  was                                                                    
approximately $37 per resident rather than $336 thousand.                                                                       
Vice-Chair Saddler referred to slide  24. He asked about the                                                                    
Permanent Fund  receipts in the "other  funds" category. Ms.                                                                    
Davis responded that the legislature  looked at DNR's budget                                                                    
in both  the Division  of Oil  and Gas  and the  Division of                                                                    
Mining,  Land and  Water. She  reported that  both divisions                                                                    
were generating revenues from  leases, royalties, and mining                                                                    
that   were  deposited   into   the   Permanent  Fund.   The                                                                    
legislature  chose  to  fund  a   portion  of  each  of  the                                                                    
divisions' operating budgets from Permanent Fund earnings.                                                                      
Co-Chair  Neuman   asked  Ms.  Davies  about   her  comments                                                                    
regarding  budget  consistencies  [by fund  type]  over  the                                                                    
prior ten years. Ms. Davis  stated that her comments applied                                                                    
generally across the board. She  provided FY 06 numbers. She                                                                    
relayed  that in  FY  06  UGF was  50  percent,  DGF was  15                                                                    
percent,  other funds  were 22  percent,  and federal  funds                                                                    
were 13 percent.                                                                                                                
Co-Chair Neuman asked if the  dollars amounts were about the                                                                    
same. Ms.  Davis confirmed that  the numbers were  very much                                                                    
the  same. Co-Chair  Neuman indicated  that  he was  pleased                                                                    
that  the increase  in monies  for electronic  upgrades were                                                                    
paying off.                                                                                                                     
2:28:37 PM                                                                                                                    
Representative  Wilson  asked  about fire  suppression.  She                                                                    
reported a  large fire  in the Fairbanks  area having  to do                                                                    
with  the military.  She  wanted to  know  what happened  to                                                                    
reimbursement  funds from  the  military  to compensate  for                                                                    
lost  state assets.  She wanted  to know  if the  funds were                                                                    
deposited into the  state UGF. Mr. Fogels  believed that the                                                                    
money would  be deposited into  the general fund.  Ms. Davis                                                                    
confirmed that  the funds  would be  deposited into  UGF and                                                                    
were referred to as "prior year recovery":                                                                                      
Representative  Wilson  asked  if  there  was  a  method  of                                                                    
tracking  the  cost  of  fire   suppression  per  year.  She                                                                    
suggested that the fire suppression  figures did not include                                                                    
any offsets received by the  state. Ms. Davis confirmed that                                                                    
offsets  were   not  part  of  the   figures.  However,  she                                                                    
indicated  that with  some  research she  would  be able  to                                                                    
provide accurate  numbers that included prior  year recovery                                                                    
offsets received by the state for the previous ten years.                                                                       
Representative  Wilson  did  not   request  that  Ms.  Davis                                                                    
provide the numbers.  She also asked about  air quality. She                                                                    
wondered whether  air quality was taken  into consideration.                                                                    
Mr.  Fogels responded  that he  would  get back  to her.  He                                                                    
stated that the  department had its fire  plan that outlined                                                                    
where  the state  should focus  on resource  development. He                                                                    
expounded that  property values and public  safety were both                                                                    
considered in prioritizing.  He was not sure  if air quality                                                                    
was  considered when  fighting fires.  Representative Wilson                                                                    
expressed   her   appreciation  of   Commissioner   Folgers'                                                                    
willingness to get back to her.                                                                                                 
Representative Gara referred to  slide 30. He wondered about                                                                    
the potential  of receiving negative  credits for FY  15 and                                                                    
FY  16.  He  wanted  to  know which  numbers  were  used  to                                                                    
generate  a forecast.  Commissioner Myers  relayed that  DOR                                                                    
Commissioner  Hoffbeck had  informed  him that  there was  a                                                                    
significant amount  of credit  not accounted  for FY  14. He                                                                    
suggested that Representative  Gara confer with Commissioner                                                                    
Representative  Gara asked  about  the anticipated  revenues                                                                    
from  the  Shell  development  project.  He  suggested  that                                                                    
currently the law was written  such that the state would not                                                                    
receive production credits three  miles off shore. The state                                                                    
would  have  to  depend  on   getting  a  share  of  federal                                                                    
royalties.  He  asked   if  there  had  been   or  would  be                                                                    
litigation to  enforce the  statehood compact's  90/10 split                                                                    
of offshore oil. Commissioner  Myers responded that although                                                                    
it  was a  priority  to the  current  administration and  to                                                                    
previous administrations  to get federal revenue  sharing in                                                                    
the offshore for Alaska he  was uncertain whether Alaska was                                                                    
entitled to receive federal revenue  sharing under the Outer                                                                    
Continental  Shelf Lands  Act (OCSLA).  He asserted  that it                                                                    
was a legal question.                                                                                                           
Co-Chair Neuman commented that the  question might be one to                                                                    
pose  to the  state's Attorney  General. Commissioner  Myers                                                                    
added that  there was another potential  benefit from OCSLA.                                                                    
He  explained that  property taxes  could  be collected  and                                                                    
there  was also  the  potential to  generate other  revenues                                                                    
with  oil  flowing  through facilities  that  are  on  state                                                                    
2:33:06 PM                                                                                                                    
AT EASE                                                                                                                         
2:35:36 PM                                                                                                                    
^FY 16 BUDGET OVERVIEW:  DEPARTMENT OF Military and Veterans                                                                  
2:35:55 PM                                                                                                                    
BRIGADIER GENERAL MIKE  BRIDGES, COMMISSIONER, DEPARTMENT OF                                                                    
MILITARY  AND  VETERANS  AFFAIRS introduced  the  PowerPoint                                                                    
presentation  "FY2016   Budget  Overview  -   Department  of                                                                    
Military and Veterans Affairs":                                                                                                 
2:37:06 PM                                                                                                                    
Brigadier General Bridges reviewed slide 2: "Mission":                                                                          
     To  provide  military  forces  to  accomplish  military                                                                    
     missions  in the  state or  around  the world;  provide                                                                    
     homeland security and  defense; emergency preparedness,                                                                    
     response,  and recovery;  veterans services;  and youth                                                                    
     military style training and education.                                                                                     
Brigadier  General   Bridges  turned   to  slide   3:  "Core                                                                    
        · Defend and Protect Alaska and the United States                                                                       
       · Disaster Preparedness/Response and Recovery                                                                            
        · Youth Intervention                                                                                                    
       · Outreach to Veterans and Military Families                                                                             
2:37:48 PM                                                                                                                    
Brigadier General  Bridges reviewed  the pie chart  on slide                                                                    
4: "DMVA FY2016 Budget by Core Service":                                                                                        
     Defend and Protect Alaska and the United States                                                                            
