Legislature(2009 - 2010)SENATE FINANCE 532

03/17/2010 09:00 AM Senate FINANCE

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09:04:33 AM Start
09:05:00 AM SB230 || SB253
10:49:44 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
Heard & Held
Dept of Natural Resources
Dept of Environmental Conservation
Dept of Fish & Game
Dept of Commerce, Community & Economic
Dept of Administration
Dept of Public Safety
+ Bills Previously Heard/Scheduled TELECONFERENCED
SENATE BILL NO. 230                                                                                                           
     "An Act  making and amending  appropriations, including                                                                    
     capital  appropriations,  supplemental  appropriations,                                                                    
     and  other  appropriations;  making  appropriations  to                                                                    
     capitalize  funds;  and   providing  for  an  effective                                                                    
SENATE BILL NO. 253                                                                                                           
     "An  Act  making  capital appropriations  for  deferred                                                                    
     maintenance   projects,   equipment  replacement,   and                                                                    
     emergency  repairs;  and  providing  for  an  effective                                                                    
      Department of Natural Resources; Department of                                                                          
  Environmental Conservation; Department of Fish and Game                                                                     
9:05:00 AM                                                                                                                    
              Department of Natural Resources                                                                                 
LETA SIMONS, DIRECTOR, DIVISION OF SUPPORT SERVICES,                                                                            
DEPARTMENT OF NATURAL RESOURCES introduced the Department                                                                       
of Natural Resources' (DNR) final deferred maintenance item                                                                     
AMD 47794. The funding request is $330 thousand in general                                                                      
funds. She explained that the project includes maintenance                                                                      
for the plant material center seed cleaning and seed                                                                            
storage facility renovation. The plant material center is                                                                       
located in Palmer. The project includes insulating and                                                                          
armoring the walls, painting surfaces, replacing lighting                                                                       
and ventilation system and doors, and restoring the                                                                             
facility's drive surfaces.                                                                                                      
Co-Chair Stedman concluded hearings on the deferred                                                                             
maintenance budget and began capital budget proceedings for                                                                     
9:06:49 AM     AT EASE                                                                                                        
9:07:11 AM     RECONVENED                                                                                                     
Ms. Simons began with capital budget RN 49193 concerning                                                                        
reservoir studies evaluating oil and gas resources in the                                                                       
North Slope and Cook Inlet. The budget request is $3.5                                                                          
million in general funds as a continuation of funding for                                                                       
an ongoing project. The Division of Oil and Gas identified                                                                      
a need to hire consultants in order to support                                                                                  
determinations that maximize state revenue. The                                                                                 
determinations include the amount of natural gas used for                                                                       
oil recovery versus the amount transported by pipeline as                                                                       
well as the evaluation of gas off-take strategies,                                                                              
evaluation of gas supply in Cook Inlet, and promotion of                                                                        
further development in Cook Inlet.                                                                                              
Ms. Simons referred to RN 41415 for $300,000 in general                                                                         
funds. The project includes gas pipeline corridor geologic                                                                      
hazards and resources. The funding is necessary to complete                                                                     
the geologic mapping, hazard assessment and resource                                                                            
evaluation along the proposed gas pipeline corridor from                                                                        
Delta Junction to the Canadian border. The final phase in                                                                       
FY12 will support preparation of final reports to                                                                               
consolidate and summarize the interpretations of geologic                                                                       
hazards and resources in the corridor. The funding pays for                                                                     
contract geologists, laboratory analysis and contracting of                                                                     
helicopters for field work.                                                                                                     
9:10:00 AM                                                                                                                    
Ms. Simons described RN 49185 with a request of $500                                                                            
thousand in general funds for the assessment of in-state                                                                        
gas energy potential Phase 1 of 3. The total cost over                                                                          
three years will equal $1.2 million. She mentioned numerous                                                                     
sedimentary basins along existing transportation corridors                                                                      
near population centers as potential sources of inexpensive                                                                     
natural gas. The goal of the project is to provide                                                                              
information that will reduce local energy costs.                                                                                
Ms. Simons described RN 33595 for wild land fire truck                                                                          
replacement for the request of $1,150,000 in general funds.                                                                     
The funding will purchase engines for wild land fire                                                                            
fighting. The funding will also replace older vehicles or                                                                       
those not included in the Department of Transportation and                                                                      
Public Facilities' (DOT) replacement credit program.                                                                            
Ms. Simons addressed RN 49202 for the replacement of state                                                                      
owned tactical aircraft used in wild land firefighting. The                                                                     
funding request is $600 thousand in general funds. She                                                                          
pointed out language in the supplemental bill allowing the                                                                      
utilization of $2 million from the sale of the two existing                                                                     
state owned planes. The total cost of the two new airplanes                                                                     
is $2.6 million. This request supplies the remainder of                                                                         
funds needed following the expected $2 million gain.                                                                            
9:12:50 AM                                                                                                                    
Senator Huggins asked if an aircraft made in the United                                                                         
States had equivalent performance measures. Ms. Simons                                                                          
answered that the current planes are Swedish and finding                                                                        
parts has proven difficult. She understood that domestic                                                                        
airplanes did exist and the intention is to bid on them.                                                                        
Senator Olson asked for more specific information regarding                                                                     
replacement aircraft. Ms. Simons responded that the                                                                             
department is seeking multi engine, high wing, pressurized                                                                      
all weather aircraft, but the bidding process will reveal                                                                       
additional information.                                                                                                         
Ms. Simons detailed RN 41410 for the Alaska Land Mobile                                                                         
Radio (ALMR). She noted that the Federal Communications                                                                         
Commission (FCC) requires emergency response agencies to                                                                        
upgrade to narrow band operations by January 1, 2013 with                                                                       
prior capital improvement project (CIP) funds for the                                                                           
conversion. The Division of Forestry's Area Dispatch                                                                            
Offices and Fire Engines now operate on the road system are                                                                     
