Alaska Conservation Voters

Conservation Watch

Alaska Conservation Voters
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“Are they building the road already?”
--- Juneau resident Jarrod Sowa, who recently came across survey crews attempting to prep for the Juneau Road Extension. On Monday, April 24, the Senate Finance committee put a bump on the Road's funding scheme by only proposing to spend only $25 million of the $45 million Governor Murkowski requested. Hearings are scheduled all week and like all budget items, the number is subject to change.

• Budget 101

In Every Issue

• On the Move & Status Report
• New Movers
• Hot Bills
• Hearings this Week

Budget 101

For even the most seasoned of legislative experts, the budget often remains the ultimate mystery. Budget documents are often difficult to understand and the process can often be lengthy and complicated, with each line item of the budget requiring analysis and negotiation. With budget discussions coming to a head in the legislature while the Conference Committee works to resolve the differences between House and Senate versions of the budget, we thought a run down of the process and some common questions was in order.

What are the types of budget bills?
There are five types of budget bills. They include:

• Operating Budget: The plan for how funds will be distributed each year to cover the operations of ongoing state programs.
• Capital Budget: Funds used for constructing state facilities, highways, water and sewer projects. The Senate’s version of the Capital Budget this year is SB231.
• Supplemental: Creates authorization to spend additional funds over and above the current or previous year’s fiscal budget. (Used to cover shortfalls in funding.)
• Special Appropriations: Used to fund a specific, “special” item that was not included in the current year’s budget.
• Reappropriation: Changes the previous year’s authorized capital budget for a project to reallocate funds or change the purpose of a project.

What is the difference between an appropriation, an allocation and an authorization?

• Appropriation: gives statutory permission to an agency to spend funds for a stated purpose
• Allocation: this is a subunit of an appropriation; it gives guidelines for how money (the total of which would be the appropriation) will be distributed for a stated program or purpose
• Authorization: when authority is granted to an agency to receive funds from outside sources

What are the different kinds of funding sources?
Petroleum revenues account for approximately 78% of the state budget. The Department of Revenue generally prepares estimates of what these revenues will be in November and March and an overview is typically presented to the Finance Committees in both the House and the Senate. Each year’s operating budget is based on these estimates, with adjustments being made as necessary. The three funding sources that are generally cited in budget bills are:

• General Fund: the general operating fund of the state, which is used to finance the general operations of state agencies
• Federal Funds
• Other Funds: may include funding from alternative sources such as program receipts, etc.

What are the major steps in the budget process?

1. State agencies such as the Department of Transportation prepare their budgets during the late summer and fall of each year and submit them to the Governor’s Office of Budget Review. The Office of Budget Review then checks the budget requests and makes recommendations to the Governor.
2. The Governor reviews, sets budget amounts and submits the appropriation bill and budget documents to the Legislature by December 15.
3. The House and Senate introduce the budget bills, which receive their first reading on the floors and are then referred to their respective House or Senate Committees.
4. Generally, the House acts on the bill first and sends their version to the Senate, but both bodies begin work simultaneously. Subcommittees are often created to work on the budgets for individual departments and report back with their recommendations to the main Finance Committee. The Finance Committee then finalizes the budget and moves a Committee Substitute (CS) to the floor for a vote.
5. On the Floor, a bill goes to its second reading, at which time amendments can be added. The bill is then moved to the third reading, voted on, and transmitted to the other side of the body (i.e., The House will then transmit the CS to the Senate.)
6. The Senate Finance Committee then completes their own work and sends their own CS to the floor, where it can be amended and voted on. This version is then sent back to the House for concurrence, or potential agreement by the House. Generally neither side is willing to concur or recede on their own amendments, so a conference committee is appointed.
7. The conference committee works out a compromise version of the budget. The Operating Budget Conference Committee is composed of the co-chairs of each Finance Committee and a minority member from each house.
8. The CS created by the conference committee is voted on by the House and the Senate and then sent to the Governor. The Governor has 20 working days to review the bill and use his line item veto power, which allows the Governor to delete all or a portion of the budget numbers and intent language. The legislature can only override these vetoes by calling a special session.
9. The bill becomes law and goes into effect on July 1, the start of the fiscal year.