        · $31,646.2 all funds                                                                                                   
        · 165 PFT                                                                                                               
     Disaster Preparedness/Response and Recovery                                                                                
        · $11,603.8 all funds                                                                                                   
        · 62 PFT                                                                                                                
     Youth Intervention                                                                                                         
        · $12,831.8 all funds                                                                                                   
        · 91 PFT                                                                                                                
     Outreach to Veterans and Military Families                                                                                 
        · $2,261.7                                                                                                              
        · 4 PFT                                                                                                                 
Brigadier General  Bridges pointed out that  there were only                                                                    
four  full-time  positions  for  outreach  to  veterans  and                                                                    
military  families  serving  over 77  thousand  veterans  in                                                                    
Alaska. Many of the 77  thousand veterans were not currently                                                                    
registered  to   receive  federal  veterans'   affairs  (VA)                                                                    
benefits. The  state's mission was to  enroll every eligible                                                                    
veterans to receive benefits.                                                                                                   
2:38:42 PM                                                                                                                    
Co-Chair Neuman  asked about the current  status of veterans                                                                    
having  access  to   federal  hospitals.  Brigadier  General                                                                    
Bridges  responded that  great strides  had made  across the                                                                    
country  to   provide  veterans   access  to   federal  care                                                                    
facilities. He  reported that due  to outreach  conducted in                                                                    
coordination with  the Alaska Native health  care system and                                                                    
corporate care  providers around the state  federal programs                                                                    
were now linked for reimbursement  or direct cost benefit to                                                                    
the Alaska  Native Tribal Health Care  Trust programs. Also,                                                                    
he relayed  that ongoing expansion  efforts were  being made                                                                    
to provide  transportation to necessary care  facilities for                                                                    
veterans  short  on funds  or  living  in remote  locations.                                                                    
Recently,  the  department  was  awarded  a  $750  thousand,                                                                    
three-year grant  ($250 thousand per  year) to help  pay for                                                                    
ground  transportation to  VA care  facilities for  veterans                                                                    
living in  very rural parts  of Alaska  on and off  the road                                                                    
system.  The grant  monies could  also  be used  to pay  for                                                                    
transportation on  the Alaska Marine Highway  System (AMHS).                                                                    
The  department  previously   attained  funding  for  aerial                                                                    
transportation for veterans living off of the road system.                                                                      
Co-Chair  Neuman  asked  if veterans  had  access  to  rural                                                                    
health   centers.   Brigadier  General   Bridges   responded                                                                    
affirmatively. He  suggested that,  for example,  instead of                                                                    
flying  a  veteran into  Anchorage  from  Bethel or  from  a                                                                    
remote village in the Bethel  region, Yukon Kuskokwim Health                                                                    
Center was now able to provide  a veteran's care and have it                                                                    
paid for with federal VA funds.                                                                                                 
Co-Chair Neuman  commented that health care  was the largest                                                                    
concern   brought   to   his  attention   by   his   veteran                                                                    
constituents. Brigadier General Bridges  referred to a graph                                                                    
that showed  the progress  being made  in veteran  access to                                                                    
health care facilities.                                                                                                         
Co-Chair Neuman wanted Brigadier  General Bridges to provide                                                                    
the  committee additional  information  on  the location  of                                                                    
health  care   facilities  accessible  to   veterans  within                                                                    
Alaska. He  suggested that individual legislators  could, in                                                                    
turn, share  the information to their  district communities.                                                                    
Brigadier  General Bridges  indicated that  he was  happy to                                                                    
provide Co-Chair Neuman with the information.                                                                                   
Representative Wilson  asked about the number  of doctors in                                                                    
each  of the  facilities. Brigadier  General Bridges  stated                                                                    
that he did  not have the information for  federal VA health                                                                    
Representative Wilson  wondered if  the state kept  track of                                                                    
how many  doctors were available  to care for  veterans. She                                                                    
referred  to  going  on  post   in  Fairbanks.  It  was  her                                                                    
understanding  that  Fairbanks  lost  one  of  its  doctors.                                                                    
Brigadier  General Bridges  responded  that the  information                                                                    
Representative Wilson  was asking for was  not something the                                                                    
four-person office  tracked. He suggested that  she might be                                                                    
able  to get  the information  from the  federal branch.  He                                                                    
offered to ask  Mr. Bowen, the state's  VA administrator, if                                                                    
the state  had the  information. He  also offered  to pursue                                                                    
the information.                                                                                                                
Representative Wilson appreciated  Brigadier General Bridges                                                                    
making   the  effort   to  provide   the  information.   She                                                                    
understood that  there were  no doctors  currently available                                                                    
to  serve   the  area's   veterans.  Veteran   patients  saw                                                                    
physician assistants  rather than physicians. She  wanted to                                                                    
be able  to convey exactly  what services were  available to                                                                    
veterans in her district.                                                                                                       
Brigadier General  Bridges reiterated that he  would provide                                                                    
Representative  Wilson the  information. He  stated that  he                                                                    
was aware  of information  in the  Mat-Su Valley  because of                                                                    
recent hiring issues with providers.                                                                                            
2:42:34 PM                                                                                                                    
Brigadier General  Bridges advanced  to slide 5:  "Top Level                                                                    
Organizational   Chart."  He   explained   that  the   slide                                                                    
contained the department's  primary organizational chart and                                                                    
showed  the   divisions  within  the  department.   He  drew                                                                    
attention  to  the  stand-alone blue  box  representing  the                                                                    
Alaska Aerospace  Corporation which  he would  be discussing                                                                    
later  in  the presentation.  The  red  box represented  the                                                                    
federal  Title 10  officer,  working for  the  chief of  the                                                                    
National Guard  Bureau, who was the  protector and oversight                                                                    
person  for the  federal government's  property, funds,  and                                                                    
equipment  used  by  the  Title  32  Alaska  National  Guard                                                                    
Forces. He  clarified that the  person was  a representative                                                                    
of  the federal  government as  an advisor  to the  adjutant                                                                    
general  on  behalf  of  the  United  States  Department  of                                                                    
Brigadier General  Bridges stated that the  new commissioner                                                                    
for  the  department was  Laurie  Hummel,  retired from  the                                                                    
United States  Army. She was  in the process  of reenlisting                                                                    
which  accounted  for her  absence  in  the present  Finance                                                                    
Committee meeting.  He noted  Mr. Bob  Doehl, a  retired Air                                                                    
National Guard Colonel and former  Army soldier and officer,                                                                    
