Legislature(2019 - 2020)SENATE FINANCE 532

02/21/2019 09:00 AM FINANCE

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Audio Topic
09:01:51 AM Start
09:07:21 AM SB20
10:25:32 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
+ Departmental Review Continued: TELECONFERENCED
<Items Below Added to Agenda>
- Fish & Game
- Natural Resources
- Environmental Conservation
+ Bills Previously Heard/Scheduled TELECONFERENCED
<Items Below Removed from Agenda>
- Labor & Workforce Development
- Administration
- Commerce, Community & Economic Development
- Governor
SENATE BILL NO. 20                                                                                                            
     "An  Act making  appropriations for  the operating  and                                                                    
     loan  program  expenses  of state  government  and  for                                                                    
     certain   programs;    capitalizing   funds;   amending                                                                    
     appropriations;  making appropriations  under art.  IX,                                                                    
     sec. 17(c),  Constitution of the State  of Alaska, from                                                                    
     the constitutional  budget reserve fund;  and providing                                                                    
     for an effective date."                                                                                                    
9:07:21 AM                                                                                                                    
DONNA  ARDUIN, DIRECTOR,  OFFICE OF  MANAGEMENT AND  BUDGET,                                                                    
discussed  the presentation,  "State  of  Alaska; Office  of                                                                    
Management and  Budget; FY  2020 Governor's  Amended Budget;                                                                    
Presentation to  the Senate Finance Committee;  February 21,                                                                    
2019; Director Donna Arduin" (copy on file).                                                                                    
SAMANTHA    GATTON,   ADMINISTRATIVE    SERVICES   DIRECTOR,                                                                    
DEPARTMENT OF FISH AND GAME  (DFG), OFFICE OF MANAGEMENT and                                                                    
BUDGET, looked  at slide 3,  "FY 2020 Budget:  Department of                                                                    
Fish and Game."                                                                                                                 
Co-Chair  Stedman asked  for  definitions  about the  budget                                                                    
Ms. Gatton replied with those  definitions. She continued to                                                                    
discuss slide 3.                                                                                                                
9:10:43 AM                                                                                                                    
Ms. Gatton  addressed slide 4,  "FY 2020  Budget: Department                                                                    
of Fish and Game":                                                                                                              
     Remove  projects funding  with  Charter Revolving  Loan                                                                    
     funds (-$997.0 GF)                                                                                                         
     Adjust  the  Scope  of   Management  of  Special  Areas                                                                    
     Wildlife Viewing (-280.0 GF)                                                                                               
     Statewide Support - Executive  Branch 20 percent Travel                                                                    
Co-Chair Stedman  queried a definition of  a special program                                                                    
area, and its impact.                                                                                                           
Ms. Gatton  replied that  it was roughly  3000 acres  in the                                                                    
state. She used the example  of the Mendenhall Refuge or the                                                                    
Palmer   Hay  Flats.   She  noted   that  there   were  also                                                                    
sanctuaries and critical habitat areas.                                                                                         
Co-Chair Stedman queried the expected  impact in the special                                                                    
Ms. Gatton replied  that the fees collected  for the special                                                                    
areas  were deposited  into  the Fish  and  Game funds.  She                                                                    
stated  that   the  fees  were  used   to  leverage  Pittman                                                                    
Robertson and other federal funding.                                                                                            
Senator  Bishop  wondered   whether  any  Pittman  Robertson                                                                    
funding would be returned to the federal government.                                                                            
Co-Chair  Stedman   asked  for   a  definition   of  Pittman                                                                    
Robertson fund,  and any current information  on the current                                                                    
Ms. Gatton  replied that Pittman  Robertson funding  was the                                                                    
excise tax on firearms  and ammunitions. The federal Pittman                                                                    
Robertson Act was created to  provide funds to each state to                                                                    
manage animals  in their  habitats. The  funds could  not be                                                                    
diverted to other uses.                                                                                                         
9:15:46 AM                                                                                                                    
Co-Chair Stedman remarked that  the issue would be addressed                                                                    
in subcommittee.                                                                                                                
Co-Chair  von  Imhof  noted  that   the  50  percent  travel                                                                    
reduction  was in  every department.  She  wondered how  the                                                                    
travel  reduction would  decrease the  ability to  travel to                                                                    
check licenses.                                                                                                                 
Ms.  Gatton replied  that the  Department of  Fish and  Game                                                                    
(DFG) did  significant traveling.  She explained  that there                                                                    
was an  examination of how  the department organized  and or                                                                    
developed its  travel budget.  The department  believed that                                                                    
it could reduce travel budget.                                                                                                  
Senator   Hoffman  queried   the  structural   changes  were                                                                    
proposed by the  administration in the areas  of habitat and                                                                    
Ms.  Gatton   replied  that   there  were   three  full-time                                                                    
positions reduced in  the budget. She explained  that two of                                                                    