For more information on what is currently happening with the budgets, reference the end of the "On the Move" section.

For more information visit:

Glossary of Key Budget Terms

Office of the Governor, Management & Budget

Layman's Guide to the Budget Process

On the Move

Two weeks to go. The 24 hour rule is now in effect, which means that things will start to move at lightening speed as we get closer and closer to the end of the regular session. Here’s the latest news:

HCR30 Climate Impact Assessment Commission - Rep. Joule (D-Kotzebue)
Just waived from the Senate Resources Committee, this favorable House resolution is sitting in its last substantive committee - Senate Finance - in position for the end game. This will be the vehicle for any legislative climate change efforts in 2006 and is now in the hands of the gods. HCR 30 will establish a commission of 11 qualified members to build upon existing information (e.g. The Arctic Climate Impacts Assessment). They will report back to the Legislature with their assessment of the current and potential effects of climate change in Alaska and recommendations for adaptation, mitigation, and monitoring techniques that can be adopted to minimize the potential serious detrimental impacts of climate change.

Climate Change (SB 278- Olson) also addresses this critically important issue and had its second hearing in the Senate Resources Committee. It passed out with no opposition and with one change proposed by Senator Seekins that we support--the task force must be chaired by one of its legislative members. This will provide for greater accountability over the process and encourage legislative ownership of the commissions’ findings and recommendations. SB 278 also is in Senate Finance with good friend, HCR 30.

HB328 Ban Mixing Zones in Spawning Areas - Reps. Seaton (R-Homer), LeDoux (R-Kodiak), Olson (R-Soldotna) and Gatto (R-Palmer)
Another high priority, this bill would prevent a rollback as currently proposed by the Administration and codify the existing regulatory ban on mixing zones in spawning areas with some improvements. Due to unresolved concerns about its impacts on placer miners–and the lateness of the day– this bill is dead.

HB445 Alternative Energy Grant Fund - Rep. Thomas (R-Haines)
This priority bill remains stuck in House Finance and appears to be dead. Another PPT victim, time is simply too short to resolve remaining issues in the House and then get it through the Senate. It sets up a grant program within the Alaska Energy Authority for alternative energy and energy efficiency projects. The bill suggests that for each year West Coast oil prices exceed $35 per barrel the bill suggests the legislature appropriate to the und an amount equal to 10 cents per barrel of oil produced plus income earned on the fund. Grants can be up to $20 million per grantee. Grantees can be electric utilities, a government entity, or independent power producer. Grants are subject to a 25% match.

HB415 Liability for Recreational Land Use - Rep. Seaton (R-Homer)
This good House bill is now in the Senate and is scheduled for a hearing this week. It encourages recreational use of private lands by granting immunity to landowners who allow free access. This non-controversial bill is likely to pass this session.

HB307 Knik River Public Use Area - Rep. Stoltze (R-Chugiak)
HB307 passed the House unanimously and moved out of the Senate Resources Committee without change. It now is in Senate Finance. The Legislature appears to be very comfortable with the bill and sees it as a good step forward to resolving the many problems in this area. However, some opponents still question whether a public use area is the correct management vehicle and whether the bill has struck an acceptable balance between competing uses. Many, on both sides of the fence, also feel the fiscal note is light and won’t adequately address much needed, long overdue enforcement efforts or meet basic sanitation needs for this extraordinary, high use place.

HJR29 & SJR17 Exxon Valdez Reopener - Sen. French (D-Anchorage)
SJR 17 was scheduled to be heard last Wednesday in the Senate Resources Committee but they ran out of time. The bill was heard again on Wednesday, April 26, and passed from the Committee without objection. If actions are not taken by the U.S. Department of Law and the Department of Justice approximately June 1 to reopen the case, the opportunity to recover up to an additional $100 million will be lost forever.