was the new deputy  commissioner for the department. Colonel                                                                    
Doehl  was   coming  into  the  position   with  substantial                                                                    
military experience.                                                                                                            
Brigadier  General Bridges  identified the  divisions within                                                                    
the department;  the Army National  Guard, the  Air National                                                                    
Guard,  the  Division  of Homeland  Security  and  Emergency                                                                    
Management,  the Alaska  Military Youth  Academy (a  program                                                                    
established approximately  20 years previously to  take care                                                                    
of the national security threat  of the state's young people                                                                    
becoming drains  on society versus productive  members), and                                                                    
the  Division of  Veterans  Affairs.  The Veteran's  Affairs                                                                    
office,  operated by  four staff  members, was  supported by                                                                    
the  veterans' service  officers  around the  state such  as                                                                    
Veterans  of  Foreign  Wars  and  the  American  Legion.  He                                                                    
reported  that the  total force  within  the department  was                                                                    
approximately  4,000 uniformed  members  and  over 300  non-                                                                    
uniformed employees.                                                                                                            
2:45:00 PM                                                                                                                    
Brigadier  General Bridges  reviewed  slide  6: "Alaska  Air                                                                    
National Guard":                                                                                                                
     2 Wings with more than 2,120 members                                                                                       
        · 168th ARW located at Eielson AFB                                                                                      
        · 176th WG located on JBER                                                                                              
     Primary Weapons Systems:                                                                                                   
        · KC-135 Tanker Wing at Eielson AFB                                                                                     
        · Space Warning and Surveillance Squadron                                                                               
        · C-17 Associate Squadron on JBER                                                                                       
        · C-130H Airlift Squadron                                                                                               
        · Rescue Coordination Center                                                                                            
        · HC-130, HH-60 & GA Rescue Squadrons                                                                                   
        · Air Defense Squadron                                                                                                  
Brigadier General  Bridges elaborated  that the slide  was a                                                                    
description of  the Alaska Air National  Guard. He explained                                                                    
that there were two wings:  the 168th Tanker Wing located at                                                                    
Eielson Air Force  Base (AFB) and 176th Wing  located at the                                                                    
Joint Base  Elmendorf Richardson (JBER). The  168th Wing was                                                                    
home  to  KC-135  tankers,   the  in-flight  area  refueling                                                                    
tankers,  and  housed  the Space  Warning  and  Surveillance                                                                    
Squadron,  an  early  warning watch  unit  that  looked  for                                                                    
incoming things  from outer space.  He pointed out  that the                                                                    
176th Wing was the most  complex and operational wing in the                                                                    
Air National Guard  across the country. The wing  had a C-17                                                                    
large cargo  jet squadron and  a C-130H small  cargo airlift                                                                    
squadron. The wing was also  home to the Rescue Coordination                                                                    
Center, the combat search and  rescue squadrons, and the air                                                                    
defense  squadron which  was  the  North American  Aerospace                                                                    
Defense Command (NORAD). NORAD's  mission, run by Air Alaska                                                                    
Air National Guard, was to  watch for interspace invasion by                                                                    
fixed-wing aircrafts from other nations.                                                                                        
2:46:36 PM                                                                                                                    
Brigadier General Bridges scrolled  to slide 7: "Alaska Army                                                                    
National Guard":                                                                                                                
     Three major units with more than 1900 members:                                                                             
          Joint Forces Headquarters                                                                                             
          297th Battlefield Surveillance Brigade                                                                                
             · Headquarters & Headquarters Co                                                                                   
             · 1-297thCAV Reconnaissance & Surveillance                                                                         
             · 297thCombat Support Company                                                                                      
             · 297thSignal Network Support Company                                                                              
             · B Company, 1stBattalion 143rdInfantry (ABN)                                                                      
          38th Troop Command                                                                                                    
             · 1stBattalion 207thAviation                                                                                       
             · 761stMilitary Police Battalion                                                                                   
             · 103rdCivil Support Team                                                                                          
             · 207thMulti-Functional Training Regiment                                                                          
             · 49thGround Missile Defense Battalion                                                                             
Brigadier  General  Bridges   informed  the  committee  that                                                                    
Alaska's 297th  Battlefield Surveillance Brigade was  one of                                                                    
nine  brigades  scheduled to  be  deactivated  later in  the                                                                    
current year.  He reported  that the  Army decided  that the                                                                    
battlefield  surveillance brigades  were  no longer  needed.                                                                    
The  department   was  working  on  the   replacement  force                                                                    
structure from  the Army as  it downsized. He  reported that                                                                    
the   38th  Troop   Command  was   the  brigade   equivalent                                                                    
administrative  headquarters  for   the  department's  other                                                                    
units within the state.                                                                                                         
Brigadier General Bridges briefly  discussed the 49th Ground                                                                    
Missile Defense  Battalion which was a  ground-based missile                                                                    
defense based at Fort Greely. He  relayed that it was a 24/7                                                                    
operational  national  strategic  mission  made  up  of  210                                                                    
Alaska  National  Guard  members   in  full-time  status  in                                                                    
support   of  Intercontinental   Ballistic  Missile   (ICBM)                                                                    
threats from rogue nations such  as Iran and North Korea. He                                                                    
shared  that  there was  a  small  full-time unit,  a  civil                                                                    
support team primarily for weapons  of mass destruction such                                                                    
as chemical, biological,  radiological hazards of accidental                                                                    
or  deliberate release  within the  state. The  support team                                                                    
was  also  deplorable  around  the  world  to  assist  other                                                                    
states, territories, and other nations.                                                                                         
2:48:12 PM                                                                                                                    
MICHAEL  O'HARE,  DEPUTY   DIRECTOR,  DIVISION  OF  HOMELAND                                                                    
SECURITY  AND   EMERGENCY  MANAGEMENT  explained   slide  8:                                                                    
"Division of Homeland Security & Emergency Management":                                                                         
     Critical services to protect lives and property from                                                                       
     terrorism and all other hazards, as well as to provide                                                                     
     rapid recovery from disasters.                                                                                             
Mr.  O'Hare  specified that  there  were  62 people  in  the                                                                    
division  that helped  Alaska communities  prepare, respond,                                                                    
recover,  plan, train,  and exercise  for any  disaster that                                                                    
might occur.  The division carried  out its  mission through                                                                    
partnerships with  local, state, and federal  agencies, non-                                                                    
governmental  organizations,  and faith-based  organizations                                                                    
to  help with  recovery processes  and some  unique tactical                                                                    
communications. The  division helped with alert  and warning                                                                    
