Legislature(2017 - 2018)HOUSE FINANCE 519

03/07/2017 01:30 PM FINANCE

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Audio Topic
01:38:40 PM Start
01:38:40 PM HB57 || HB59
01:39:28 PM Amendments: Language
03:13:43 PM Amenmdents: All Remaining Items
05:16:04 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 57 APPROP: OPERATING BUDGET/LOANS/FUNDS TELECONFERENCED
Heard & Held
+= HB 59 APPROP: MENTAL HEALTH BUDGET TELECONFERENCED
Heard & Held
Amendments
+ Bills Previously Heard/Scheduled TELECONFERENCED
HOUSE BILL NO. 57                                                                                                             
                                                                                                                                
     "An  Act making  appropriations for  the operating  and                                                                    
     loan  program  expenses  of state  government  and  for                                                                    
     certain   programs;    capitalizing   funds;   amending                                                                    
     appropriations;   repealing    appropriations;   making                                                                    
     supplemental  appropriations and  reappropriations, and                                                                    
     making  appropriations  under   art.  IX,  sec.  17(c),                                                                    
     Constitution  of   the  State   of  Alaska,   from  the                                                                    
     constitutional budget  reserve fund; and  providing for                                                                    
     an effective date."                                                                                                        
                                                                                                                                
HOUSE BILL NO. 57                                                                                                             
                                                                                                                                
     "An  Act making  appropriations for  the operating  and                                                                    
     loan  program  expenses  of state  government  and  for                                                                    
     certain   programs;    capitalizing   funds;   amending                                                                    
     appropriations;   repealing    appropriations;   making                                                                    
     supplemental  appropriations and  reappropriations, and                                                                    
     making  appropriations  under   art.  IX,  sec.  17(c),                                                                    
     Constitution  of   the  State   of  Alaska,   from  the                                                                    
     constitutional budget  reserve fund; and  providing for                                                                    
     an effective date."                                                                                                        
                                                                                                                                
1:38:40 PM                                                                                                                    
                                                                                                                                
^AMENDMENTS: LANGUAGE                                                                                                         
                                                                                                                                
1:39:28 PM                                                                                                                    
                                                                                                                                
Co-Chair Seaton  addressed the  departments in  the language                                                                    
section.  He reminded  the committee  that backup  documents                                                                    
from  Legislative  Legal  Services   were  included  in  the                                                                    
packet.                                                                                                                         
                                                                                                                                
1:40:10 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
1:41:16 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Foster MOVED to ADOPT Amendment L H HSS 49 (copy                                                                       
on file):                                                                                                                       
                                                                                                                                
     Juvenile Justice                                                                                                           
     Nome Youth Facility                                                                                                        
     L H HSS 49 - Contingency funding to keep the NYF open                                                                      
     unless DHSS determines that closing it reduces costs                                                                       
     Offered by Representative Foster                                                                                           
     30-GF1855U.21 Wallace 3/6/17                                                                                               
                                                                                                                                
     Add contingency language  appropriating $1,693.9 of UGF                                                                    
     to  keep  the  Nome  Youth Facility  open  unless  DHSS                                                                    
     determines  that the  cost of  closing  the Nome  Youth                                                                    
     Facility is equal  to, or exceeds, the  cost of keeping                                                                    
     it open.                                                                                                                   
                                                                                                                                
Representative Wilson OBJECTED.                                                                                                 
                                                                                                                                
Co-Chair Foster read the  amendment description [see above].                                                                    
He  elaborated  that  the  prior year  the  funds  had  been                                                                    
addressed in  the committee process; funds  had been removed                                                                    
and added  back into the  budget. However, the  governor had                                                                    
not  included  funding  in  his   proposed  budget  for  the                                                                    
upcoming  year.  The  amendment added  contingency  language                                                                    
specifying  the legislature  would  continue to  appropriate                                                                    
needed funds unless  the department found it  was more cost-                                                                    
effective to close the facility.                                                                                                
                                                                                                                                
Representative  Wilson was  confused by  the amendment.  She                                                                    
believed  language   amendments  were  typically   aimed  at                                                                    
getting something  done that did  not have a  dollar amount.                                                                    
She  surmised that  if closing  the facility  would mean  it                                                                    
would cost  more than $1.693  million and it would  mean the                                                                    
expense  would  be included  elsewhere  in  the budget.  She                                                                    
asked  about the  plan for  the youth  if the  Nome facility                                                                    
closed.  She asked  if the  funding would  be sufficient  to                                                                    
shift back to the Nome youth facility to keep it open.                                                                          
                                                                                                                                
Co-Chair  Foster answered  that $2.6  million was  currently                                                                    
budgeted for the facility. The  governor had left $1 million                                                                    
in his  proposed budget  to transport  youth back  and forth                                                                    
from  Nome  to another  location  such  as Mclaughlin  Youth                                                                    
Center [in  Anchorage], Bethel, or Fairbanks.  The amendment                                                                    
specified that  if it  looked like  costs to  the department                                                                    
would   exceed   $1.6   million  (for   services   such   as                                                                    
transportation  and  cultural   programs),  the  Nome  youth                                                                    
facility would be allowed to remain open with those funds.                                                                      
                                                                                                                                
Representative  Wilson understood  that $1  million remained                                                                    
in  the budget  for travel.  She restated  Co-Chair Foster's                                                                    
statement  that  $2.6  million   had  been  removed  by  the                                                                    
governor.  She asked  if the  language  meant that  $693,900                                                                    
would  have  to  come  from other  facilities  in  order  to                                                                    
complete the funding.                                                                                                           
                                                                                                                                
1:45:32 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster  explained that $2.6  million was  the total                                                                    
budget; of that  amount $1 million remained  [in the current                                                                    
budget], which  meant there was  a deficit of  $1.6 million.                                                                    
The department  would need  to prove  that it  could provide                                                                    
the alternative for less than  the $2.6 million. He reasoned                                                                    
the Nome facility  should be kept open if  the cost exceeded                                                                    
that amount. He believed other  things had not been factored                                                                    
in such  as culturally  relevant programs and  work programs                                                                    
offered in the Nome facility  that were not offered in other                                                                    
locations.  He  explained  that  the  Nome  facility  should                                                                    
remain  open  if  it  turned  out  it  would  cost  more  to                                                                    
transport the  youths. He added  that in order to  close the                                                                    
facility the department would have  to determine it would be                                                                    
cheaper to close the facility.                                                                                                  
                                                                                                                                
Representative Wilson  spoke to  her understanding  that the                                                                    
current budget  contained $1 million for  the transportation                                                                    
of youths  from Nome  to facilities  in other  locations and                                                                    
back.  She  stated  there was  not  currently  $1.6  million                                                                    
designated  toward Nome.  She  surmised  that because  other                                                                    
services  would still  be offered,  potentially  all of  the                                                                    
costs could  be pooled  together. She  was trying  to ensure                                                                    
the amendment  would not remove  funding from  another youth                                                                    
facility.  She wondered  if the  amendment  had any  "teeth"                                                                    
requiring the department  to find $1.6 million  and keep the                                                                    
facility open  if it merely contained  contingency language.                                                                    
She remarked  that closing  the facility  may "be  more, but                                                                    
it's actually  in the other  facilities that are  open." She                                                                    
was  concerned  about   short-handing  other  facilities  by                                                                    
keeping  the  Nome  facility  open.  She  wanted  to  verify                                                                    
"whether or not  we're actually making them  [DHSS] look for                                                                    
it, or the  budget stays the same, they  can just reallocate                                                                    
it over here if they want to, to keep it open."                                                                                 
                                                                                                                                