equipped with the ALMR capable radios. She pointed out that                                                                     
ALMR does not provide "off road" service making it                                                                              
necessary to augment with rural communication equipment.                                                                        
The requested funds will be used to purchase bridges                                                                            
allowing access to an area's local conventional frequencies                                                                     
in addition to the ALMR system.                                                                                                 
Co-Chair Hoffman asked if the state pursued plans to bring                                                                      
ALMR to off-road sites. Ms. Simons responded that a plan                                                                        
does not exist at this point.                                                                                                   
Senator Thomas noted discussions about the ALMR radio and                                                                       
potential substitutes. He commented on the high price of                                                                        
the radios. He expressed concern regarding the long term                                                                        
efficacy of the radios.                                                                                                         
9:16:41 AM                                                                                                                    
Senator Olson countered that while expensive, the ALMR                                                                          
system is the best currently available. He spoke in favor                                                                       
of the system.                                                                                                                  
Ms. Simons addressed RN 38872 for unified permitting                                                                            
project, Phase 5 of 7. She noted the request of $800,000 in                                                                     
general funds. The project is long term and will provide an                                                                     
interactive permit application system to streamline the                                                                         
permit process for both applicants and DNR staff. The                                                                           
system integrates maps and other documents with case                                                                            
related data and modernizes the entire DNR case management                                                                      
system. The automated processes include land use permits,                                                                       
water rights, easements, rights of way, mining claims, ice                                                                      
roads, mericulture sights, and eventually DNR's entire                                                                          
permit and leasing processes.                                                                                                   
Ms. Simons addressed RN 45272 which is a continuation of                                                                        
the MatSu hydrogeology assessment. The general fund request                                                                     
is $295 thousand for FY11. Portions of the MatSu borough                                                                        
have increasing demands on ground water that cause concerns                                                                     
for the aquifer's ability to provide sufficient high                                                                            
quality water. The study's goal is to provide knowledge to                                                                      
effectively manage those ground water resources.                                                                                
Ms. Simons detailed RN 42881 and the petroleum systems                                                                          
integrity office gap analysis Phase 3 of 4. This general                                                                        
fund request is $125 thousand. In response to the pipeline                                                                      
corrosion issues that led to shut down of the Prudhoe Bay                                                                       
Oil Field and halted the flow of oil through the trans                                                                          
Alaska pipeline, administrative order number 234                                                                                
established the petroleum system's integrity office within                                                                      
DNR and required the office to provide a gap analysis. The                                                                      
gap analysis has thus far identified existing statutory and                                                                     
regulatory authorities and jurisdictions in the various                                                                         
state agencies including DNR, the Department of                                                                                 
Environmental Conservation (DEC), the Department of Public                                                                      
Safety (DPS), the Department of Commerce, Community and                                                                         
Economic Development (DCCED), the Department of Fish and                                                                        
Game (DFG), the Department of Revenue (DOR), the Department                                                                     
of Administration (DOA), the Department of Law (DOL), and                                                                       
the Department of Labor and Workforce Development (DLWD). A                                                                     
draft report detailing identified gaps and overlaps is                                                                          
currently in the process of finalization.                                                                                       
9:20:22 AM                                                                                                                    
Senator Huggins commented about the creation of a project                                                                       
without a purpose. Ms. Simons explained that the gap                                                                            
analysis will provide information regarding the necessary                                                                       
Ms. Simons detailed RN 45270 for information technology                                                                         
infrastructure upgrades. The request equals $215 thousand                                                                       
in general funds to purchase network storage and backup                                                                         
equipment to increase storage capabilities and bring data                                                                       
security and disaster recovery capabilities up to                                                                               
standards. The ever increasing use of digital images has                                                                        
pushed the current network storage and backup system in the                                                                     
Juneau office to its limit. The funds will also be used to                                                                      
purchase equipment for the provision of wireless                                                                                
connections in DNR's office buildings.                                                                                          
Ms. Simons detailed RN 49203 for foothills oil and gas                                                                          
development infrastructure investigations Phase 1 of 3. The                                                                     
FY11 request is for $370 thousand. The project will provide                                                                     
critical data for judging the feasibility of state and                                                                          
federal infrastructure investments to access undeveloped                                                                        
and undiscovered oil and gas in the central North Slope                                                                         
foothills. The data will be used to help predict the                                                                            
resource potential of these sparsely explored areas and to                                                                      
identify potential geologic hazards and construction                                                                            
material sites along the proposed routes. This area has the                                                                     
potential of generating significant oil and gas revenue                                                                         
over the next thirty years as part of the roads to                                                                              
resources program related to the highway project to                                                                             
construct a road from Dalton Highway to Umiat. With this                                                                        
study, the state can potentially gain a wealth of knowledge                                                                     
regarding the locations, volumes, reservoir                                                                                     
characteristics, economic strengths and challenges, and                                                                         
environmental sensitivities associated with the gas and oil                                                                     
resources in the area.                                                                                                          
Co-Chair Stedman recalled recent presentations from DOT                                                                         
regarding the roads to resources program. He asked why the                                                                      
item was in the capital budget versus the roads to                                                                              
resources program. Ms. Simons responded that she was                                                                            
unaware of the reasons for the placement of the project in                                                                      
the capital budget.                                                                                                             
9:24:15 AM                                                                                                                    
Ms. Simons detailed RN 37762 and the cooperative water                                                                          
resource program for a funding request of $370 thousand in                                                                      