the positions were the Subsistence  Director and the Habitat                                                                    
Director.  She explained  that there  was an  examination of                                                                    
how to support  those sections and identify  how those would                                                                    
be reported to the commissioner's office.                                                                                       
Senator  Hoffman  felt that  those  questions  needed to  be                                                                    
answered before the budget request.                                                                                             
Senator  Shower stressed  that  there  was a  constitutional                                                                    
mandate  for  subsistence.  He understood  that  there  were                                                                    
positions  that  could  be eliminated,  but  felt  that  the                                                                    
subsistence position was critical to many Alaskans.                                                                             
9:20:30 AM                                                                                                                    
Senator  Olson remarked  that there  were  many phone  calls                                                                    
about  subsistence and  remarked that  losing two  directors                                                                    
were being put into personnel who already had other duties.                                                                     
Ms.  Gatton replied  that those  positions were  transferred                                                                    
out the  budget, but  there were  no duties  associated with                                                                    
those divisions that would go to OMB.                                                                                           
Senator Olson wondered who those programs would report to.                                                                      
Co-Chair Stedman stated that if  she did not know the answer                                                                    
she could report back to the committee.                                                                                         
Senator  Wielechowski  asked  whether  there  were  any  new                                                                    
positions in the department.                                                                                                    
Ms. Gatton replied in the negative.                                                                                             
Co-Chair  Stedman  noted  that there  were  hatcheries  that                                                                    
received funding from the state,  and wondered whether there                                                                    
were any changes in the budget.                                                                                                 
Ms.  Gatton  replied  in the  affirmative,  and  there  were                                                                    
projects for the hatcheries in the Capital Budget.                                                                              
Co-Chair  Stedman remarked  that the  $3.4 million  and $1.8                                                                    
million in the budget were considered capital funds.                                                                            
Ms. Gatton responded that there  was still operating budget,                                                                    
but  she  stated  that  there   would  be  additional  money                                                                    
associated with those hatcheries.                                                                                               
Co-Chair Stedman wondered whether  the shooting ranges would                                                                    
be in the budget.                                                                                                               
Ms. Gatton replied in the affirmative.                                                                                          
Senator  Wielechowski recalled  that  there was  legislation                                                                    
that  raised  the  fishing  license  fees  to  pay  for  the                                                                    
hatcheries, and wondered when that was set to expire.                                                                           
9:25:01 AM                                                                                                                    
Co-Chair   Stedman   put   historic   context   around   the                                                                    
Ms. Gatton agreed to provide that information.                                                                                  
Senator Bishop  asked that  the department  examining making                                                                    
sport fish sale from the hatcheries.                                                                                            
Co-Chair Stedman asked for a definition.                                                                                        
Senator Bishop did not want to pontificate.                                                                                     
Co-Chair Stedman wanted to understand.                                                                                          
Senator Bishop  shared that there  were individuals  who had                                                                    
applied to  the hatcheries to  purchase fish, and  have been                                                                    
denied. The department must approve  the sale. He asked that                                                                    
the department examine that new revenue.                                                                                        
Senator Wilson queried  a quantification of how  much of the                                                                    
Dingell Johnson  funds were  lost due to  the lack  of state                                                                    
matching funds in the year prior.                                                                                               
Co-Chair  Stedman felt  that the  question had  already been                                                                    
Senator  Wilson explained  that  it was  different for  fund                                                                    
Ms. Gatton agreed to provide that information.                                                                                  
Senator  Wielechowski  noted  the  transfer  of  a  division                                                                    
director to  the Governor's Office.  He requested a  list of                                                                    
all the positions that were  to be transferred out of Juneau                                                                    
to other parts of the state.                                                                                                    
Co-Chair Stedman  stated that the  request could be  for the                                                                    
OMB  director.  He also  requested  a  total employee  count                                                                    
Senator Hoffman  remarked that the budget  probably had more                                                                    
economic  impact  to  the  state  than  most  of  the  other                                                                    
departments.  He  queried  the  impact of  the  proposal  if                                                                    
implemented on the commercial  fishing industry, and whether                                                                    
the  economic  engine  would be  maintained  throughout  the                                                                    
9:30:59 AM                                                                                                                    
Ms. Gatton  replied that the  $997,000 of  removing projects                                                                    