1:48:39 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster  answered that the amendment  would not take                                                                    
money from  any other  youth facilities such  as Mclaughlin,                                                                    
Mat-Su,  Kenai, and  Fairbanks. The  amendment would  be the                                                                    
addition of a  UGF increment. He detailed  that the facility                                                                    
should remain open if it turned  out it would cost more than                                                                    
$2.6 million to close the facility.                                                                                             
                                                                                                                                
Vice-Chair Gara believed the  amendment read incorrectly. He                                                                    
believed  the word  "unless" on  the second  line should  be                                                                    
"if."  He  stated  the  goal  was to  keep  the  Nome  Youth                                                                    
Facility open if closing it would cost more.                                                                                    
                                                                                                                                
Co-Chair Foster agreed.                                                                                                         
                                                                                                                                
Vice-Chair   Gara  considered   offering  an   amendment  to                                                                    
Amendment H HSS 49.                                                                                                             
                                                                                                                                
1:50:18 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
1:51:30 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
[Note:  it   was  determined  the  amendment   language  was                                                                    
correct;  therefore,   the  conceptual  amendment   was  not                                                                    
offered.]                                                                                                                       
                                                                                                                                
Representative Thompson  commented that the youth  from Nome                                                                    
would  be  transferred  to another  youth  facility  in  the                                                                    
state. He asked  if there were provisions  in the Department                                                                    
of Health  and Social  Services (DHSS)  budget to  cover the                                                                    
cost of  the additional kids  who would be added  to another                                                                    
facility. He wanted  to ensure they were  not putting burden                                                                    
on other facilities that did  not have sufficient funding to                                                                    
care for additional youths.                                                                                                     
                                                                                                                                
Co-Chair  Foster  answered  that  currently  the  Mclaughlin                                                                    
Youth Center  was at  102 percent  capacity. The  intent had                                                                    
been to transfer  kids from Nome to  Mclaughlin. He reasoned                                                                    
that there may be times  where some openings were available,                                                                    
but there  may not be. He  continued that if the  youth were                                                                    
only transferred to Mclaughlin, the  center may have to open                                                                    
up  a wing  that  had previously  been  closed, which  would                                                                    
increase  costs. He  added that  Mclaughlin also  used Kenai                                                                    
and Mat-Su as overflow.                                                                                                         
                                                                                                                                
Representative  Thompson thought  it  meant  there would  be                                                                    
increased costs  elsewhere. He  asked if  the cost  would be                                                                    
part  of the  $1.6 million  that  would be  a benchmark  for                                                                    
whether money was being saved or not.                                                                                           
                                                                                                                                
Co-Chair Foster replied that thus  far the costs included in                                                                    
the  governor's  $1  million  were  travel,  detention  (for                                                                    
instances  when weather  prevented  travel),  the trials  in                                                                    
Nome,  and  other.  There  were other  costs  that  had  not                                                                    
initially  been figured  in  for a  whole  list of  programs                                                                    
offered  related  to  cultural  identity  (e.g.  subsistence                                                                    
related programs) that  were not offered at  a facility like                                                                    
Mclaughlin.  At  present,  a  dollar  amount  had  not  been                                                                    
determined  on  the  items. The  amendment  would  give  the                                                                    
department time  to quantify the  issues. He  concluded that                                                                    
if it turned  out the Nome facility cost more  to keep open,                                                                    
the  facility  would be  closed;  however,  if it  was  more                                                                    
expensive to close the facility, it would remain open.                                                                          
                                                                                                                                
1:54:37 PM                                                                                                                    
                                                                                                                                
Representative  Thompson asked  if there  was a  deadline on                                                                    
when the department's study had  to be complete. He asked if                                                                    
the determination would be made by June 30 [2017].                                                                              
                                                                                                                                
Co-Chair Foster  answered that he  had asked  the department                                                                    
to  review the  issue,  but  a date  had  not  been set.  He                                                                    
explained that the contingency specified  that if DHSS could                                                                    
not prove  shutting down the  facility would save  the state                                                                    
money by the  time the budget was passed  by the legislature                                                                    
on April 17, the money would be appropriated.                                                                                   
                                                                                                                                
Representative  Wilson WITHDREW  her OBJECTION.  There being                                                                    
NO further OBJECTION, Amendment H HSS 49 was ADOPTED.                                                                           
                                                                                                                                
1:55:53 PM                                                                                                                    
                                                                                                                                
Vice-Chair Gara MOVED to ADOPT Amendment  L H DBT 8 (copy on                                                                    
file):                                                                                                                          
                                                                                                                                
     Debt Service                                                                                                               
     School Debt Reimbursement                                                                                                  
     L  H DBT 8 - Restore School Debt                                                                                           
     Reimbursement amount to FY18 Gov Requested amount                                                                          
     Offered by Representative Gara                                                                                             
     Reference: 30-GH1855U.7.                                                                                                   
                                                                                                                                
     This amendment restores School Debt Reimbursement to                                                                       
     the Governor's FY 18 level of $115,956.6. Please note                                                                      
     corresponding REAA amendment 30-GH1855U.8.                                                                                 
                                                                                                                                
Representative Wilson OBJECTED.                                                                                                 
                                                                                                                                
Vice-Chair Gara  reviewed his  amendment that  would restore                                                                    
the statutory  school debt reimbursement  the state  owed to                                                                    
the full amount.  He noted the statutes  were always subject                                                                    
to appropriation.  He detailed  that about one  week earlier                                                                    
the committee  had considered  the idea  of saving  funds by                                                                    
reducing  state money  going to  school debt  reimbursement.                                                                    
However, he  believed the committee  had heard  clearly from                                                                    
the public  that the reduction  would hit  local communities                                                                    
harder than he  would like. He furthered  that Anchorage and                                                                    
Fairbanks had tax caps and if  they had to absorb the costs,                                                                    
they  would have  to find  something  else to  cut in  their                                                                    
local budget  such as  police or  other. He  believed public                                                                    
testimony had  been convincing that  the full  amount should                                                                    
be restored.                                                                                                                    
                                                                                                                                