authorization for statutory designated program receipts.                                                                        
She explained that DNR accepts funds from the private                                                                           
sector and local governments and passes the funds through                                                                       
to the federal government as part of a funding agreement                                                                        
for cooperative water resource programs. The funding pays                                                                       
for equipment to obtain hydrologic data. Funding is also                                                                        
passed to (DFG) for the same purpose.                                                                                           
Ms. Simons addressed RN 49201 for statewide timber                                                                              
inventories. The funding request is for $215 thousand. She                                                                      
explained that demands on state forest lands are increasing                                                                     
from timber sale activity, firewood harvest, and potential                                                                      
alternative energy development. Timber inventories                                                                              
determine sustainable harvest levels and provide data for                                                                       
planning and defending timber sales. Funding will primarily                                                                     
be used for aerial photography, satellite imagery, and                                                                          
field work helicopter time.                                                                                                     
Co-Chair Stedman asked for the history of timber inventory                                                                      
analysis. Ms. Simons responded that the most recent                                                                             
inventory is from FY08 in the Valley State Forest, but a                                                                        
more recent inventory is necessary. Co-Chair Stedman                                                                            
believed that a timber cruise is long standing.                                                                                 
9:27:19 AM                                                                                                                    
Ms. Simons noted RN 38886 and the land sales-new                                                                                
subdivision development. The request is $3.6 million in the                                                                     
land disposal income fund. She mentioned that ongoing use                                                                       
of the land disposal income fund is used to propose,                                                                            
design, develop, survey and build roads for new subdivision                                                                     
sales of state land typical of similar CIP requests for the                                                                     
same purpose.                                                                                                                   
Co-Chair Stedman asked for further detail regarding the                                                                         
request for $3.6 million. Ms. Simons understood that the                                                                        
funding will pay for land surveys, road construction,                                                                           
appraisals, clean up and other development costs along with                                                                     
the necessary staff.                                                                                                            
Co-Chair Stedman asked about the item's place in the                                                                            
operating budget versus the capital budget. He recognized                                                                       
the forecast for the project expands to FY16 and beyond.                                                                        
Ms. Simons understood that the nature of the project is                                                                         
land development. She pointed out that land development                                                                         
typically exists in the capital budget.                                                                                         
Co-Chair Hoffman asked how locations are selected.                                                                              
MARTY PARSONS, DEPUTY DIRECTOR, DIVISION OF MINING LAND AND                                                                     
WATER, DEPARTMENT OF NATURAL RESOURCES (via teleconference)                                                                     
explained that the selection of land sale subdivision sites                                                                     
is an ongoing process where staff review land by area plans                                                                     
deemed suitable for settlement. A list of projects is                                                                           
maintained to meet the legislative designated requirements.                                                                     
Co-Chair Hoffman asked about land available in Western                                                                          
Alaska. Mr. Parsons offered to research the topic. Senator                                                                      
Olson requested the information as well. Co-Chair Stedman                                                                       
offered to receive the information for dispersal among                                                                          
committee members.                                                                                                              
9:32:08 AM                                                                                                                    
Ms. Simons detailed RN 49195 and the land sale web                                                                              
enhancement. The funding request for $68,000 in general                                                                         
funds will provide a more interactive public interface to                                                                       
the state land sale website. The upgrade allows the public                                                                      
to identify projects in development, use geographic                                                                             
information system tools to find land available for sale,                                                                       
search for parcels with a wide range of criteria, and                                                                           
provide links to parcel survey. The web site is expected to                                                                     
increase the volume of land sales on the greater than 1500                                                                      
state parcels currently available.                                                                                              
Ms. Simons addressed RN 34881 and the forest legacy federal                                                                     
grant program. The funding request is for $1 million in                                                                         
federal funds. The forest legacy program provides federal                                                                       
funding for acquisition of high value private forest land                                                                       
threatened with conversion to non forest use. The program                                                                       
targets private lands adjacent to or within existing                                                                            
conservation units such as parks and refuges. The funding                                                                       
will be used to acquire two forested in-holdings totaling                                                                       
307 acres within Denali State Park. The purchase will                                                                           
conserve forested habitats and natural features and ensure                                                                      
uninterrupted views just below the proposed south Denali                                                                        
visitor's center.                                                                                                               
Co-Chair Stedman asked if the parcels have been appraised.                                                                      
Ms. Simons concurred that the conservation fund ordered an                                                                      
appraisal done on the parcels.                                                                                                  
Co-Chair Stedman asked if the funding request would cover                                                                       
the cost of both purchases. Ms. Simons responded that she                                                                       
was not aware of other funding sources. Co-Chair Stedman                                                                        
asked the department to provide the information to the                                                                          
9:34:40 AM                                                                                                                    
Senator Huggins asked about the farm land maintenance                                                                           
program. He asked about a matching fund. Ms. Simons did not                                                                     
know about a matching fund for the farm land program.                                                                           
Ms. Simons addressed RH 37769 for the forest legacy federal                                                                     
grant program. The request is for $ 1 million in federal                                                                        
funds and $800 thousand in statutory designated program                                                                         
receipts. Statewide projects funded though this                                                                                 
consolidated grant include hazardous fuels reduction, fire                                                                      
wise education, fire prevention, community wildlife                                                                             
protection planning, identification of invasive insect                                                                          
species,  forest thinning and planting projects on state                                                                        
forest land. Funds are also used to provide technical                                                                           