systems such as tsunami warning  systems seen in the coastal                                                                    
communities. The division also  does outreach in the schools                                                                    
including earthquake preparedness.                                                                                              
2:49:49 PM                                                                                                                    
Brigadier  General Bridges  turned  to slide  9: "Office  of                                                                    
Veterans Affairs":                                                                                                              
     The  Office  of  Veterans  Affairs  continues  to  help                                                                    
     Alaska's  veterans  and   their  families  improve  the                                                                    
     quality of their lives by  helping them file claims for                                                                    
     education,  medical,  compensation/pension as  well  as                                                                    
    assisting them in obtaining earned military awards.                                                                         
Brigadier  General Bridges  reiterated  that  there were  77                                                                    
thousand  known  veterans in  Alaska,  only  32 thousand  of                                                                    
which were  registered with the  federal VA. One of  the key                                                                    
missions of  the Office of  Veterans Affairs was to  get the                                                                    
other  44  thousand  veterans   registered  to  receive  the                                                                    
benefits they were entitled.                                                                                                    
2:50:34 PM                                                                                                                    
Brigadier  General Bridges  advanced to  the graph  on slide                                                                    
10:  "Measures    and    Results    -    Federal    Veterans                                                                    
Administration Benefits in Alaska  by Type and Calendar Year                                                                    
(in Millions)."  He reviewed the  type of  benefits veterans                                                                    
received  in Alaska  including medical  care, insurance  and                                                                    
indemnity,  education  and  vocational  rehabilitation,  and                                                                    
compensation  and pension.  He pointed  out the  significant                                                                    
growth that had resulted from  the work performed by a staff                                                                    
of  four  people.  Millions of  dollars  were  brought  into                                                                    
Alaska in the form of  economic activity and earned benefits                                                                    
to individuals that served the nation since 2008.                                                                               
2:51:15 PM                                                                                                                    
Representative Edgmon referred to the  32 thousand of the 72                                                                    
thousand  [Secretary's  Note:  The number  was  77  thousand                                                                    
rather than  72 thousand] veterans registered.  He suspected                                                                    
that there  was a great  number of veterans in  rural Alaska                                                                    
that  were  not  registered.  He  wanted  Brigadier  General                                                                    
Bridges' input. He  also asked about the  number of veterans                                                                    
that  were  not  registered  and  were  homeless.  Brigadier                                                                    
General  Bridges indicated  that the  homeless numbers  that                                                                    
the  office  was  aware  of  based  on  working  with  other                                                                    
entities was less  than 1,000 in Alaska. He  stated that the                                                                    
last number he had heard was approximately 600.                                                                                 
Representative Edgmon  wondered about the  disparity between                                                                    
registered  and non-registered  veterans. Brigadier  General                                                                    
Bridges explained that  a registered veteran had  met with a                                                                    
veterans  service   officer,  provided   military  discharge                                                                    
records,  and  supplied  documentation  to  the  federal  VA                                                                    
system. He  asserted that there were  many different reasons                                                                    
that  veterans   did  not   register.  Some   veterans  were                                                                    
embarrassed  or  did  not  feel  they  deserved  to  receive                                                                    
benefits  based on  the  position in  which  they served  or                                                                    
because of  their length of  service. The philosophy  of the                                                                    
VA division  was that  it was  one veteran  at a  time. Some                                                                    
people   were  discouraged   by  the   bureaucratic  process                                                                    
involved in registering.                                                                                                        
Representative Edgmon thanked  Brigadier General Bridges for                                                                    
his response.                                                                                                                   
Co-Chair  Thompson   relayed  his  personal   experience  in                                                                    
registering  as a  veteran  in  Alaska. At  the  end of  the                                                                    
process he received his card and certification.                                                                                 
2:54:43 PM                                                                                                                    
Vice-Chair Saddler expressed his  approval of the efforts of                                                                    
the division. He wanted to  emphasize that the more veterans                                                                    
that  sign up  helped the  state with  its scores,  which in                                                                    
turn, provided  federal resources  for things  like clinics,                                                                    
hospitals, and staffing.                                                                                                        
Brigadier General  Bridges agreed with  Vice-Chair Saddler's                                                                    
comment  and  furthered  that  there  had  been  an  amazing                                                                    
increase in  federal dollar receipts in  Alaska. He reported                                                                    
that the 32  thousand registered in Alaska  were bringing in                                                                    
approximately $660  million in  federal dollars.  He claimed                                                                    
that with  a greater number of  registrations being received                                                                    
there  would  be  a  greater   number  of  federal  receipts                                                                    
received  by  the  state. He  relayed  that  demographically                                                                    
Alaska had the most veterans  of any state per capita. Also,                                                                    
Alaska  had   the  highest  number  of   military  personnel                                                                    
currently serving  per capita in  the nation. He  brought up                                                                    
the  fact that  family  members sometimes  were entitled  to                                                                    
benefits based  on the veteran's  military service  but were                                                                    
not always aware of their  entitlement. He surmised that the                                                                    
benefits  to the  state  could be  extraordinary  if all  of                                                                    
Alaska's veterans were registered.                                                                                              
2:56:25 PM                                                                                                                    
Representative  Wilson  asked  if   DMVA  was  working  with                                                                    
Department  of   Labor  and  Workforce   Development  (DLWL)                                                                    
regarding  education   and  vocational   rehabilitation  for                                                                    
veterans. Brigadier  General Bridges  relayed that it  was a                                                                    
combination  of both  the federal  and state  departments of                                                                    
labor and the federal and  state VA divisions. The state had                                                                    
its own office  in downtown Anchorage on DeBarr  Road in the                                                                    
same building  occupied by the state's  [federal] vocational                                                                    
Representative Wilson asked about  the role of the education                                                                    
and   vocational   rehabilitation    division   within   the                                                                    
department.  Brigadier General  Bridges  confirmed that  the                                                                    
division linked  up the  federal fund  resources to  pay for                                                                    
the educational component provided to veterans.                                                                                 
Representative  Wilson asked  if DMVA  was working  with the                                                                    
University of  Alaska (UA) system. She  indicated that there                                                                    
were counselors available  specifically for Alaskan veterans                                                                    
to  ensure  an  easy  transition in  enrolling  in  classes.                                                                    
Brigadier  General Bridges  responded that  UA was  sourcing                                                                    
the service with veteran service  officers at the university                                                                    
level  to assist  with the  veteran  student population.  He                                                                    
complimented  the university  president and  his chancellors                                                                    
for working  with DMVA,  with the  division's administrator,                                                                    