funding  was  specifically  for  commercial  fisheries.  She                                                                    
noted that some  of the projects would not  occur, and other                                                                    
projects  would  be swapped.  There  was  an examination  of                                                                    
partnerships with other entities.                                                                                               
Senator Hoffman asked what entities  that were looked at for                                                                    
Ms. Gatton agreed to provide that information.                                                                                  
Senator  Hoffman   stated  that  the  receipts   were  given                                                                    
voluntarily. He  noted that his region  had serious concerns                                                                    
that  the  budget  would not  provide  the  financial  means                                                                    
because  of  the profits  from  their  resource may  have  a                                                                    
Senator  Micciche   felt  that  the  impact   of  sport  and                                                                    
commercial  fishing and  hunting and  he would  examine that                                                                    
Senator   Shower  wondered   whether  the   Alaska  National                                                                    
Interest  Lands Conservation  Act  (ANILCA) coordinator  was                                                                    
eliminated in the budget.                                                                                                       
Ms. Gatton replied that she did  not believe that was in the                                                                    
DFG budget.                                                                                                                     
9:36:58 AM                                                                                                                    
AT EASE                                                                                                                         
9:37:06 AM                                                                                                                    
9:37:16 AM                                                                                                                    
FABIENNE  PETER-CONTESSE, ADMINISTRATIVE  SERVICES DIRECTOR,                                                                    
DEPARTMENT OF  NATURAL RESOURCES,  OFFICE OF  MANAGEMENT and                                                                    
BUDGET,  highlighted  slide  6,   "FY  2020:  Department  of                                                                    
Natural Resources."                                                                                                             
Co-Chair   Stedman   wondered    whether   there   were   25                                                                    
terminations in the future.                                                                                                     
Ms. Peter-Contesse replied that there  were 25 people in the                                                                    
36  positions. She  furthered that,  in  addition to  those,                                                                    
there were  seven positions that  would be  transferred, but                                                                    
five  of those  were  filled positions.  She explained  that                                                                    
there was an  additional five people that  would be affected                                                                    
by the 2020 budget. She stated  that there was a total of 30                                                                    
people  that  would be  either  transferred  to a  different                                                                    
location or laid off.                                                                                                           
Co-Chair von  Imhof felt that  it was the clearest  and most                                                                    
comprehensive  presentation.  She  remarked that  the  graph                                                                    
showed  a  pattern,  and  there   were  varying  degrees  of                                                                    
explanation.  She asked  that the  graph include  totals and                                                                    
Ms.   Peter-Contesse   explained   that   there   was   more                                                                    
granularity in  the subcommittees. She felt  that presenting                                                                    
at a high level was a better use of time.                                                                                       
Co-Chair  von Imhof  felt that  she did  not want  to use  a                                                                    
Co-Chair Stedman shared that he  had been through many years                                                                    
of financial presentations.                                                                                                     
Ms. Peter-Contesse continued with her presentation.                                                                             
9:47:57 AM                                                                                                                    
AT EASE                                                                                                                         
9:48:18 AM                                                                                                                    
Ms.  Peter-Contesse  addressed  slide 7,  "FY  2020  Budget:                                                                    
Department of Natural Resources Snapshot ($ Thousands)":                                                                        
     Recorder's Office Consolidation and Efficiencies (-                                                                        
     408.0 GF and -3 PFT, -2 PPT                                                                                                
     Increase Wildland Fire Suppression Activity Base                                                                           
     Budget (+$8,00.0 GF)                                                                                                       
     Reduce Lower Priority Programs in the Division of                                                                          
     Agriculture (-$1796.0 GF and -15 PFT, -4PPT0                                                                               
     Delete Agriculture Revolving Loan (-$421.7 GF and -2                                                                       
9:54:53 AM                                                                                                                    
Ms. Peter-Contesse continued to discuss slide 7:                                                                                
     Consolidate Parks Administrative Staff (-$150.0 GF and                                                                     
     -1 PFT, -2 PPT0                                                                                                            
     Statewide Support - Executive Branch 50 percent Travel                                                                     
     Reduction (-$354.7 GF)                                                                                                     
9:55:27 AM                                                                                                                    
Co-Chair Stedman  wondered why  Anchorage was  chosen rather                                                                    
than  Juneau for  storing the  historical  documents of  the                                                                    
Ms. Peter-Contesse  replied that Anchorage had  the majority                                                                    
of  the   Recorder's  Office  footprint  and   the  physical                                                                    
Co-Chair von  Imhof noted that  there were many  more modern                                                                    