assistance to other forest land owners including native                                                                         
corporations in support of their planning efforts. This CIP                                                                     
request represents the portion of the grant that is                                                                             
competitive and used largely for contractual services for                                                                       
hazard fuel mitigation.                                                                                                         
Co-Chair Hoffman asked if the amount is typical for a                                                                           
project of this nature. He asked how the travel funding                                                                         
request was spent. Ms. Simons assumed that the funding was                                                                      
used for staff travel to provide services. Co-Chair Stedman                                                                     
asked Ms. Simons to return to the committee with further                                                                        
9:37:36 AM                                                                                                                    
Ms. Simons explained RN 6865 for the national historic                                                                          
preservation fund federal grant program. She stated that                                                                        
the request was for $1 million in federal funds and $200                                                                        
thousand in general fund match. The objective of the                                                                            
program is to preserve Alaska's cultural resources and the                                                                      
funds are used primarily to support the archeologists,                                                                          
historians and other staff in the state's office of history                                                                     
and archeology. Funds are also used for pass through grants                                                                     
for local governments and other organizations.                                                                                  
Ms. Simons detailed RN 6855 for federal funding for                                                                             
abandoned mine lands reclamation federal program. The                                                                           
amount of authorization requested is $3,575,000. She noted                                                                      
that the program provides federal funding for reclamation                                                                       
of areas mined before enactment of the Federal Surface                                                                          
Mining Control and Reclamation Act of 1977. Work is                                                                             
performed via contract with contractors employing                                                                               
approximately 25-35 seasonal workers. Since inception, the                                                                      
program identified 16 coal sights and 124 non coal sights                                                                       
requiring reclamation at a cost of $42 million. Another                                                                         
$37-45 million in work is expected to be identified before                                                                      
the end of the program.                                                                                                         
Co-Chair Stedman asked if the reclamation project was                                                                           
exclusive to coal or was hard rock mining included. Ms.                                                                         
Simons stated that the project included coal and non coal                                                                       
sights, but she did not have specifics on the non coal                                                                          
sights. She offered to provide additional information. Co-                                                                      
Chair Stedman asked if the Douglas Harbor expansion in                                                                          
Juneau might qualify to aid in the cost of removal of the                                                                       
tailings observed in possible harbor expansion.                                                                                 
Co-Chair Hoffman noted that past appropriations have not                                                                        
yet been spent. Ms. Simons agreed to provide additional                                                                         
information. She informed that the request is for                                                                               
authorization to receive funding.                                                                                               
9:40:47 AM                                                                                                                    
Ms. Simons detailed RN 40082 and the request for the Alaska                                                                     
Coastal Management federal pass through grants. She noted                                                                       
that the program request for FY11 is $1.36 million of                                                                           
federal authorization to receive the funding. The annual                                                                        
grant from NOAH provides pass through funds to state                                                                            
agencies, coastal districts and other grant recipients for                                                                      
the Alaska Coastal Management Program.                                                                                          
Ms. Simons detailed RN 6854 for the national recreation                                                                         
trails grant federal program. The request is for $2 million                                                                     
in authorization of federal funds. These funds are passed                                                                       
through to organizations, agencies and local governments as                                                                     
grants for recreational trail development and maintenance.                                                                      
Recent grantees include the North West Arctic Borough,                                                                          
Homer Soil and Water Conservation District, Kuskokwim Race                                                                      
Committee, Copper Center Development Association, Hollis                                                                        
City Council, City of Bethel, Sitka Trail Works, MatSu                                                                          
Borough Trails Council, Interior Alaska Land Trust, and                                                                         
Friends of Eagle River Nature Center.                                                                                           
Ms. Simons described RN 39042 for ongoing federal funding                                                                       
national coastal wetland grant. The funding is specifically                                                                     
for Campbell Creek Estuary. The request is for $1 million                                                                       
in federal funds to pass through to the municipality of                                                                         
Anchorage. The grant was submitted by the municipality of                                                                       
Anchorage and the Great Land Trust through DNR to the                                                                           
United States Fish and Wildlife Service National Coastal                                                                        
Wetlands program. This acquisition will protect sensitive                                                                       
coastal wetlands as well as Campbell Creek itself.                                                                              
Ms. Simons detailed RN 32552 for continuing federal funding                                                                     
for the land and water conservation fund federal grant                                                                          
program. The request is for $600 thousand in federal                                                                            
authorization. The program provides funds for development                                                                       
of outdoor recreation areas. Most of the funds are passed                                                                       
through to cities and boroughs and have been used for ball                                                                      
fields, trails, ski areas, swimming pools, play grounds,                                                                        
parks, and approximately 400 projects throughout the state                                                                      
since the mid 1960s. This is a matching program where local                                                                     
governments provide their share of the match and the state                                                                      
provides match to the existing CIP grants for deferred                                                                          
maintenance in state parks.                                                                                                     
Ms. Simons described RN 33690 for the snowmobile trail                                                                          
development and program grants. The request is for $250                                                                         
thousand in vehicle registration receipts. Seventy percent                                                                      
of the funds are spent for direct grants to various                                                                             
organizations and agencies for trail and trailhead                                                                              
development, seventeen percent for education, and fourteen                                                                      
percent for grant administration and support of the                                                                             
statewide snowmobile trails advisory committee.                                                                                 
Ms. Simons described RN 40474 and the mental health trust                                                                       
land facilities maintenance. The funding request is for                                                                         
$350 thousand in mental health trust authority funds for                                                                        
maintenance of their real estate facility.                                                                                      