and with the federal VA office.                                                                                                 
2:58:36 PM                                                                                                                    
Brigadier  General  Bridges   discussed  slide  11:  "Alaska                                                                    
Military Youth Academy":                                                                                                        
     To meet  the life  coping skills and  educational needs                                                                    
     of 16  to 18 year old  Alaskans who are at  risk of not                                                                    
     completing  their secondary  education, and  to provide                                                                    
     them with the values, skills, education and self-                                                                          
     discipline to succeed as adults.                                                                                           
Brigadier   General  Bridges   explained  that   the  Alaska                                                                    
Military  Youth   Academy  was   not  a   constitutional  or                                                                    
statutory component  of DMVA. He  conveyed that  the academy                                                                    
was  and additional  program.  He  provided some  historical                                                                    
background.  The program  was enacted  by congress  about 20                                                                    
years prior  because of the  national threat of  obesity and                                                                    
the  high  school  drop-out potential  for  youth.  Congress                                                                    
tasked, challenged, and funded  the United States Department                                                                    
of  Defense to  implement the  program through  the National                                                                    
Guards of  the states. Currently  the program existed  in 36                                                                    
states. The program brought at-risk  youths that were either                                                                    
on  the verge  of dropping  or already  dropped out  of high                                                                    
school,  or  in  trouble  from other  failure.  The  program                                                                    
served youth  from the ages of  16 to 18. He  specified that                                                                    
the program was voluntary and  was provided in a residential                                                                    
military  boot camp  setting to  steer  participants in  the                                                                    
right direction. He  furthered that the program  was held at                                                                    
Fort  Richardson  for  5.5   months.  The  program  included                                                                    
academic,  physical  fitness, self-discipline,  citizenship,                                                                    
and community service components.                                                                                               
Brigadier  General Bridges  pointed  out that  DMVA ran  two                                                                    
residential   courses  per   year  with   approximately  270                                                                    
participants graduating annually. The  department had a goal                                                                    
of 288 graduates per year.  However, some participants chose                                                                    
not to complete  the program. He noted that there  was a 12-                                                                    
month  aftercare   component  in  which   participants  were                                                                    
required to  maintain monthly contact  with an  adult mentor                                                                    
to ensure their success in  one of the following: completing                                                                    
traditional  high  school,  moving into  an  educational  or                                                                    
vocational   technology  program,   joining  the   military,                                                                    
working  full-time,  or  working part-time  while  attending                                                                    
school.  He asserted  that following  aftercare participants                                                                    
were likely to succeed as adults.                                                                                               
Brigadier  General  Bridges told  of  a  grant program  that                                                                    
added  a 5-month  leg of  vocational  training working  with                                                                    
industry, similar  to an apprenticeship. The  end result was                                                                    
for  participants  to   transition  into  an  apprenticeship                                                                    
position  with  a  civilian company.  The  program  was  not                                                                    
currently in  place and  was new  to Alaska.  The department                                                                    
had requested federal funding and  was awaiting approval. He                                                                    
relayed  that a  state funding  match was  not required  and                                                                    
signified that  industry partners  had already  committed to                                                                    
partnering with DMVA.                                                                                                           
3:01:34 PM                                                                                                                    
Vice-Chair Saddler  stated he  had been  a participant  as a                                                                    
parent  and  mentor.  He  surmised   that  the  program  was                                                                    
effective and  supported the investment in  young people. He                                                                    
commended Director  Roses and his  crew. He relayed  that he                                                                    
would  offer   his  continued   support  for   the  program.                                                                    
Brigadier General  Bridges relayed his  personal involvement                                                                    
with and appreciation for the program.                                                                                          
3:02:38 PM                                                                                                                    
Brigadier General Bridges turned  to slide 12: "Measures and                                                                    
Results   -  Percent   of  Cadets   Placed  in   Employment,                                                                    
Education,  or Military  as Graduation  by Fiscal  Year." He                                                                    
reported that at  the conclusion of the  current class which                                                                    
ends  in   February  over  4,500  young   people  will  have                                                                    
graduated from the  program since its inception  in 1993. He                                                                    
remarked   that  the   percentage   of   cadets  placed   in                                                                    
employment, education,  or in the military  ebbed and flowed                                                                    
as seen in  the chart. He commented  that recruiting efforts                                                                    
were  ongoing.  However,  he attributed  a  large  group  of                                                                    
participant  self-referrals   to  the  influence   of  past-                                                                    
graduate family members and friends.  He continued to report                                                                    
that  there  had  been multi-generational  participation  in                                                                    
some families.                                                                                                                  
3:03:16 PM                                                                                                                    
Brigadier  General Bridges  advanced  to  slide 13:  "FY2016                                                                    
General Fund  Budget." He referred  to the box chart  on the                                                                    
far right of  the slide. He explained that  it depicted each                                                                    
agency's budget  request. He  emphasized that  DMVA's budget                                                                    
was  one of  the smallest  of  the state  agencies with  the                                                                    
largest  single  workforce.   National  Guard  members  were                                                                    
included   in  the   department's   workforce  numbers.   He                                                                    
disclosed  that the  majority of  the revenue  and operating                                                                    
funds  for the  department were  federal dollars.  The state                                                                    
provided some  matching funds and funds  to exclusively take                                                                    
care of  business. He concluded  that the DMVA's  budget was                                                                    
relatively small compared to the state's overall budget.                                                                        
Brigadier   General  Bridges   reported  that   three  weeks                                                                    
previously   the  governor's   office  requested   that  the                                                                    
department transfer  GF from DMVA  to a  separate designated                                                                    
fund for  the Alaska Aerospace Corporation.  He relayed that                                                                    
the Department  of Administration and the  legislature would                                                                    
determine  the future  of the  Alaska Aerospace  Corporation                                                                    
which would be presented later in the presentation.                                                                             
Brigadier General Bridges detailed  that the department's GF                                                                    
budget grew  overall by  $4.3 million between  FY 07  and FY                                                                    
16.  The governor's  request GF  budget reflected  an annual                                                                    
average growth of 3.1 percent.  The department's total FY 16                                                                    
governor's  request  GF  budget  equaled  $54  per  resident                                                                    
worker.  He  provided  information   about  changes  to  the                                                                    
department's Alaska  Military Youth Academy (AMYA)  fund. He                                                                    
explained that the  same money was coming  to the department                                                                    