Representative  Wilson   testified  in  opposition   to  the                                                                    
amendment. She stated that any  time cuts were made it would                                                                    
be  hard. She  believed that  unfortunately the  state could                                                                    
not  keep taking  on the  responsibility. She  had told  her                                                                    
constituents that the 70/30 or  60/40 percent split on bonds                                                                    
was not guaranteed. She advised  constituents to be prepared                                                                    
for 100  percent. She  shared that  Fairbanks had  bonded at                                                                    
100  percent  since  there  had  been  a  moratorium  -  the                                                                    
community had  decided it was  important enough (even  if it                                                                    
had to  foot the bill) to  "be able to do  this." She stated                                                                    
that the Fairbanks  North Star Borough did  not have police.                                                                    
She explained that the City  of Fairbanks had police, but it                                                                    
would not affect  city police because it would  be a borough                                                                    
debt.  She  knew  there had  been  questions  about  whether                                                                    
people  would  prefer   a  cut  to  the   school  bond  debt                                                                    
reimbursement or  to the Base Student  Allocation (BSA). She                                                                    
reasoned  that  at  this  point  anything  would  take  some                                                                    
adjustments. She  clarified that  the reduction to  the bond                                                                    
reimbursement  did not  constitute a  broken promise  by the                                                                    
legislature.  She continued  that the  state had  been lucky                                                                    
enough to  have enough revenue  to keep the 70/30  or 60/40,                                                                    
but she  believed most municipalities knew  that the funding                                                                    
was by appropriation.                                                                                                           
                                                                                                                                
1:58:56 PM                                                                                                                    
                                                                                                                                
Representative Pruitt  spoke against  the amendment.  He was                                                                    
challenged  with voting  on the  current amendment  prior to                                                                    
voting  on  a  BSA  discussion.  He  thought  there  was  an                                                                    
understanding the committee had  already indicated by voting                                                                    
to  include the  reduction  to the  bond reimbursement  that                                                                    
something different would have to  be done with education in                                                                    
the current year. He stated he  thought there was more to be                                                                    
done beyond  funding, but  it would  not happen  through the                                                                    
budget bill. He disagreed  with specifically going after the                                                                    
bond debt  reimbursement -  various communities  had handled                                                                    
the issue  differently. He  remarked that  "this is  kind of                                                                    
focused in on specific  communities just because they're the                                                                    
ones that  it deals with."  He believed the  legislature had                                                                    
to do  something and would  have to reduce, but  he believed                                                                    
it was  probably better to  do it through the  BSA mechanism                                                                    
rather than the debt mechanism.  However, because he had not                                                                    
been able to  vote on the BSA component as  of yet, he would                                                                    
vote  against the  current  amendment. He  did  not want  to                                                                    
double up and  remarked that based on the outcome  of a vote                                                                    
on  the  BSA,  perhaps   the  bond  reimbursement  could  be                                                                    
reconsidered.                                                                                                                   
                                                                                                                                
Representative   Thompson  echoed   the  sentiment   of  the                                                                    
previous  speaker.  He  did  not  want  to  see  both  items                                                                    
prevail.  He thought  it may  need  to be  addressed on  the                                                                    
House  floor   in  order  to   ensure  the  right   mix  was                                                                    
established. He  disagreed with not funding  the school bond                                                                    
debt; however, he would vote against the amendment.                                                                             
                                                                                                                                
2:01:31 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Gara appreciated  the comments  that individuals                                                                    
were trying to  save money. He referred to  one comment that                                                                    
if the  legislature followed statutory formula  and provided                                                                    
the  funding to  schools  for bond  debt reimbursement  that                                                                    
classroom funding  should be cut  instead. He did  not agree                                                                    
with cutting  school funding. He detailed  that schools were                                                                    
roughly $30  million behind  where they  had been  two years                                                                    
earlier. He believed that at  some point it was necessary to                                                                    
move  the state  forward and  provide a  state where  people                                                                    
wanted to raise their  children. He believed the legislature                                                                    
should pay  the statutory formula  - the state's  payment of                                                                    
$48 million to help towards school debt reimbursement.                                                                          
                                                                                                                                
2:02:35 PM                                                                                                                    
                                                                                                                                
Representative Wilson MAINTAINED her OBJECTION.                                                                                 
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Ortiz, Gara, Grenn, Guttenberg, Kawasaki, Foster,                                                                     
Seaton                                                                                                                          
OPPOSED: Pruitt, Thompson, Tilton, Wilson                                                                                       
                                                                                                                                
The MOTION PASSED (7/4). There being NO further OBJECTION,                                                                      
Amendment L H DBT 8 was ADOPTED.                                                                                                
                                                                                                                                
2:03:31 PM                                                                                                                    
                                                                                                                                
Representative Ortiz WITHDREW Amendment L H DBT 9 (copy on                                                                      
file).                                                                                                                          
                                                                                                                                
2:03:50 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:04:17 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Seaton MOVED to ADOPT Amendment H SAP 18 (copy on                                                                      
file):                                                                                                                          
                                                                                                                                
     Language Amendments                                                                                                        
     L  H SAP 18 - Reinsurance program                                                                                          
     Offered by Representative Seaton                                                                                           
     See 30-GH1855U5, Wallace, 3-2-17                                                                                           
                                                                                                                                
    This amends sec. 10(g) and (h) in HB 57, version U.                                                                         
     The  Department of  Commerce,  Community, and  Economic                                                                    
     Development, Division  of Insurance, has applied  for a                                                                    
     federal  waiver   of  Section   1332  of   the  Patient                                                                    
     Protection and  Affordable Care Act. If  this waiver is                                                                    
     approved, federal  funding may  become available  in an                                                                    
     amount  equal  to  the  federal  savings  from  lowered                                                                    
     insurance  premium  subsidies  for  eligible  Alaskans.                                                                    
     Approval  of the  waiver is  expected  before June  30,                                                                    
     2017.  Funding  from  the Alaska  Comprehensive  Health                                                                    
     Insurance  fund  would  continue   to  be  required  to                                                                    
     reinsure  Alaskans who  were not  eligible for  federal                                                                    
     subsidies.                                                                                                                 
                                                                                                                                
     The change to subsections (g)  and (h) extends the time                                                                    
     period of  this Reinsurance Program  appropriation from                                                                    
     the calendar  year 2018 program  to the  calendar years                                                                    
     2018 through  2022 programs  to match  the term  of the                                                                    
     waiver.                                                                                                                    
                                                                                                                                
     New subsection  (i) adds expenditure  authorization for                                                                    
     federal receipts  that may  become available  in fiscal                                                                    
     year  2018 with  the approved  waiver for  the calendar                                                                    
     year 2018 Reinsurance Program.  The federal waiver will                                                                    
     be  for a  five-year period;  however, future  receipts                                                                    
     cannot be  obligated in the state  budget so additional                                                                    
     federal  receipt  authorization  will be  requested  in                                                                    
     future years for the annual receipt collections.                                                                           
                                                                                                                                
     New   subsection  31(c)   makes  these   appropriations                                                                    
     contingent upon  federal approval  of the  Section 1332                                                                    
     waiver.  This  contingent   language  is  required  for                                                                    
     eligibility  for the  federal waiver  because it  makes                                                                    
     Alaska's   program  budget-neutral   for  the   federal                                                                    
     government.                                                                                                                
                                                                                                                                
Representative Wilson OBJECTED.                                                                                                 
                                                                                                                                