9:45:00 AM                                                                                                                    
Ms. Simons noted that the remaining items on the list are                                                                       
addressed in the deferred maintenance budget.                                                                                   
Senator Thomas asked about RN 33690 and the licensing fees.                                                                     
He asked to know the amount of revenue from licensing fees                                                                      
on an annual basis. He asked about the additional revenue                                                                       
unused for this endeavor.                                                                                                       
JAMES KING, DIRECTOR, DIVISION OF PARKS AND RECREATION (via                                                                     
teleconference) responded that the snowmobile registration                                                                      
fees are collected by the Department of Motor Vehicles                                                                          
(DMV). The remainder of the fees is allocated to snow                                                                           
grooming and trail maintenance.                                                                                                 
Senator Thomas asked about the DOT's involvement with DOR                                                                       
regarding the Roads to Resources program. He hoped that                                                                         
that the existence of resources is proven prior to the                                                                          
mapping project. Ms. Simons agreed that the project                                                                             
required more information prior to further investment in                                                                        
the area.                                                                                                                       
Senator Egan asked about DNR's proposal to increase the                                                                         
snowmobile registration fees from $5 to $20. He asked if                                                                        
public hearings occurred. Ms. Simons responded that the fee                                                                     
increase was proposed by the snowmobilers as the program                                                                        
provides trail improvement.                                                                                                     
Senator Egan asked if the funds are dispersed by region.                                                                        
9:49:32 AM                                                                                                                    
Director King stated that there is a snow track board                                                                           
representing the different regions. The advice is to                                                                            
administer funds to the different regions. The board                                                                            
insists on fair representation based on registration fees.                                                                      
The snowmobilers have recognized the incredible difference                                                                      
with the snow grooming program and the creation of new                                                                          
Co-Chair Hoffman asked if citizens in western Alaska are                                                                        
required to pay the fee. He doubted that a grooming program                                                                     
exists in western Alaska. Mr. King replied that all snow                                                                        
machines must be registered at the point of sale. He noted                                                                      
that grants have been awarded to rural Alaska in trail                                                                          
marking programs. Co-Chair Hoffman asked how the grants are                                                                     
9:52:12 AM                                                                                                                    
Senator Olson asked for written documentation that                                                                              
illustrate that snow machine users are requesting the fee                                                                       
increase. Mr. King responded that the division has not                                                                          
requested an increase in the registration fee. The                                                                              
initiation is a grassroots effort from the Alaska Snow                                                                          
machine Association and the Snow Track Board. Senator Olson                                                                     
noted sensitivity to the subject in western Alaska. He                                                                          
asked for documentation of the request. Mr. King offered to                                                                     
provide a report.                                                                                                               
Senator Olson asked about citation fees and the revenues                                                                        
generated. Director King offered to return to the committee                                                                     
with the information. He explained that the revenue is                                                                          
placed directly into the general fund.                                                                                          
Senator Huggins assumed that most people do not want a fee.                                                                     
He was supportive of trails but disagreed with the method                                                                       
of taxation.                                                                                                                    
Mr. King responded that organized groups are located in the                                                                     
MatSu valley where modern tracks and grooming are                                                                               
appreciated. He agreed that other areas in the state are                                                                        
not influenced by the registration fees.                                                                                        
9:56:30 AM     AT EASE                                                                                                        
9:57:35 AM     RECONVENED                                                                                                     
         Department of Environmental Conservation                                                                             
MIKE MAHER, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,                                                                      
DEPARTMENT OF REVENUE, introduced himself and the initial                                                                       
deferred maintenance projects.                                                                                                  
KRISTIN RYAN, DIRECTOR, DIVISION OF ENVIRONMENTAL HEALTH,                                                                       
DEPARTMENT OF ENVIRONMENTAL CONSERVATION (via                                                                                   
teleconference) referred to RN 49339 designated to correct                                                                      
deficiencies discovered in the environmental health                                                                             
laboratory in the bio safety level three lab section, which                                                                     
is intended to handle dangerous contaminants that place                                                                         
staff at risk. She noted the importance of the ventilation                                                                      
work and the adequate sealing of the system.                                                                                    
Senator Olson asked if there have been any ill effects from                                                                     
the deficiency. Ms. Ryan stated that many contaminants                                                                          
cannot be handled in the lab.                                                                                                   
Senator Olson asked if the concern regards pathogens versus                                                                     
contaminants. Ms. Ryan agreed that the risky agents were                                                                        
botulism, E. coli, and anthrax.                                                                                                 
10:00:10 AM    AT EASE                                                                                                        
10:00:43 AM    RECONVENED                                                                                                     
Co-Chair Hoffman requested a brief description of the                                                                           
Village Safe Water Program.                                                                                                     
BILL GRIFFITH, FACILITIES PROGRAM MANAGER, DIVISION OF                                                                          
WATER, pointed out that federal funds have been declining                                                                       
while the cost to address the sewer and water in rural                                                                          
Alaska escalates. He noted that funding from all sources                                                                        
including national tribal allocations, Alaska specific                                                                          
appropriations and required state match for rural Alaska                                                                        
sanitation projects has declined by approximately $50                                                                           
million over the past seven years. The overall decline is                                                                       
due to extreme reductions in Alaska's Pacific federal                                                                           
appropriations and the associated state match which have                                                                        
plummeted by $57 million over the same seven years.                                                                             
Although the American Recovery and Reinvestment Act (ARRA)                                                                      
provided some relief in FY10, the FY11 budget represents                                                                        
the lowest funding levels for rural Alaska water and sewer                                                                      