in a different way.                                                                                                             
3:05:32 PM                                                                                                                    
Brigadier General  Bridges reviewed slide 14:  "General Fund                                                                    
Look-Back: Appropriations within  the Department of Military                                                                    
and Veterans Affairs (GF Only)."  He reported that the [red]                                                                    
line on the chart reflected  a change in pass through monies                                                                    
for the AMYA program. He pointed  out that the large bump on                                                                    
the green line represented a  change to the Alaska Aerospace                                                                    
Corporation  zeroing  out in  the  following  two years.  He                                                                    
referred  to the  administration's  request  to move  monies                                                                    
from  DMVA to  a  different fund  for  the Alaska  Aerospace                                                                    
Brigadier General  Bridges reported on slide  15: "All Funds                                                                    
Look-Back: Appropriations within  the Department of Military                                                                    
and  Veterans   Affairs  (All   Funds)."  He   informed  the                                                                    
committee  that the  slide uptick  included $1.3  million in                                                                    
federal funds for AMYA [red  line] and $250 thousand federal                                                                    
funds for  the veterans'  highly rural  transportation grant                                                                    
[blue line].  He also  noted the large  drop in  funding for                                                                    
the Alaska Aerospace Corporation on the green line.                                                                             
3:07:15 PM                                                                                                                    
Brigadier  General  Bridges  slide  16:  "Status  of  FY2015                                                                    
     Alaska Military Youth Academy (AMYA)                                                                                       
     $23.7 UGF                                                                                                                  
     This increment  was approved  to partially  off-set the                                                                    
     cost of new GED  testing requirements, which moved from                                                                    
     a paper-based  test to a computer-based  format January                                                                    
     1, 2014.  AMYA has completed  a new GED  testing center                                                                    
     and   has   identified    and   purchased   preparatory                                                                    
     curriculum  and  software  to  transition  testing  for                                                                    
     cadets to a computer-based format.                                                                                         
     $4,791.4 UGF / -$5,654.7 I/A Receipts                                                                                      
     This fund source  change was the result  of the passage                                                                    
     of HB  180, which  changed the funding  methodology for                                                                    
     AMYA  to  a  direct appropriation  instead  of  passing                                                                    
     through   the  Department   of   Education  and   Early                                                                    
     Development.  This  change has  had  no  impact on  the                                                                    
     services provided by AMYA.                                                                                                 
Vice-Chair   Saddler   asked   about   alternative   testing                                                                    
locations.  He  wondered  if  all   cadets  were  given  the                                                                    
opportunity to  take the General Education  Development test                                                                    
(GED). Brigadier General Bridges  responded that the GED was                                                                    
available to  any cadet.  He suggested  that not  all cadets                                                                    
were interested in taking the  GED. The department preferred                                                                    
and encouraged participants to receive  either a high school                                                                    
diploma  accredited through  the AMYA  program or  a diploma                                                                    
from a traditional high school.                                                                                                 
Vice-Chair  Saddler  asked  about   the  number  of  academy                                                                    
graduates.  Brigadier  General   Bridges  relayed  that  the                                                                    
academy anticipated  having over  4,500 students at  the end                                                                    
of the current class since 1993.                                                                                                
3:08:53 PM                                                                                                                    
Representative   Guttenberg  asked   about  the   military's                                                                    
recognition  of  successfully   completing  the  GED  versus                                                                    
receiving a  high school diploma. Brigadier  General Bridges                                                                    
suggested  that  when  the military  downsized,  as  it  was                                                                    
currently  doing, it  automatically increased  its standards                                                                    
for membership into the military  services. An applicant had                                                                    
to  be  a close-to-perfect  human  specimen  in all  primary                                                                    
categories  including  physical   fitness,  medical  health,                                                                    
academics (i.e. a  high school diploma), and  clear of moral                                                                    
and ethical  legal issues. He  continued to explain  that in                                                                    
the  current military  climate,  other than  during a  surge                                                                    
requirement, holders of high school  diplomas were much more                                                                    
likely to be enlisted into the military than GED holders.                                                                       
3:10:58 PM                                                                                                                    
Brigadier  General  Bridges  turned  to  slide  17:  "FY2016                                                                    
Budget  Highlights -  Decreases  in  the Governor's  Amended                                                                    
FY2016 budget":                                                                                                                 
     Decreases in the Governor's Amended FY2016 budget                                                                          
     · $350.0 UGF -Interior Veterans Cemetery operations                                                                        
          Construction  of  the Interior  Veterans  Cemetery                                                                    
          has been  delayed due  to availability  of federal                                                                    
          funds. Therefore,  operating funds are  not needed                                                                    
          in FY2016.                                                                                                            
     · $300.0 UGF -Base Realignment and Closure Impact                                                                          
          DMVA  will  work   with  available  resources  and                                                                    
          coordinate  with   other  interested   parties  to                                                                    
          advocate  for  sustainment  of  Alaska's  military                                                                    
     · $350.0 UGF -Army Guard Facilities Maintenance                                                                            
          DMVA anticipates some cost  savings due to changes                                                                    
          in cost-sharing ratios with the National Guard.                                                                       
     · $133.6 GF Match/$75.5 Fed -Pre-Disaster Mitigation                                                                       
          Pre-Disaster   Mitigation   activities   will   be                                                                    
Brigadier General Bridges reported  that $350 thousand would                                                                    
be  the annual  operating  cost the  department would  incur                                                                    
once  the  veterans' cemetery  in  Fairbanks  was built  and                                                                    
opened.  He shared  that the  federal VA  reappropriated the                                                                    
monies for  the following  year due to  delayed construction                                                                    
of the cemetery.                                                                                                                
Brigadier  General Bridges  moved to  discuss funds  used in                                                                    
conjunction  with   base  realignment  and   closure  impact                                                                    
assistance.  He   reported  that  retired   senior  military                                                                    
officials were  contracted to examine the  state's strategic                                                                    
messaging and preparations for  base realignment and closure                                                                    
issues.  He  relayed that the reduction was only  for FY 16.                                                                    
He  suggested that  the  funds could  be  reinstated in  the                                                                    
future if needed.                                                                                                               
Co-Chair Thompson  asked if the  funds could have  been used                                                                    
to address  and offset some  of the base  realignments being                                                                    
done  with  just a  reduction  in  force. Brigadier  General                                                                    
Bridges responded  that the  department was  already working                                                                    
with the community leadership of  Fairbanks and Anchorage to                                                                    
reduce the  potential threat of  one or both of  the brigade                                                                    
combat teams  in U.S. Army  Alaska. Co-Chair  Thompson asked                                                                    