Co-Chair  Seaton reviewed  his amendment  related to  health                                                                    
insurance program. The  amendment adjusted the appropriation                                                                    
Sections  10(g)  and   (h)  in  HB  57,  the   name  of  the                                                                    
reinsurance  program  to  conform  to  legislative  drafting                                                                    
style,  and  Section  10(h)  to  match  the  timing  of  the                                                                    
reinsurance program federal waiver.  The amendment would add                                                                    
federal  receipt authority  for  funds from  the waiver  and                                                                    
added a  contingency section for the  appropriations pending                                                                    
approval of the waiver. The  change would extend the current                                                                    
calendar year  2018 appropriation  made in Section  10(h) to                                                                    
cover the term  of the federal waiver  through calendar year                                                                    
2022 (FY 23).  The amendment would also  add federal receipt                                                                    
authority for  receipts collected  in 2018 and  allowed them                                                                    
to be  spent over the  lifetime of the waiver.  He continued                                                                    
that  since  future receipts  could  not  be obligated,  the                                                                    
department anticipated  requesting federal  authorization in                                                                    
the state  budget annually for  the term of the  waiver. The                                                                    
amendment   would   also   add  contingency   language   for                                                                    
appropriations pending  federal approval of the  waiver. The                                                                    
federal government  required the  contingency so  the waiver                                                                    
would  be  neutral  for its  budget.  Without  the  language                                                                    
federal funds would not be  available. Federal funds for the                                                                    
calendar year  2018 program were  estimated at  $48 million.                                                                    
The amendment  would back up  the reinsurance program  - the                                                                    
Alaska  Comprehensive Health  Insurance Association  (ACHIA)                                                                    
amount that had been passed  to reduce the individual market                                                                    
for  the 7.5  percent  increase instead  of  the 48  percent                                                                    
increase in the health insurance program.                                                                                       
                                                                                                                                
2:06:47 PM                                                                                                                    
                                                                                                                                
Representative  Wilson discussed  that  the legislature  had                                                                    
put  $55 million  into the  program the  previous year.  She                                                                    
asked  if there  was  another appropriation  in the  current                                                                    
year  budget for  the program.  Alternatively, she  asked if                                                                    
the amendment  pertained to utilizing  the $55  million from                                                                    
the previous year.                                                                                                              
                                                                                                                                
Co-Chair Seaton  answered that it  was the $55  million that                                                                    
with  federal  waiver approval  would  be  spread over  five                                                                    
years ($11 million  per year) instead of the  $55 million in                                                                    
state funding  that would  be needed  annually if  the state                                                                    
did not receive the federal waiver of $48 million.                                                                              
                                                                                                                                
Representative  Wilson  asked   for  verification  that  the                                                                    
amendment would  also allow federal  funds to  be accessible                                                                    
without coming  back to the legislature.  She commented that                                                                    
the  state   was  basically  taking  on   what  the  federal                                                                    
government  probably  should  have been  doing  through  its                                                                    
program. She added  that the department would  also have the                                                                    
ability to utilize the funds  without having to come back to                                                                    
the legislature for approval.                                                                                                   
                                                                                                                                
Co-Chair Seaton  agreed. He detailed there  would be federal                                                                    
receipt authority  for $48 million  matching with  about $11                                                                    
million  in state  funds to  achieve the  program reductions                                                                    
with the intent  of maintaining a health  insurer within the                                                                    
state.                                                                                                                          
                                                                                                                                
Representative Wilson WITHDREW her OBJECTION.                                                                                   
                                                                                                                                
There being NO  further OBJECTION, Amendment L H  SAP 18 was                                                                    
ADOPTED.                                                                                                                        
                                                                                                                                
2:09:08 PM                                                                                                                    
                                                                                                                                
Co-Chair Seaton  MOVED to ADOPT  Amendment L H SAP  19 (copy                                                                    
on file):                                                                                                                       
                                                                                                                                
     L  H SAP 19 - Deposit the FY18 ASLC Dividend into the                                                                      
     General Fund                                                                                                               
     Offered by Representative Seaton                                                                                           
     See 30-GH1855U.3, Wallace, 3-2-17.                                                                                         
                                                                                                                                
     This  amendment   deposits  the  Alaska   Student  Loan                                                                    
     Corporation  FY18 dividend  of  $1.2  million into  the                                                                    
     general  fund and  also deactivates  the ASLC  Dividend                                                                    
     fund code  (1150, which  is classified  as UGF)  so the                                                                    
     dividend  is spent  as  UGF (code  1004).  There is  no                                                                    
     impact  on  UGF spending  and  no  loss of  information                                                                    
     caused by this amendment.                                                                                                  
                                                                                                                                
Representative Wilson OBJECTED.                                                                                                 
                                                                                                                                
Co-Chair Seaton explained the amendment  that would move the                                                                    
Alaska  Student Loan  Corporation (ASLC)  dividend into  the                                                                    
General Fund.                                                                                                                   
                                                                                                                                
Representative  Pruitt  asked  about the  policy  shift.  He                                                                    
wondered why  a separate fund  had been created.  He queried                                                                    
what  had  been  drawn  from  the fund  in  the  past.    He                                                                    
understood  there  was  no impact  in  undesignated  general                                                                    
funds  (UGF).  He wondered  how  the  amendment shifted  the                                                                    
payment process and about the  reasoning behind the proposal                                                                    
to eliminate the fund code.                                                                                                     
                                                                                                                                
Co-Chair  Seaton explained  the fund  code was  obsolete and                                                                    
not  tracked.   He  detailed  the   fund  code   was  merely                                                                    
"something else  sitting on the  books" used to  deposit the                                                                    
money into; however, it was  not used for anything else. The                                                                    
dividend was  spent as UGF.  He detailed that  the amendment                                                                    
provided language to clean up  fund codes for clarity and to                                                                    
eliminate  confusion about  whether  the funds  were UGF  or                                                                    
DGF. He  concluded it  was better off  in the  UGF category,                                                                    
which was all the amendment would accomplish.                                                                                   
                                                                                                                                
Representative   Wilson  understood   the  amendment   would                                                                    
eliminate  the  [ASLC]  fund;  however,   it  had  been  her                                                                    
understanding that  the $1.2 million  ASLC dividend  was the                                                                    
first dividend in a long time, if ever.                                                                                         
                                                                                                                                
Co-Chair Seaton  replied that he  believed it was  the first                                                                    
[ASLC]  dividend in  "a while,"  but he  believed there  had                                                                    
been dividends in the past.                                                                                                     
                                                                                                                                
Representative  Wilson asked  if the  $1.2 million  dividend                                                                    
was  derived   from  interest  on  higher   education  loans                                                                    
Alaskans had taken out.                                                                                                         
                                                                                                                                
Co-Chair Seaton answered that the  amount came from proceeds                                                                    
from the  ASLC, most of  which was derived from  interest on                                                                    
the  debt  paid.  He  detailed   that  interest  rates  were                                                                    
calculated at  a period  in time.  The funds  were collected                                                                    
over time - sometimes the  number was higher and other times                                                                    
it  was lower.  He explained  that when  the state  received                                                                    
more money  a dividend could  be paid into the  General Fund                                                                    
to help offset the existing budget deficit.                                                                                     
                                                                                                                                