projects in over ten years leading to a $41 million                                                                             
decrease in last year's appropriation. The program                                                                              
established a multiyear priority list. The list includes                                                                        
projects that have an approved facility master plan, but                                                                        
will require multiple years to complete design and                                                                              
construction. Projects are added to the list when                                                                               
communities submit applications that received high overall                                                                      
scores. Scoring is based on critical health related needs                                                                       
and local capacity to operate and maintain existing                                                                             
facilities. The purpose of the multiyear list is to                                                                             
identify funding needs and ensure that new appropriations                                                                       
will be obligated and expended in a timely manner. This                                                                         
year's CIP request includes $37.7 million to partially fund                                                                     
56 projects on a multiyear priority list. This request is                                                                       
approximately eleven percent of the total estimated cost                                                                        
needed to complete the projects on the list. The CIP                                                                            
requested amount is computed using federal funds made                                                                           
available next fiscal year along with the required state                                                                        
match. Additional language is included in the budget so                                                                         
that multiyear projects will receive funding on a first                                                                         
come first serve basis. He stressed the need for capital                                                                        
funds. Assistance is needed to upgrade or replace existing                                                                      
systems that are posing a substantial health threat.                                                                            
Examples include new water storage tanks to meet the needs                                                                      
of growing populations, water treatment plant renovations                                                                       
to address new drinking water regulations, replacement of                                                                       
thirty year old water and sewer mainlines, and sewage                                                                           
lagoon renovations including liners to prevent seepage into                                                                     
ground water. Currently, the sanitation needs in rural                                                                          
Alaska total over $830 million and of this amount, 43                                                                           
percent is needed to provide first time service, 44 percent                                                                     
is needed to address potential health threats and 13                                                                            
percent is required to address minor health threats. The                                                                        
department's CIP process dismisses needs to address minor                                                                       
health threats as secondary. Funding requests are made for                                                                      
projects that will address substantial health threats or                                                                        
provide first time service. Future distribution will shift                                                                      
toward critical health needs.                                                                                                   
10:06:48 AM                                                                                                                   
Senator Thomas asked if the projects are bundled to gain an                                                                     
economy of scale. He asked if equipment was prescribed                                                                          
based on the experience of pumps and tanks bid by                                                                               
contractors. Mr. Griffith stated that the vast majority of                                                                      
the projects are completed through the use of local force                                                                       
account labor using a contracted consulting construction                                                                        
management firm. He explained that the work was completed                                                                       
one community at a time. He pointed out that pumping                                                                            
systems have been standardized throughout the state. Use of                                                                     
pumps and pumping equipment are specific to location.                                                                           
10:08:59 AM                                                                                                                   
Senator Huggins asked about the community of Talkeetna and                                                                      
their problems with water and sewer treatment. Mr. Griffith                                                                     
responded that Talkeetna is part of the MatSu borough and                                                                       
therefore ineligible for funding under the Village Safe                                                                         
Water Statute, but does receive funding from the municipal                                                                      
matching grant and loan program. Both grants and loans have                                                                     
been provided through the program for upgrade of the water                                                                      
and sewer facilities.                                                                                                           
Senator Huggins asked for further information about the                                                                         
grants. Mr. Griffith agreed to provide the information.                                                                         
Senator Olson asked about the requests about the village of                                                                     
Kipnuk. The village, whose sewage lagoon was at capacity                                                                        
and frozen, used a chainsaw to relocate sewage. He asked to                                                                     
know the plan for a community already fraught with issues                                                                       
such as hepatitis.                                                                                                              
Mr. Griffith shared the concern with regard to the village                                                                      
of Kipnuk. The Village Safe Water Statute currently                                                                             
specifies eligible communities. Kipnuk's population                                                                             
recently exceeded 600 people making them ineligible for the                                                                     
safe water fund, which is a significant concern. Funding                                                                        
through the Indian Health Service remains an option.                                                                            
10:12:39 AM                                                                                                                   
Senator Olson stressed that a possible epidemic may be the                                                                      
result. Mr. Griffith responded that an update of the                                                                            
statute is in order. Several rural communities have                                                                             
exceeded a population of 600.                                                                                                   
Senator Olson asked what the department is doing to help                                                                        
the community with its growing population.                                                                                      
Mr. Griffith noted that the department provides assistance                                                                      
to the community's rural and sewer operators through the                                                                        
remote maintenance worker program. Training assistance to                                                                       
the operators is provided.                                                                                                      
Co-Chair Hoffman noted that the school is adequate in                                                                           
structure, yet the population of the school has doubled                                                                         
necessitating an increase in water and sewage facilities.                                                                       
He asked the department to consider additional revenues.                                                                        
10:15:37 AM    AT EASE                                                                                                        
10:17:46 AM    RECONVENED                                                                                                     
Mr. Griffith discussed RN 46714 and the municipal water                                                                         
sewage and solid waste facilities matching grant program.                                                                       
He noted that the appropriation totals $23,189,396 and                                                                          
consists of 12 separate allocations for individual projects                                                                     
to be funded with state general funds. The projects are                                                                         
municipal matching grant projects and a portion of the                                                                          
costs are paid by grant recipients consisting of larger                                                                         