electronic documents.  She felt that the  documents could be                                                                    
stored  at  any location,  and  commended  the efforts.  She                                                                    
wondered  whether there  was significant  data storage.  She                                                                    
wondered whether  there were conversations about  the future                                                                    
of storage.                                                                                                                     
Ms.  Peter-Contesse responded  that  they  were required  to                                                                    
keep  the original  files,  which were  the  large maps  for                                                                    
municipalities.  She remarked  that  there  were many  files                                                                    
that did not have physical  files. She shared that they kept                                                                    
microfiche as a  backup, which is the  national standard for                                                                    
backing  up recorded  data. She  remarked that  there was  a                                                                    
full floor of  staff and files, which was  a major footprint                                                                    
of the first floor of the Atwood Building in Anchorage.                                                                         
Senator Micciche  wondered whether  there was  an evaluation                                                                    
of  the  cause  and  effect.  He  wanted  to  focus  on  the                                                                    
agricultural priorities.  He felt that  it was a  tough time                                                                    
to remove $3.2 million in  the state agricultural sector. He                                                                    
queried the evaluation of that effect.                                                                                          
Ms.  Peter-Contesse replied  that it  was being  considered.                                                                    
She  stressed that  it was  important  to look  at the  core                                                                    
mission of  the Department  of Natural Resources  (DNR). She                                                                    
felt that  many of the  cuts were  to good programs,  but it                                                                    
was important to consider the  state's fiscal situation, and                                                                    
whether it was the state's job to support the programs.                                                                         
10:00:20 AM                                                                                                                   
Senator Olson felt that the  private industry would not take                                                                    
up  the slack  unless there  was a  profit motive.  He asked                                                                    
whether there were private companies to pick up the slack.                                                                      
Ms. Peter-Contesse was not aware  of specific business other                                                                    
that conversations in the peony industry.                                                                                       
Senator   Wilson   wondered   whether  the   state's   lease                                                                    
agreements  in the  buildings would  be  utilized for  other                                                                    
Ms. Peter-Contesse replied that  the savings relied with the                                                                    
$408,000  reduction  did  not   include  future  lease  cost                                                                    
savings. She explained that there  were situations where the                                                                    
leases were up before the beginning  of FY 20, and there may                                                                    
be  a need  to either  buyout or  negotiate the  leases. She                                                                    
anticipated additional reductions in lease savings.                                                                             
Senator   Wilson   looked    at   the   State   Agricultural                                                                    
Veterinarian Program,  and wondered  whether the  cut risked                                                                    
any life or safety issues.                                                                                                      
Ms. Peter-Contesse  replied in  the negative.  She explained                                                                    
that  the   regulatory  requirements   of  having   a  state                                                                    
veterinarian  resided  in  the Department  of  Environmental                                                                    
Conservation (DEC), and they were continuing the program.                                                                       
Senator  Bishop   felt  that  there  would   be  a  spirited                                                                    
conversation about the Recorder's  Office, but remarked that                                                                    
the  small  miners Fairbanks  interior  would  not be  happy                                                                    
about the  move. He stressed  that not all small  miners had                                                                    
the ability to access a computer.                                                                                               
Co-Chair  von Imhof  remarked on  the broadband  capability,                                                                    
and  wondered whether  there were  conversations with  title                                                                    
companies for  the impacts. She  wondered whether  DNR could                                                                    
do a  courtesy scan for  those miners. She noted  that there                                                                    
may   be  unintended   consequences  that   with  additional                                                                    
investment in smaller areas might provide the services.                                                                         
Ms.  Peter-Contesse replied  that  there were  conversations                                                                    
and work  with title companies.  She stated that  almost all                                                                    
title  companies were  e-recording. She  noted that  DNR had                                                                    
continued  outreach to  the  Alaska  Miner's Association  to                                                                    
attempt to  reduce the impact  for those people who  did not                                                                    
have computer access.                                                                                                           
Senator  Shower echoed  Co-Chair  von  Imhof's comments  and                                                                    
thanked the presenter for their  format. He wondered whether                                                                    
the important positions had been eliminated.                                                                                    
Ms. Peter-Contesse  replied that  there was a  position that                                                                    
would not be eliminated.                                                                                                        
10:07:55 AM                                                                                                                   
JEFF  ROGERS, ADMINISTRATIVE  SERVICES DIRECTOR,  DEPARTMENT                                                                    