Representative  Wilson believed  the money  was coming  from                                                                    
Alaskans who  had taken  out a loan.  She wondered  if there                                                                    
was  a  mechanism  to  lower the  rates  for  student  loans                                                                    
instead of  generating a dividend  to the state.  She wanted                                                                    
to make  sure the  state was not  charging more  for student                                                                    
loans than was necessary.                                                                                                       
                                                                                                                                
2:13:37 PM                                                                                                                    
                                                                                                                                
Co-Chair   Seaton  did   not   know   the  exact   statutory                                                                    
construction, but  normally people  borrowed money  and paid                                                                    
an  interest rate.  He  furthered that  no  matter what  the                                                                    
competitive  interest rate  was  at the  time, the  borrower                                                                    
paid the  interest rate  set at the  time they  borrowed the                                                                    
money. He reasoned that the  excess funds had been generated                                                                    
and could  help offset a  portion of the budget  deficit. He                                                                    
did  not  know   of  any  mechanism  in   place  that  would                                                                    
automatically  lower  people's  interest  rates  if  current                                                                    
interest  rates were  lower. He  added it  was generally  an                                                                    
application process if it existed.                                                                                              
                                                                                                                                
Representative  Wilson stated  she would  look into  whether                                                                    
there was  a mechanism  to adjust  current student  loans so                                                                    
that  the  state  was  not  making  it  harder  for  Alaskan                                                                    
students  to pay  back  their loans.  She  wondered how  the                                                                    
issue would  be tracked in the  future if the fund  code was                                                                    
removed.                                                                                                                        
                                                                                                                                
Co-Chair Seaton answered that a  dividend had to be accepted                                                                    
by  the  legislature;  it  would  come  to  the  legislature                                                                    
regardless of the removal of the fund code.                                                                                     
                                                                                                                                
Representative  Wilson WITHDREW  her OBJECTION.  There being                                                                    
NO further OBJECTION, Amendment L HSAP 19 was ADOPTED.                                                                          
                                                                                                                                
2:15:52 PM                                                                                                                    
                                                                                                                                
Representative Wilson  MOVED to ADOPT  Amendment L H  SAP 20                                                                    
(copy on file):                                                                                                                 
                                                                                                                                
     H SAP 20 - Eliminate ERA  payouts in FY17 and FY18, and                                                                    
     fund  K-12  with UGF  at  95  percent of  FY18  formula                                                                    
     amounts                                                                                                                    
     Offered by Representative Wilson                                                                                           
     30-GH1855U.16                                                                                                              
                                                                                                                                
     See attached  language from the  Division of  Legal and                                                                    
     Research Services.  The intent of this  amendment is to                                                                    
     ensure  no  funds  are transferred  from  the  Earnings                                                                    
     Reserve Account  to either the  General Fund or  to the                                                                    
     Public Education  fund and  funds the  Public Education                                                                    
     Fund at a reduced level (95 percent).                                                                                      
                                                                                                                                
Co-Chair Seaton OBJECTED.                                                                                                       
                                                                                                                                
Representative   Wilson   explained  the   amendment   would                                                                    
eliminate  the  [Permanent  Fund] earnings  reserve  account                                                                    
(ERA) payment for  FY 17 and FY 18. It  would also fund K-12                                                                    
with UGF  at 95 percent  of the  FY 18 formula  amounts. She                                                                    
was concerned that taking a  large amount from the ERA would                                                                    
mean there may come a  point where the Permanent Fund corpus                                                                    
was also  tapped, which  she did  not support.  She believed                                                                    
the issue  should go to a  vote of the people.  She recalled                                                                    
having the discussion with  colleagues several years earlier                                                                    
who  also  believed the  issue  should  go  to a  vote.  She                                                                    
stressed the  significance of the issue.  She continued that                                                                    
the state  had been lucky  to have  the balance in  the ERA,                                                                    
but the budget would withdraw  funds from the account for FY                                                                    
17 and FY 18. She referred  to late Governor Jay Hammond and                                                                    
his  50/50 plan.  She  believed he  had  been cautious  that                                                                    
taking  more than  a  yearly amount  could  have a  negative                                                                    
effect. She  reiterated that  the amendment  would eliminate                                                                    
the ERA  payouts. She supported  taking the issue to  a vote                                                                    
of  the people.  She  spoke  to the  K-12  component of  the                                                                    
amendment.   She   remarked   that  the   formula   included                                                                    
transportation funds because the  service was a Base Student                                                                    
Allocation (BSA)  by default. She elaborated  that the state                                                                    
was giving  transportation money to communities  without any                                                                    
type of bus  service. She did not know if  that had been the                                                                    
reason  for  the transportation,  but  it  was what  it  had                                                                    
become. She  concluded it  was outside of  the BSA,  but was                                                                    
utilized and funded in the same fashion.                                                                                        
                                                                                                                                
Co-Chair Seaton spoke  to his objection. He stated  that a 5                                                                    
percent budget  cut was  harder on  most communities  and on                                                                    
all school districts. He elaborated  that the elimination of                                                                    
the fund draw for FY 17  and FY 18 would severely hamper the                                                                    
passage of a budget.                                                                                                            
                                                                                                                                
2:20:05 PM                                                                                                                    
                                                                                                                                
Vice-Chair Gara  understood the point  of the  amendment was                                                                    
to save money, but he  opposed it. He explained that schools                                                                    
had already been  cut in the past several years.  He did not                                                                    
support an  additional 5 percent  cut to school  funding. He                                                                    
stated that  he wanted to  make sure people wanted  to raise                                                                    
their children in Alaska. He  believed the amendment went in                                                                    
the wrong direction.  He continued that it  was incumbent on                                                                    
the  legislature to  come up  with  a fiscal  plan to  start                                                                    
funding  the  needed services.  He  hoped  a plan  could  be                                                                    
agreed upon by the end of session.                                                                                              
                                                                                                                                
Representative Pruitt spoke in  support of the amendment. He                                                                    
remarked  there  were  several  things  going  on  with  the                                                                    
amendment that  involved a substantial  amount of  money and                                                                    
policy. He highlighted  the moving of money  into the Public                                                                    
Education Fund as well as  into the General Fund. There were                                                                    
two  components -  one  for FY  17  and one  for  FY 18.  He                                                                    
believed the committee would have  a robust discussion about                                                                    
whether or  not to  pay the current  year's budget  from the                                                                    
ERA. He did  not believe the funding should  merely occur in                                                                    
the budget  process. He reasoned that  the discussion should                                                                    
occur  around the  many different  proposed  bills aimed  at                                                                    
dealing  with the  challenge of  state  revenues. He  stated                                                                    
"this  doesn't  create  the  stability  that's  needed."  He                                                                    
understood that a  particular bill would be passed  - at the                                                                    
end the  fiscal notes would  move with the budget  and could                                                                    
be  incorporated   into  the  budget  during   closeout.  He                                                                    
disagreed  with making  the policy  at  present without  the                                                                    
bills.  He also  disagreed  with taking  money  from FY  17,                                                                    
which he  understood the governor  had also included  in his                                                                    
budget.                                                                                                                         
                                                                                                                                