cities throughout the state.                                                                                                    
10:20:31 AM                                                                                                                   
Co-Chair Hoffman asked about RN 33826.                                                                                          
LARRY DIETRICK, ALASKA DIVISION ENVIRONMENTAL CONSERVATION                                                                      
(via teleconference) addressed RN 33826 for state wide                                                                          
contaminated site cleanup. The request funds the assessment                                                                     
and clean up of the highest priority state owned sites and                                                                      
sites where the responsible party is unknown or has refused                                                                     
to take appropriate action. The request involves no new                                                                         
additional staff.                                                                                                               
Mr. Maher introduced RN 37756 for the environmental                                                                             
monitoring and assessment program.                                                                                              
LYNN KENT, DIRECTOR ENVIRONMENTAL CONSERVATION (via                                                                             
teleconference), addressed RN 37756. She explained that                                                                         
under the Federal Clean Water Act, states are required to                                                                       
assess and report on the health of their water resources.                                                                       
The Environmental Protection Agency (EPA) has been                                                                              
providing 100 percent federal funds for the effort. The                                                                         
FY11 capital request is for $450 thousand in federal                                                                            
receipt authority. The national goal is to assess all                                                                           
waters on a five year rotational cycle, but with Alaska's                                                                       
vast water resources, the department is in the process of                                                                       
conducting the first round of water quality monitoring.                                                                         
This funding will be focused on the arctic coastal plain                                                                        
region of the state.                                                                                                            
Senator Huggins noted that Big Lake in MatSu has                                                                                
environmental challenges. He asked about Big Lake and its                                                                       
place in the cycle of evaluation and cleanup. Ms. Kent                                                                          
responded that water problems are associated with petroleum                                                                     
in Big Lake according to recent monitoring. She stated that                                                                     
the monitoring effort will continue. The department is                                                                          
working with the MatSu borough to reduce the contaminants                                                                       
entering the lake.                                                                                                              
Senator Thomas asked about RN 33826. He requested a brief                                                                       
explanation of the appropriation. He wondered about a                                                                           
particular project in the North Star Borough.  Mr. Dietrick                                                                     
offered to scan the list and provide the committee with                                                                         
                Department of Fish and Game                                                                                   
10:26:59 AM                                                                                                                   
Co-Chair Hoffman continued with deferred maintenance for                                                                        
the Department of Fish and Game.                                                                                                
TOM LAWSON, DIRECTOR, ADMINISTRATIVE SERVICES, DEPARTMENT                                                                       
OF FISH AND GAME noted RN 49368 and the $650 thousand                                                                           
general fund appropriation for the Kodiak warehouse                                                                             
compound upgrades. The structure of the warehouse is                                                                            
intact, but the siding and roofing are in need of upgrades.                                                                     
Mr. Lawson continued with RN 49672 and the Fairbanks                                                                            
Regional Office repairs/upgrades for $450 thousand in                                                                           
general funds. He explained that the project will provide                                                                       
miscellaneous repairs and upgrades of the Fairbanks                                                                             
Regional Office compound. He explained that the access                                                                          
roads, parking lots, and sidewalks around the compound                                                                          
require paving. He added that energy lighting, painting,                                                                        
and carpet/flooring installation are also required.                                                                             
Mr. Lawson addressed RN 49669 for the Yakutat compound                                                                          
electrical repairs and upgrades. He explained that the                                                                          
appropriation is for $100 thousand in general fund to                                                                           
upgrade the electrical service for the compound.                                                                                
Mr. Lawson referenced RN 49670 for the statewide boiler and                                                                     
heating system upgrades for $275 thousand of general funds.                                                                     
The project will replace and upgrade existing boilers and                                                                       
heating system for increased energy efficiency for Nome,                                                                        
Cordova, Palmer, and Bethel.                                                                                                    
Mr. Lawson addressed RN 49667 and the statewide access,                                                                         
parking and drainage repairs and upgrades. He stated that                                                                       
the funding request was for $275 thousand in general funds.                                                                     
This project will repair, improve, and upgrade road access                                                                      
parking and drainage systems at various field offices and                                                                       
compounds in King Salmon, Glennallen, Delta Junction,                                                                           
Haines, Kodiak, Yakutat, Soldotna, and Dillingham.                                                                              
Mr. Lawson noted RN 49671 and the statewide bunkhouse                                                                           
repairs upgrades for $250 thousand. These bunkhouses exist                                                                      
in Bethel, Nome, Cold Bay, King Salmon, Dillingham, Kodiak,                                                                     
and Cordova.                                                                                                                    
10:31:46 AM                                                                                                                   
Mr. Lawson noted that the projects will be contracted and                                                                       
could occur this field season.                                                                                                  
Co-Chair Stedman concluded the deferred maintenance                                                                             
projects for the Department of Fish and Game. He continued                                                                      
with the department's capital projects.                                                                                         
Mr. Lawson began with the capital projects and RN 43322 and                                                                     
the facilities, vessels and aircraft maintenance repair and                                                                     
upgrades. He noted that the project divides the funding                                                                         
request of $700,000 among various buildings, fishery vessel                                                                     
maintenance, and aircraft maintenance. He explained that                                                                        
the repairs and maintenance are typically accomplished with                                                                     
seasonal staff.                                                                                                                 
Co-Chair Stedman asked about ongoing amounts of the                                                                             
maintenance. Mr. Lawson responded that the estimate is for                                                                      
$3.9 million worth of future projects, but due to the small                                                                     
size of the staff, projects are staggered. The goal is to                                                                       
budget for the potential amount of work done in one year.                                                                       
If the deferred maintenance projects are funded, the                                                                            
workload will be higher this year.                                                                                              
Mr. Lawson continued with RN 49047 with a funding request                                                                       
of $100,000 for crew member fisheries participation                                                                             