if  any of  the funds  slated for  the base  realignment and                                                                    
closure impact  assistance were being  used to  mitigate the                                                                    
reduction  of  Alaska's   brigade  combat  teams.  Brigadier                                                                    
General Bridges replied in the negative.                                                                                        
Vice-Chair Saddler  announced that there would  be listening                                                                    
sessions  in Anchorage  and Fairbanks  within the  following                                                                    
two weeks.  He encouraged  members in attendance  to clearly                                                                    
express opposition  to any reductions to  active duty forces                                                                    
in Alaska  including JBER and  all of the bases  in Alaska's                                                                    
interior. Brigadier  General Bridges  added that all  of the                                                                    
new  department leadership  would  be  participating in  the                                                                    
listening sessions.                                                                                                             
Brigadier  General  Bridges  continued  to  review  proposed                                                                    
budget  decrements.  He  stated   that  the  department  had                                                                    
benefited from  other states  not spending  their facilities                                                                    
monies in  the previous  three years. Alaska  received close                                                                    
to  $50  million of  additional  federal  dollars to  build,                                                                    
maintain,  and modernize  select Army  Guard facilities.  He                                                                    
offered that  the department also received  $133 thousand GF                                                                    
match for pre-disaster  mitigation activities which included                                                                    
conducting preparatory training  outreach in communities for                                                                    
their own  local emergency planning processes.  For example,                                                                    
instead  of  spending money  on  travel  the department  was                                                                    
moving  towards more  video or  teleconference training  and                                                                    
using the  mail system  to disseminate  training information                                                                    
to  assist  communities  in  refining  their  own  emergency                                                                    
response plans. Also, the department  intended to modify its                                                                    
twice-yearly   consolidated   training  by   expanding   the                                                                    
training packages and  information provided to participants.                                                                    
He  concluded  that  DMVA  would be  more  creative  in  how                                                                    
training and messaging was delivered.                                                                                           
3:14:44 PM                                                                                                                    
Brigadier General  Bridges continued with slide  18: "FY2016                                                                    
Budget Highlights  - Increases  in federal authority  in the                                                                    
Governor's Amended FY2016 budget":                                                                                              
     Increases in federal authority in the Governor's                                                                           
     Amended FY2016 budget                                                                                                      
     · $1,300.0 Fed -Alaska Military Youth Academy (AMYA)                                                                       
          AMYA  anticipates award  of  a  40-month grant  to                                                                    
          provide  a  job-training   component  to  selected                                                                    
          cadets  who  have   completed  AMYA's  residential                                                                    
     · $250.0 Fed -Office of Veterans Affairs                                                                                   
          The  Office  of  Veterans Affairs  was  awarded  a                                                                    
          federal grant  to off-set the  costs of  ground or                                                                    
          sea  transportation of  veterans  in highly  rural                                                                    
Brigadier General Bridges indicated  that no state match was                                                                    
required  for  either  item.  The   state  only  needed  the                                                                    
authority to receive the federal funds.                                                                                         
3:15:39 PM                                                                                                                    
Brigadier  General  Bridges  deferred   to  a  colleague  to                                                                    
present information about the Alaska Aerospace Corporation.                                                                     
MARK GREBY,  PRESIDENT AND  CHIEF OPERATING  OFFICER, ALASKA                                                                    
AEROSPACE CORP, DEPARTMENT OF  MILITARY AND VETERANS AFFAIRS                                                                    
explained slide 19: "Alaska Aerospace Corporation":                                                                             
     · Alaska Aerospace Corporation (AAC) was created in                                                                        
        1991 as a public corporation of the state within the                                                                    
       Department of Military and Veterans' Affairs.                                                                            
     · AAC is an independent corporation with board of                                                                          
        directors, appointed by the Governor                                                                                    
     · AAC's mission is to develop aerospace related                                                                            
        economic growth within the State of Alaska                                                                              
     · AAC employs approximately 50 personnel                                                                                   
     · AAC's KLC is the United States' newest launch                                                                            
        facility and holds an FAA Commercial Space                                                                              
        Transportation license                                                                                                  
     · Kodiak Island has unparalleled access to the                                                                             
        southern sky and poses a very low risk to public                                                                        
     Current Launch Vehicles                                                                                                    
        · Minotaur IV & Taurus XL (Orbital)                                                                                     
        · Athena I and II (Lockheed)                                                                                            
     Future Launch Vehicles                                                                                                     
        · Antares (Orbital)                                                                                                     
        · Athena III (Lockheed)                                                                                                 
Mr.  Greby clarified  that the  definition of  aerospace did                                                                    
not include anything to do  with airplanes, airports, or the                                                                    
airlines.  He  made  a  correction to  the  slide  that  AAC                                                                    
employed approximately 35 personnel rather than 50.                                                                             
3:17:46 PM                                                                                                                    
Mr.   Greby  advanced   to  slide   20:  "Alaska   Aerospace                                                                    
Corporation - FY2015 Budget Changes":                                                                                           
     · New Launch Contract                                                                                                      
     · New Global Imaging Services Contract                                                                                     
     · $2 Million Reduction of General Funds                                                                                    
     · Deleted 3 Vacant PCNs (Program Analyst, Acct Tech,                                                                       
     · Deferred Maintenance                                                                                                     
Mr. Greby indicated  that AAC's budget request in  FY 15 was                                                                    
approximately $6  million in  GF. In  FY 15  the corporation                                                                    
received and  executed a launch  contract. He  reported that                                                                    
the initial  launch went fine, although  the customer flight                                                                    
did  not go  as well.  Also, in  FY 15  AAC became  the sole                                                                    
distributor of  satellite produced  products of  Alaska data                                                                    
upon  the  execution  of  a   new  Global  Imaging  Services                                                                    
contract. He  added that  AAC reduced its  GF by  $2 million                                                                    
from  the  prior  year,  deleted  3  vacant  positions,  and                                                                    
planned  to  use  deferred maintenance  monies  received  in                                                                    
3:19:22 PM                                                                                                                    
Mr.   Greby  reported   on  slide   21:  "Alaska   Aerospace                                                                    
Corporation - FY2016 Budget Highlights":                                                                                        
     · Complete Damaged Facilities Rebuild                                                                                      
     · Secure Additional Launch Contract                                                                                        
     · Receive Federal Operations and Sustainment Funding                                                                       
     · Initiate Imaging Data Satellite Downlink Services                                                                        
     · Expand Launch Services Market                                                                                            
     · Eliminate State Operations and Sustainment, and                                                                          