SB86 Public Interest Litigation - By Request of the Governor
SB 86 had its third hearing in the House State Affairs Committee this week but the committee refused to move it thanks to the no votes of Rep Gatto, Rep. Seaton and Rep. Gruenberg. Reps Gardner, Elkins and Ramras weren’t there. Rep. Lynn voted yes. The measure traveled quickly through the Senate last year, sat quietly for months is the House and is within striking distance. This one isn’t over yet since it appears to be on the Governor’s must have list and almost anything goes this time of year.

The bill limits the award of attorney's fees to public interest litigants who have filed claims against the state and municipalities. Currently, these litigants are often granted full fees in cases determined by the court to be advancing an issue that reflects strong public policies. This “government trumps the people” measure upsets the balance just to save a few bucks and will discourage lawsuits by ordinary citizens to address important policy issues.

SB 170 Department of Fish & Game Powers & Duties - Sen. Seekins (R-Fairbanks)
This very long and very complicated measure covers a tremendous amount of Fish and Game territory. SB170 was heard for the second time last week. A sponsor substitute was offered following the last hearing, where there was quite a bit of testimony – some of which was positive but mostly focused on a wide variety of concerns. It is not clear whether it has legs and will move this session. If this bill begins to move, be on standby for action alerts.

HB420 Riparian Protection Standards - By Request of the Governor
This bill is back in action and is scheduled for a hearing in the Senate Resources Committee this week. It would complete the task of setting statewide riparian standards that began with the 1990 changes to the Forest Practices Act (AS 41.17) and has our strong support.

HB318 Eminent Domain - Reps. McGuire (R-Anchorage), Holm (R-Fairbanks) and Hawker (R-Anchorage)
Sitting in Senate Finance, this bill is likely to pass this session but may have to wait a bit longer while the political trades are being negotiated. While not perfect, it is now in pretty good shape.

HB324 Invasive Species - Rep. LeDoux (R-Kodiak)
This House bill is pending in the Senate, but there has been no action since our last report. This bill bans the importation, transfer, and cultivation of orange hawkweed and purple loosestrife. It is a start but we continue to encourage the Administration to establish an invasive species working group to take a comprehensive look at marine and terrestrial issues.

HB380 State Veterinarian Powers (Avian Flu) - Rep. Meyer (R-Anchorage)
This bill is sitting in Senate Finance. No action has been taken since our last report. HB 380 repeals and reenacts several provisions of Title 3 to modernize the powers of the Commissioner of the Department of Environmental Conservation and the State Veterinarian. Avian influenza is one in a long list of zoonotic diseases that can be devastating to animals and potentially pandemic in human populations. The changes made by this bill will allow the State Veterinarian to respond immediately to potential dangers to Alaskans and our animal populations.

HB418 Mining Taxes and Royalties - Rep. Seaton (R-Homer)
This bill, which will increase mining taxes and royalties, is still sitting in the House Ways and Means Committee. No actions have been taken since the last report. This bill is dead but we expect the issue to be back on the table next year.

HCR29 Pebble Mine - Rep. Hawker (R-Anchorage)
This resolution requests the Commissioner of Natural Resources to complete a management plan for the area encompassing the Pebble copper deposit. This resolution is dead.

SB85 Dalton Highway ORV Use - Sen. Seekins (R-Fairbanks)
This bill would break a longstanding promise to the people of the region by repealing the ban on the use of certain off-road vehicles within five miles of the right-of-way of the James Dalton Highway . It continues to sit in House Transportation and is not yet scheduled for a hearing.

HB360 Regulation of Public Drinking Water – Rep. Meyer (R-Anchorage)
This bill is still sitting in House Finance. It directs the Department of Environmental Conservation to regulate small public water systems to ensure that the public's water supply is safe and clean.

SB305 & HB488 Oil & Gas Production Tax – Released by Request of the Governor
The Senate Finance Committee passed out its version of the PPT, which was passed on the Senate Floor on April 25. The Senate version of the bill is now in House Finance, where it will The House Finance Committee is still working on theirs. The Senate Finance Committee bill brought the tax rate closer to the governor's proposal -- 22.5 percent instead of 25 percent plus “progressivity”. The committee also increased from 20 percent to 25 percent the tax credit companies could claim on their annual capital investments. The production tax takes effect April 1, 2006 . The oil companies and the Administration oppose this compromise proposal and contend it will discourage necessary investment.