database development. This is a pilot project focused in                                                                        
Southwest Alaska to gather information on crew members                                                                          
involved in various commercial fisheries.                                                                                       
Mr. Lawson described RN 42050 for genetic marker screening                                                                      
for estimating the stock composition of Western Alaska's                                                                        
Salmon Fisheries. The funding request is $750 thousand in                                                                       
general funds.                                                                                                                  
Mr. Lawson reviewed RN 48912 for $200,000 for Yukon River                                                                       
chum salmon aerial surveys. The project spans four years                                                                        
and will conduct intensive aerial surveys of summer chum                                                                        
salmon spawning streams in the middle and lower Yukon River                                                                     
drainage. He stated that geographic shifts in the lower                                                                         
river affect the stocks necessitating management changes.                                                                       
Co-Chair Stedman asked about intensive aerial surveys.                                                                          
10:37:38 AM                                                                                                                   
JOHN HILSINGER, DIRECTOR, DIVISION OF COMMERCIAL FISH                                                                           
explained that a low level aerial survey allows trained                                                                         
observers to fly multiple surveys over streams to acquire                                                                       
an estimate of the abundance of spawning salmon.                                                                                
Mr. Lawson referenced RN 41514 for assessment and                                                                               
feasibility of pilot station sonar. The funding request is                                                                      
$250 thousand in general funds. The study spans two years                                                                       
for a pilot station area to assess the sonar program                                                                            
operations and conduct intensive surveys of the lower Yukon                                                                     
Mr. Lawson continued with RN 43347 for the Endangered                                                                           
Species Act listed marine mammal research. The request is                                                                       
for $600 thousand including $450 thousand of federal                                                                            
receipt and $150 thousand of general fund match. The                                                                            
project would leverage federal grant opportunities to                                                                           
conduct research for expansion of the state's knowledge                                                                         
base of endangered marine mammals.                                                                                              
Mr. Lawson detailed RN 48947 for state contracted hatchery                                                                      
facilities inspection with a funding request of $150                                                                            
thousand in general fund. The project was in the governor's                                                                     
amended version of the budget. The purpose is to perform an                                                                     
assessment of the state owned hatcheries to ensure that the                                                                     
contractors are in compliance with the contractual                                                                              
maintenance terms and to seek out options to transfer                                                                           
ownership if acceptable to all parties.                                                                                         
10:40:43 AM                                                                                                                   
Mr. Lawson referenced RN 33647 for the pacific coastal                                                                          
salmon recovery fund. The funding request is $15 million of                                                                     
federal receipt authority. The state receives annual                                                                            
federal appropriations for the program. The funding arrives                                                                     
through a memorandum of understanding with the United                                                                           
States Department of Commerce.                                                                                                  
Mr. Lawson addressed RN 48948 for the Pacific Salmon Treaty                                                                     
Chinook fishery mitigation project for $7.5 million of                                                                          
federal receipt authority. The federal budget for state                                                                         
FY11 includes $7.5 million of funding to mitigate the                                                                           
economic consequences of harvest reductions imposed by the                                                                      
Pacific Salmon Treaty in Southeast Alaska.                                                                                      
Co-Chair Hoffman asked about RN 33647 and the dialog with                                                                       
the executive branch regarding the application. Mr. Lawson                                                                      
agreed to return to the committee with further information.                                                                     
The decision could be made this week.                                                                                           
Co-Chair Stedman asked the plan for the mitigation funds.                                                                       
Mr. Lawson responded that a stakeholder's panel will meet                                                                       
this week to recommend an explanation for the utilization                                                                       
and allocation of the money. Co-Chair Stedman asked the                                                                         
proposed format of the explanation. Mr. Lawson understood                                                                       
that a portion of the funding will be allocated to                                                                              
commerce. He offered to return to the committee with                                                                            
further information.                                                                                                            
Mr. Lawson described RN 30432 for the sport fish                                                                                
recreational boating access program. The funding request is                                                                     
for $3.1 million, $2.3 million of which is federal receipt                                                                      
authority and $775 from the fish and game fund. The annual                                                                      
portion from the federal government is used to construct                                                                        
and upgrade boating and sport fish access sites. Co-Chair                                                                       
Stedman asked if the list of sites could be presented to                                                                        
the committee. He also asked for targets of this year's                                                                         
10:47:30 AM                                                                                                                   
Mr. Lawson continued with RN 48917 and the economic                                                                             
contribution of wildlife to Alaska. The funding request was                                                                     
$500 thousand with $375 thousand of federal receipt                                                                             
authority and $125 thousand of fish and game funds. The                                                                         
goal of the project is documentation of the economic                                                                            
contribution or significance of hunting and wildlife                                                                            
viewing within the state.                                                                                                       
Senator Huggins noted the term "sustained yield" and                                                                            
"abundance management." He expressed interest in the trend                                                                      
lines for wildlife population and the efforts regarding the                                                                     
mentioned terms.                                                                                                                
10:48:55 AM                                                                                                                   
Mr. Lawson described RN 47021 for cooperative resource                                                                          
program. The funding request is $455 thousand of statutory                                                                      
designated program receipts. This project allows fish and                                                                       
game to accept funds from the private sector and local                                                                          
governments to leverage money from the federal government                                                                       
and obtain hydrological data.                                                                                                   
SB 230 was HEARD and HELD in Committee for further                                                                              
SB 253 was HEARD and HELD in Committee for further                                                                              
10:49:44 AM                                                                                                                   
The meeting was adjourned at 10:49 AM.                                                                                          

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