Representative Pruitt  addressed the 5 percent  reduction to                                                                    
the BSA.  He explained that if  Amendment L H SAP  20 passed                                                                    
he  would request  that the  committee reconsider  the prior                                                                    
amendment related to school  bond debt reimbursement because                                                                    
he  did not  want  to  double up.  He  believed the  current                                                                    
strategy needed to be handled  differently. He remarked that                                                                    
he continued to  hear the legislature had  cut education. He                                                                    
acknowledged there had been a  veto the previous year by the                                                                    
governor. He continued that  education funding had increased                                                                    
continuously.  He  recalled  that   the  previous  year  the                                                                    
committee  had   heard  a  presentation  showing   that  the                                                                    
legislature had  increased education  higher than  the rates                                                                    
of  inflation for  the previous  eight  years. He  continued                                                                    
that the  increase had  been 30 percent,  which was  quite a                                                                    
bit more than inflation. He  stated that the legislature had                                                                    
continued to  show its commitment to  education. He believed                                                                    
that at present  it was necessary to  do things differently,                                                                    
which meant  that Anchorage  and other  areas would  have to                                                                    
participate  in  a  different way.  He  postulated  that  if                                                                    
anything had  been classified in the  "sacred cow" category,                                                                    
which  he  believed  the  committee had  done  with  a  good                                                                    
portion of the  current budget, then they  were never really                                                                    
honestly  going to  tackle the  budget. He  understood there                                                                    
were  challenges  to  education;  however, he  did  not  see                                                                    
significant  policy consideration  related to  how education                                                                    
was being  delivered. He stressed  that the  legislature was                                                                    
not   having  a   conversation  about   how  education   was                                                                    
delivered;  therefore,  unfortunately they  faced  scenarios                                                                    
like the  one facing the  committee where "we almost  take a                                                                    
hatchet  as  opposed  to   really  addressing  the  inherent                                                                    
challenges  with delivering  education  through Alaska."  He                                                                    
reiterated his support for the  amendment. He requested that                                                                    
the school  bond debt reimbursement  be reconsidered  if the                                                                    
amendment passed.  He did not  believe the two  items should                                                                    
be doubled up.                                                                                                                  
                                                                                                                                
2:24:49 PM                                                                                                                    
                                                                                                                                
Co-Chair  Foster acknowledged  Representatives Dan  Saddler,                                                                    
Lora Reinbold, and Jennifer Johnston in the audience.                                                                           
                                                                                                                                
Representative  Wilson provided  wrap up  on the  amendment.                                                                    
She explained  that one of  the reasons she had  offered the                                                                    
amendment was because the budget  would take more out of the                                                                    
ERA  than  was necessary.  She  detailed  that the  proposed                                                                    
budget  would take  the money  from one  savings to  another                                                                    
(i.e. from  the ERA  to the  Public Education  Fund) because                                                                    
one account  earned a  substantial amount  of money  and the                                                                    
other earned  a minimal amount.  She equated it to  a person                                                                    
getting ready to retire and  putting all of their money into                                                                    
a high  earning stock  portfolio, but  choosing to  cash out                                                                    
the  stocks and  place the  funds in  a low  earning savings                                                                    
account that  had ample  money. She agreed  that a  plan was                                                                    
needed, but  she believed the  state would lose  hundreds of                                                                    
millions of dollars by removing  money out of the ERA early.                                                                    
She elaborated  that it would  mean cashing out  stocks that                                                                    
had  a potential  of  significant gain  due  to the  current                                                                    
market  environment.  She  continued  that  to  fulfill  the                                                                    
provision  in the  budget it  would mean  cashing in  stocks                                                                    
even though  it may not  be a decision the  Alaska Permanent                                                                    
Fund  Corporation  (APFC)  would  chose  to  make.  She  was                                                                    
concerned about money the state  would lose. She believed it                                                                    
meant  the  state would  have  to  "take those  hundreds  of                                                                    
millions of dollars and go  somewhere else and find it." She                                                                    
stated  it  would  then  be   necessary  to  look  to  state                                                                    
residents to fill the gap,  when it would have been possible                                                                    
to  fill  the gap  by  the  state's own  investments  making                                                                    
money. She believed it made no sense.                                                                                           
                                                                                                                                
Representative Wilson  addressed the education  component of                                                                    
the amendment. She expressed her  support for education. She                                                                    
spoke to home  schooling and costs. She shared  that she had                                                                    
home schooled  her children and  had received a  fraction of                                                                    
the money  - the funds had  come out of her  own pocket. She                                                                    
stated  that the  [low] costs  home  schooled children  were                                                                    
educated on was  amazing. She stressed that  the state payed                                                                    
over $50,000 per  student in some districts.  She added "the                                                                    
sad thing is, we're still at  the bottom." She urged the use                                                                    
of technology.  She understood not all  areas had broadband.                                                                    
She  emphasized that  doing the  same thing  repeatedly with                                                                    
education would  cost more and  it had not worked  well. She                                                                    
acknowledged  that  Alaska  had   great  teachers,  but  she                                                                    
pointed  to   the  importance  of   allowing  them   to  use                                                                    
technology  and options  that  were not  as  costly as  some                                                                    
current  methods. She  believed  people would  want to  move                                                                    
from the  state if  the legislature  continued to  take more                                                                    
money  out  of  their  savings  accounts.  She  stated  that                                                                    
utilizing  savings  did  not constitute  a  plan,  the  only                                                                    
change was the  money would be taken from  a different fund.                                                                    
She  stated it  was the  people's  fund -  she thought  they                                                                    
should vote. She  believed using the ERA was  a huge mistake                                                                    
that would cost Alaskans.                                                                                                       
                                                                                                                                
Co-Chair Seaton MAINTAINED his OBJECTION.                                                                                       
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Pruitt, Thompson, Tilton, Wilson                                                                                      
OPPOSED: Gara,  Grenn, Guttenberg, Kawasaki,  Ortiz, Seaton,                                                                    
Foster                                                                                                                          
                                                                                                                                
The MOTION to adopt Amendment L H SAP 20 FAILED (4/7).                                                                          
                                                                                                                                
2:29:41 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:35:24 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Representative  Wilson MOVED  to ADOPT  Amendment L  HSAP 21                                                                    
(copy on file):                                                                                                                 
                                                                                                                                
     L   H SAP 21  - Supplemental payment of  FY17 permanent                                                                    
     fund dividend                                                                                                              
     Offered by Representative Wilson                                                                                           
     30GH1855U.12                                                                                                               
                                                                                                                                
     See the  attached language from  the Division  of Legal                                                                    
     and Research Services. The intent  of this amendment is                                                                    
     to appropriate  $663,350,000 from the  earnings reserve                                                                    
     account  to  the  dividend  fund  for  the  payment  of                                                                    
     supplemental FY17 permanent  fund dividends to eligible                                                                    
     individuals who  received a permanent fund  dividend in                                                                    
     October 2016.                                                                                                              
                                                                                                                                
Co-Chair Foster OBJECTED.                                                                                                       
                                                                                                                                