A comparison of the basic provisions of the Governor's proposal, the House version, and the Senate Version can be found below. For more information, visit tlast week's issue of the Conservation Watch.

SB 166 Wildlife Conservation Tag - Sen. Bunde (R-Anchorage)
No action since last report - still sitting in Senate Resources. A new CS would change this from a mandatory fee system to an optional one where you could buy a conservation pin with proceeds going to a wildlife conservation account in the fish and game fund.

HB365 House Operating Budget – Released by Request of the Governor
The House Operating Budget passed the Senate. A House/Senate conference committee has been formed and is working through the differences.

SB232 Supplemental Appropriations – Released by Request of the Governor
The Supplemental Appropriations bill is a done deal and has been signed by the Governor. It includes $750,000 for Arctic Power; $3 million to PAC West Communications for a lobbying effort to open ANWR; $3.3 million for the Power Cost Equalization program (House number); and $250,000 for the bulk-fuel loan program.

SB231 Capital Budget – Released by Request of the Governor
The Senate Finance proposal for the Capital Budget has hit the streets and will be the subject of several hearings this week, including an opportunity for two days of public testimony on Thursday and Friday – something that doesn’t always happen with capital budgets. Juneau Access and the infamous “bridges to nowhere” are still in there; with less money for the Juneau road than proposed by the Governor ($25 million instead of $45 million). The $9 million originally requested by the Governor for the Stampede Road was not in the Committee Substitute released on Monday.

New Movers

SB 316 Court Review of Stranded Gas Development Act - Senate Judiciary
This brand new bill - apparently on the fast track - is causing much public angst because it appears to eliminate meaningful judicial review of the Administration’s findings and conclusions regarding the gasline contract and whether it meets the requirements of the Stranded Gas Act. It has been heard several times now in Senate Judiciary, which is currently struggling with this last minute and very important issue.

The Governor contends that current law, which allows for a challenge after the Commissioner of Revenue’s Findings and the contract's release, doesn’t reflect the fact that the final decision will actually be made by the Legislature. Prior versions of the law gave the Administration the last say over the contract without requiring legislative approval. While it made sense to allow a legal challenge in that case since it was truly a final decision, the administration doesn’t think it makes sense to allow a challenge midway through the revised process in a situation where the legislature has the final say.

Murkowski reasonably argues that the issues are not ripe for review until the Legislature makes its decision to go forward with the contract. Allowing an earlier challenge would simply “high center” legislative consideration of the gas contract prematurely and for no good reason. In other words, they are just trying to avoid unnecessary judicial delays while the decision making process is still underway.

But, even then, he contends the findings of the commissioner should not be subject to challenge since they are really recommendations from the administration – just like proposed legislation – that are subsumed by the action of the legislature and therefore shouldn’t be the subject of a legal challenge.

Others argue that subsumed or not, the findings are the foundation for the gasline decision. They also point out that this is an up or down vote where the legislature has no ability to change the details. As such, the findings have independent and fundamental significance and should be subject to challenge at the time they are released in final form.

While Democrats and Republicans are sympathetic to the Governor’s timing arguments there also seems to be general agreement on the committee that the bill must not interfere with the public’s right to challenge 1) the findings themselves; 2) the process for reaching them; or 3) the contract’s constitutionality or enforceability. The exact wording is under discussion. They are still debating the issue but also appear to agree the bill should specify that all background information relevant to the decision must be made available to the public at the time the preliminary finding is released for public review.

Similar conversations are underway in the House over HB 502, the companion measure.

Hot Bills

Bills move at a rapid pace this time of year. You can obtain up-to-date legislative information on the BASIS website. The following chart notes the status of a few bills of importance to the conservation community.

Hearings this Week

Click on the date in the table below to get the most current schedule information for that day, or check the BASIS hearing schedule. Once a bill has been heard in a particular committee it may be brought up again without public notice or listing on the weekly committee schedule. You can click on a committee name to see a list of its members.