OF  ENVIRONMENTAL  CONSERVATION,  OFFICE OF  MANAGEMENT  and                                                                    
BUDGET, looked  at slide 9,  "FY 2020 Budget:  Department of                                                                    
Environmental Conservation."                                                                                                    
10:11:15 AM                                                                                                                   
Mr. Rogers  discussed slide 10, "FY  2020 Budget: Department                                                                    
of Environmental Conservation Snapshot ($ Thousands)":                                                                          
     Repeal Ocean Ranger Program (-$3,426.0 Other)                                                                              
     Withdraw Funding for Dairy Regulation (-$179.6 GF and                                                                      
     -1 PFT)                                                                                                                    
     Remove Economist Position (-$124.3 GF and -1 PFT)                                                                          
     Statewide Support - Executive Branch 50 percent Travel                                                                     
     Reduction (-$167.5 GF)                                                                                                     
10:16:20 AM                                                                                                                   
Senator  Bishop asked  how many  gallons of  milk the  dairy                                                                    
produced in a year.                                                                                                             
Mr. Rogers agreed to provide that information.                                                                                  
Senator Olson wondered whether  there was protection against                                                                    
antimicrobial diseases.                                                                                                         
Mr.  Rogers replied  that the  dairy  would not  be able  to                                                                    
continue operating a system of  commercial sales without the                                                                    
state operating  a dairy program under  the Pasteurized Milk                                                                    
Ordinance. He  stated that DEC  had regulations  that permit                                                                    
the distribution through cow share programs.                                                                                    
Senator Wielechowski requested a list  of the areas that the                                                                    
state had been given primacy.                                                                                                   
Mr. Rogers replied that he did  not have a list of the costs                                                                    
of   primacy  permits.   He   agreed   to  provide   further                                                                    
Co-Chair Stedman  stressed that  he would  like the  list of                                                                    
primacy  permits. He  recalled the  Potential For  Shellfish                                                                    
testing, and requested a status report on that issue.                                                                           
Mr.  Rogers replied  that there  was no  proposed action  on                                                                    
shellfish  testing in  the  FY 20  budget,  and the  program                                                                    
would continue.                                                                                                                 
Senator Micciche  requested details and plans  for the Spill                                                                    
Prevention  and Response  (SPAR) fund,  because less  than a                                                                    
penny was funded through Alaska's fuel sales.                                                                                   
Mr.  Rogers  responded  that DEC  had  worked  with  Senator                                                                    
Micciche  to engineer  a refined  fuel surcharge  that would                                                                    
fund  SPAR.  The Department  of  Revenue  made a  number  of                                                                    
oversights  in the  fiscal note,  which included  exemptions                                                                    
that require assessment.                                                                                                        
10:21:36 AM                                                                                                                   
Senator Wielechowski looked at  the Ocean Ranger Program. He                                                                    
understood  that the  cruise  ship paid  a  four dollar  per                                                                    
berth  fee. He  wondered  whether the  fees  that were  paid                                                                    
matched  the  expenses of  the  program,  or other  expended                                                                    
general funds.                                                                                                                  
Co-Chair Stedman  further wondered whether that  program was                                                                    
part of the deficit issue.                                                                                                      
Mr. Rogers replied that DEC  received four dollars per berth                                                                    
for ever  cruise ship  in Southeast  Alaska. He  stated that                                                                    
DEC  received  an  excess  of $4  million  in  Ocean  Ranger                                                                    
receipts. He stated that DEC  only had legislative authority                                                                    
to spend  approximately $3.8 million  of those  receipts. He                                                                    
stated  that of  the $3.8  million, $3.4  million funds  the                                                                    
Ocean Ranger  Program. He remarked that  previous actions by                                                                    
the  legislature  had also  diverted  a  certain portion  of                                                                    
receipts to other marine adjacent activities.                                                                                   
Co-Chair Stedman asked whether  the revenue received was DGF                                                                    
for the program.                                                                                                                
Mr.  Rogers replied  in  the negative.  He  stated that  the                                                                    
revenue was considered "other."                                                                                                 
Co-Chair  Stedman  asked  whether  the  elimination  of  the                                                                    
program helped with the deficit.                                                                                                
Mr. Rogers replied that it did not.                                                                                             
Co-Chair  Stedman  felt  that   the  legislature  needed  to                                                                    
prioritize the efforts, and felt  that there should not be a                                                                    
focus on the items that would not fix the problem.                                                                              
SB  20  was   HEARD  and  HELD  in   committee  for  further                                                                    

Document Name Date/Time Subjects
FY2020 Gov Amend Budget to SFC 2.21.19 FG DNR DEC.pdf SFIN 2/21/2019 9:00:00 AM
SB 20