Representative  Wilson read  from the  amendment description                                                                    
[see above].  She corrected  a typo  in the  description and                                                                    
clarified   the   amount   was   $666,350,000   instead   of                                                                    
$663,350,000.  The amendment  would  restore the  governor's                                                                    
veto from  the previous  year in order  "to give  the people                                                                    
their money back."                                                                                                              
                                                                                                                                
Vice-Chair  Gara remarked  that there  were different  views                                                                    
around  the building  about  the size  of  the dividend.  He                                                                    
noted the House  Minority leader had proposed  a dividend of                                                                    
$1,000  and  the Senate  had  proposed  $1,000 the  previous                                                                    
year.  He  stated it  was  a  debate the  legislature  would                                                                    
continue to have for the remainder of the current session.                                                                      
                                                                                                                                
Representative  Pruitt did  not  support  the amendment.  He                                                                    
pointed  out  that  the  current  and  next  amendment  were                                                                    
similar, but they pertained to  different years. The current                                                                    
amendment  would  restore  the   governor's  veto  from  the                                                                    
previous  year [FY  17]. He  shared that  the previous  year                                                                    
when the  committee had  voted on  SB 128  [2016 legislation                                                                    
pertaining to  the Permanent Fund Dividend  and earnings] he                                                                    
had highlighted  the "huge  shift" that  the public  had not                                                                    
really  been  aware  of  at  the time.  He  added  that  the                                                                    
governor  had  made  a decision  that  the  legislature  had                                                                    
chosen  not to  override.  He spoke  to  several reasons  he                                                                    
believed  the  legislature  should not  merely  restore  the                                                                    
governor's  veto. First,  the economic  challenges residents                                                                    
and the  state had gone  through the prior fall  had already                                                                    
passed. He did not mean to  imply that the reduction did not                                                                    
impact residents  and the economy.  However, he  believed it                                                                    
would  create an  "up and  down scenario"  if the  amendment                                                                    
passed.  He reasoned  that passage  of  the amendment  would                                                                    
give people  hope there would  be an additional  $1,000 from                                                                    
the  prior  year.  He  surmised it  was  highly  likely  the                                                                    
governor  may veto  the amount  again. He  was concerned  it                                                                    
would  create  instability in  the  eye  of the  public.  He                                                                    
shared that  people had  emailed him  the prior  year saying                                                                    
they understood  that something would  have to be  done, but                                                                    
requesting  the  legislature  to  hold  off  on  the  timing                                                                    
because they  had budgeted  based on  the amount.  He opined                                                                    
that instead  of looking to  the previous year, it  was time                                                                    
to move forward. He believed  the previous amendment and the                                                                    
next amendment  that talked  about how  to fill  the revenue                                                                    
gap   both   included   their   own   conversations,   which                                                                    
constituted the moving forward  component. He concluded that                                                                    
he would  love to be able  to give residents the  money, but                                                                    
in  order to  prudently  manage the  people's  money in  the                                                                    
Permanent  Fund and  to ensure  money was  available in  the                                                                    
future, he believed  it was appropriate to  look forward and                                                                    
not back.                                                                                                                       
                                                                                                                                
Representative  Tilton spoke  in support  of the  amendment.                                                                    
She agreed  that the legislature  had an obligation  to help                                                                    
people manage expectations.  However, residents had expected                                                                    
to  receive the  money the  previous year,  but it  had been                                                                    
vetoed  by  the  governor.  She stated  that  the  veto  had                                                                    
resulted in  more residents dipping below  the poverty level                                                                    
than  before.   She  felt   strongly  that   everything  the                                                                    
legislature  did   when  it  considered  reducing   the  PFD                                                                    
resulted in a changing of the economy.                                                                                          
                                                                                                                                
Representative  Wilson provided  wrap up  on the  amendment.                                                                    
She underscored  that the money  was sitting in the  ERA and                                                                    
more  interest was  being  earned daily,  but  based on  the                                                                    
direction of the  discussions most of the money  would go to                                                                    
government, not  residents. She shared  that she  had spoken                                                                    
with  constituents and  she believed  the money  belonged to                                                                    
the people, which  had been the agreement when  the fund had                                                                    
been  formed.  She detailed  that  once  the fund  had  been                                                                    
created the  legislature had passed statute  specifying that                                                                    
some  of the  funds would  be set  aside for  residents. She                                                                    
noted that the other portion of  the funds could be used for                                                                    
government for  essential services,  but she thought  a vote                                                                    
of the people should occur.  She stressed that the money did                                                                    
not have  to be earned  by residents,  it was given  to each                                                                    
resident. She furthered  that residents did not  own most of                                                                    
the resources under  their land, unlike in  the movies where                                                                    
someone found  oil on their  land and became rich  off sales                                                                    
(like  in North  Dakota and  other locations).  She stressed                                                                    
that the resources belonged to  the state in Alaska unless a                                                                    
person  had  specific rights  to  the  land, which  was  not                                                                    
common. She  continued that the  Permanent Fund  belonged to                                                                    
the  people.  She  believed   the  legislature  should  have                                                                    
overridden  the  governor's  veto  the  previous  year.  She                                                                    
thought state residents should be  part of the discussion if                                                                    
the dividend amount changed.  She believed government needed                                                                    
to learn to handle its  own funds before they "grab others."                                                                    
She  reiterated   that  the  funds   should  have   gone  to                                                                    
residents.                                                                                                                      
                                                                                                                                
2:43:43 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster MAINTAINED his OBJECTION.                                                                                       
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Tilton, Wilson                                                                                                        
OPPOSED:  Thompson,   Gara,  Grenn,   Guttenberg,  Kawasaki,                                                                    
Ortiz, Pruitt, Foster, Seaton                                                                                                   
                                                                                                                                
The MOTION to adopt Amendment L HSAP 21 FAILED (2/9).                                                                           
                                                                                                                                
2:44:34 PM                                                                                                                    
                                                                                                                                
Representative  Wilson MOVED  to ADOPT  Amendment L  HSAP 22                                                                    
(copy on file):                                                                                                                 
                                                                                                                                
     L H SAP 22 - Fully fund FY18 permanent fund dividend                                                                       
     payment.                                                                                                                   
     Offered by Representative Wilson                                                                                           
     30GH1855U.11                                                                                                               
                                                                                                                                
     See attached language from the Division of Legal and                                                                       
     Research Services. The intent of this amendment is to                                                                      
     fully fund the FY18 permanent fund dividend payment to                                                                     
     eligible recipients.                                                                                                       
                                                                                                                                
Co-Chair Foster OBJECTED for discussion.                                                                                        
                                                                                                                                
Representative  Wilson explained  that  the amendment  would                                                                    
restore full funding for the  FY 18 Permanent Fund Dividend.                                                                    
She detailed that  no legislation had been  passed to change                                                                    
the amount.  She stated  the amount in  the budget  had been                                                                    
chosen  by  someone  else.  She  believed  the  full  amount                                                                    
belonged  to  residents. She  added  that  the full  funding                                                                    
should be  maintained until legislation  made a change  or a                                                                    
vote occurred.                                                                                                                  
                                                                                                                                