        Deferred Maintenance Funding                                                                                            
     · Position AAC to Become Independent of Future State                                                                       
        Funding Needs                                                                                                           
Mr. Greby reported that  deconstruction was currently taking                                                                    
place. He  elaborated that only  insurance funds  were being                                                                    
used to  rebuild the damaged launch  facility. He emphasized                                                                    
that state  monies were not  in any  way being used  for the                                                                    
rebuild. The  facility was being  reconstructed to  the pre-                                                                    
mission condition and nothing  further. He reported that AAC                                                                    
was  working to  secure  an additional  launch contract.  He                                                                    
mentioned that AAC was on  contract with another launch, but                                                                    
it  had  not been  funded  to  date. The  original  contract                                                                    
specified that AAC  would be able to launch  again within 12                                                                    
Mr.  Greby detailed  that the  Alaska Aerospace  Corporation                                                                    
was  in  the process  of  obtaining  federal operations  and                                                                    
sustainment funding. The original  request was in the amount                                                                    
of $10 million but was  decreased to $7 million in committee                                                                    
then  further  reduced to  $6  million  divided between  all                                                                    
orbital  launch   sites  that  support  the   United  States                                                                    
Department  of Defense  launches. There  were only  2 launch                                                                    
sites  that qualified,  the Aerospace  Corporation site  and                                                                    
the  Wallops Island  launch  in  Virginia. Alaska  Aerospace                                                                    
Corporation would be receiving about $3 million.                                                                                
Mr. Greby  continued to review  FY 16 budget  highlights. He                                                                    
stated that  AAC would be initiating  imaging data satellite                                                                    
downlink services.  Currently AAC received its  data from an                                                                    
imaging company,  but would  be downloading  and downlinking                                                                    
directly  from  the  satellite. He  conveyed  that  AAC  was                                                                    
reaching out  to a much  larger market to expand  its launch                                                                    
3:22:23 PM                                                                                                                    
Representative Gara  referred to  page 20 regarding  the new                                                                    
launch contract.  He wondered  about any  remaining launches                                                                    
falling under  the contract. Mr. Greby  responded that AAC's                                                                    
contract  was for  a launch  and required  that the  site be                                                                    
ready for another launch in twelve months.                                                                                      
Representative Gara  asked if there  was a commitment  for a                                                                    
launch in twelve months. Mr.  Greby confirmed that AAC had a                                                                    
commitment  for  a  launch.  However,  the  launch  was  not                                                                    
presently federally funded.                                                                                                     
Representative  Gara  asked  about  securing  an  additional                                                                    
launch contract highlighted  on slide 21. He  wanted to know                                                                    
if a launch  contract had been secured.  Mr. Greby clarified                                                                    
that  an additional  launch contract  had  not been  secured                                                                    
Representative Gara  wondered about potential  revenues from                                                                    
the  new   Global  Imaging  Services  Contract.   Mr.  Greby                                                                    
clarified whether  Representative Gara was asking  about the                                                                    
line item on slide 21:                                                                                                          
   · Initiate Imaging Data Satellite Downlink Services                                                                          
Representative  Gara clarified  that he  was referring  to a                                                                    
line item on slide 20:                                                                                                          
   · New Global Imaging Services Contract                                                                                       
Mr.  Greby explained  that there  was no  any infrastructure                                                                    
associated  with  the  contract.   He  emphasized  that  the                                                                    
contract was purely a means to generate revenue.                                                                                
Representative  Gara asked  about the  cost of  the contract                                                                    
and  the  estimated  revenue potential  that  AAC  stood  to                                                                    
generate from the  contract. Mr. Greby stated  that he would                                                                    
be  happy   to  provide  the  committee   with  the  numbers                                                                    
Representative Gara was requesting.                                                                                             
Co-Chair Thompson mentioned  that he was aware  of a meeting                                                                    
scheduled the  following week in  which Mr.  Campbell and/or                                                                    
Mr.  Greby  would  be  presenting a  business  plan  to  the                                                                    
committee.  He suggested  Mr.  Greby  provide the  committee                                                                    
with the  requested numbers at  that time. Mr.  Greby agreed                                                                    
that AAC  could provide numbers  to the committee.  Also, he                                                                    
stated that Mr. Campbell would  be meeting with the governor                                                                    
in the  following week. Co-Chair Thompson  confirmed that he                                                                    
would also be meeting with Mr. Campbell.                                                                                        
3:25:33 PM                                                                                                                    
Vice-Chair Saddler asked  about economic diversification. He                                                                    
wanted to know  about the economic ripple  effects of having                                                                    
a   medium  launch   facility   operating   in  Alaska.   He                                                                    
specifically asked Mr. Greby to  identify ripple effects for                                                                    
the  University  and  for   private  businesses.  Mr.  Greby                                                                    
responded  that  medium lift  was  the  new market  for  the                                                                    
majority of  new satellite  launches. Alaska  was positioned                                                                    
to accommodate new constellations  of satellites that had to                                                                    
go  into   polar,  sun-synchronous  types  of   orbits  only                                                                    
reachable out  of a  United States  launch site.  The Kodiak                                                                    
Island and the  Vandenberg Air Force Base  launch sites were                                                                    
the   only  qualified   locations.  He   relayed  that   the                                                                    
governor's  order  halted  AAC's progress  transitioning  to                                                                    
medium lift status.                                                                                                             
3:27:40 PM                                                                                                                    
Representative   Kawasaki   wanted   further   clarification                                                                    
regarding securing  an additional launch contract  in FY 16.                                                                    
He asked  if it  was in addition  to the  multi-year, multi-                                                                    
contract  launch secured  in the  previous  year. Mr.  Greby                                                                    
responded  in   the  affirmative.  He  specified   that  the                                                                    
additional  launch contract  was in  addition to  the multi-                                                                    
year contract.                                                                                                                  
Co-Chair Thompson  asked if  it was  true that  the governor                                                                    
had  put everything  on hold  and was  not presently  moving                                                                    
Mr.  Greby responded  that  AAC was  not  moving forward  on                                                                    
medium  lift  but  was  advancing   on  the  current  launch                                                                    
capabilities  on the  current  launch site  in the  existing                                                                    
HB  72  was   HEARD  and  HELD  in   committee  for  further                                                                    
HB  73  was   HEARD  and  HELD  in   committee  for  further                                                                    
Co-Chair Thompson thanked the presenters and reviewed the                                                                       
schedule for the following day.                                                                                                 

Document Name Date/Time Subjects
DNR - HFin Budget Overview FINAL.pdf HFIN 2/6/2015 1:30:00 PM
DMVA House Finance Overview - edited 2 5 15.pdf HFIN 2/6/2015 1:30:00 PM
DNR Response HFIN Overview.pdf HFIN 2/6/2015 1:30:00 PM
Response to HFIN DNR Summary One-Pager FY2016 Gov Amended Budget.pdf HFIN 2/6/2015 1:30:00 PM
DMVA Response HFIN Overview.pdf HFIN 2/6/2015 1:30:00 PM
DMVA Response HFIN Native Health Care Orgs & Veterans.pdf HFIN 2/6/2015 1:30:00 PM