Representative Guttenberg  spoke discussed that he  had been                                                                    
present  when  Permanent  Fund votes  had  taken  place.  He                                                                    
shared that  he had  spoken with  various people  around the                                                                    
state and the Capitol Building  who were older and wiser. He                                                                    
elaborated that he  had voted on the issues.  He stated that                                                                    
many people had  reinterpreted their personal recollections.                                                                    
He  recalled that  there had  been a  substantial amount  of                                                                    
money that  needed to be  put away  - otherwise it  would be                                                                    
spent. He detailed that the  initial discussion had not been                                                                    
about a  dividend program,  that the  money would  belong to                                                                    
the  people,  or about  a  sovereign  relationship with  the                                                                    
money and land.  He stated that those items  were all modern                                                                    
arguments.  He   did  not  dispute   the  validity   of  the                                                                    
arguments,  which  he believed  were  valid  for the  people                                                                    
holding the beliefs. He reiterated  that when there had been                                                                    
a  vote  to  create  a Permanent  Fund  that  was  protected                                                                    
constitutionally, the  arguments had  not been  relevant and                                                                    
had  not been  part of  the dialogue.  He recalled  that the                                                                    
conversation had been limited to  putting the money aside in                                                                    
order to  conserve it.  He believed  the objective  had been                                                                    
very successful.                                                                                                                
                                                                                                                                
Representative Pruitt spoke in  support of the amendment. He                                                                    
remarked  that the  amendment seemed  similar  to the  prior                                                                    
amendment,  but  it was  different.  He  detailed there  was                                                                    
existing policy for the "going  forward" piece in one of the                                                                    
bills. He  believed it  needed to be  established in  one of                                                                    
the bills  instead of making  the change within  the budget.                                                                    
He stated  that the long-term  policy would follow  the bill                                                                    
and be  a part  of the  conference committee  discussion. He                                                                    
reiterated  his  belief  that  it  should  be  done  through                                                                    
legislation  (through  the  long-term establishment  of  the                                                                    
stable  revenue   source  the  legislature  was   trying  to                                                                    
establish  for the  Permanent Fund  and other)  and not  the                                                                    
budget process.                                                                                                                 
                                                                                                                                
2:48:39 PM                                                                                                                    
                                                                                                                                
Representative  Wilson provided  wrap up  on the  amendment.                                                                    
She  recommended  asking  residents  what  they  thought  by                                                                    
taking an advisory vote of  the people. She supported asking                                                                    
residents  what they  believed the  fund should  be and  how                                                                    
much the  payoff should be.  She stated "convince  them that                                                                    
essential  government services  have been  whittled down  to                                                                    
where it needs  to be to where they're willing  to give more                                                                    
than  just  the  50/50  that was  brought  up  before."  She                                                                    
explained that  allowing the people  to vote would  mean the                                                                    
legislature  would not  have  to "decide  whether  I have  a                                                                    
different  opinion than  someone else  or someone  else does                                                                    
too."  She  continued that  there  were  many bills  in  the                                                                    
current  process that  addressed  what  the dividend  payout                                                                    
should be.  She supported letting  the bills go  through the                                                                    
process. She elaborated that if  one of the bills passed and                                                                    
it impacted the  budget the change would be  adjusted in the                                                                    
fiscal  notes associated  with the  bill. Alternatively,  if                                                                    
nothing  passed  related to  the  dividend  for the  current                                                                    
year,  the  amount  would  not  change.  She  believed  that                                                                    
putting  the  dividend  payment in  the  budget  would  mean                                                                    
determining the  amount before letting  the process  run its                                                                    
course. She stressed that the  budgetary component was not a                                                                    
policy call -  the policy calls were associated  with all of                                                                    
the  legislation that  allowed Alaskans  to be  part of  the                                                                    
discussion. She  underscored that  the budget did  not allow                                                                    
Alaskans  to be  a  part of  the  discussion. She  supported                                                                    
fully funding the dividend in the current year.                                                                                 
                                                                                                                                
Co-Chair Foster MAINTAINED his OBJECTION.                                                                                       
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Tilton, Wilson, Pruitt                                                                                                
OPPOSED:   Gara,   Grenn,   Guttenberg,   Kawasaki,   Ortiz,                                                                    
Thompson, Seaton, Foster                                                                                                        
                                                                                                                                
The MOTION to adopt Amendment L H SAP 22 FAILED (3/8).                                                                          
                                                                                                                                
2:51:05 PM                                                                                                                    
                                                                                                                                
Representative Pruitt  requested to  hear Amendment L  H SAP                                                                    
23  (copy  on  file)  at   a  later  time.  There  being  NO                                                                    
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
2:51:59 PM                                                                                                                    
                                                                                                                                
Vice-Chair Gara MOVED to ADOPT Amendment  L H FND 3 (copy on                                                                    
file):                                                                                                                          
                                                                                                                                
     Fund Capitalization (no approps out)                                                                                       
     Oil and Gas Tax Credit Fund                                                                                                
     L H  FND 3 - An  additional reduction of $7  million in                                                                    
     oil tax payment, resulting in $30 million payment                                                                          
     Offered by Representative Gara                                                                                             
     30GH1855U.22                                                                                                               
                                                                                                                                
     The state has not fixed  its current budget deficit any                                                                    
     more  sustainably  than  it did  last  year,  and  last                                                                    
     year's appropriation  was $30  million. It  is intended                                                                    
     that when  the state  adopts a sustainable  fiscal plan                                                                    
     and  meets our  constitutional  obligation  to get  the                                                                    
     public maximum benefit from  their oil resources, funds                                                                    
     will  be   available  to   pay  these   accrued  credit                                                                    
     subsidies in  greater amounts. In FY18  it is projected                                                                    
     that paid  oil and  gas production  taxes will  be less                                                                    
     than  oil and  gas credits  generated by  FY18 activity                                                                    
     under current law. This leaves  the state with negative                                                                    
     production tax revenue for FY18.                                                                                           
                                                                                                                                
Representative Wilson OBJECTED.                                                                                                 
                                                                                                                                
Vice-Chair  Gara  stated that  currently  there  was a  very                                                                    
generous oil  tax subsidy  system and a  very small  oil tax                                                                    
production system.  He elaborated that currently  oil fields                                                                    
were either  paying zero percent  or 4  percent as a  tax to                                                                    
the state; however,  there were more oil tax  credits in the                                                                    
current  year than  incoming production  taxes. He  stressed                                                                    
the importance  of fixing the  system. He detailed it  was a                                                                    
debt the state would owe;  therefore, reducing $7 million of                                                                    
the  payment   would  only   increase  the   state's  future                                                                    
obligation. He WITHDREW the amendment.                                                                                          
                                                                                                                                
Vice-Chair Gara MOVED to ADOPT Amendment  L H FND 4 (copy on                                                                    
file):                                                                                                                          
                                                                                                                                
    Regional Education Attendance Area School Fund 1222                                                                         
     L H FND 4 - Restore REAA deposit to FY18 Gov Request                                                                       
     amount                                                                                                                     
     Offered by Representative Gara                                                                                             
     Reference: 30-GH1855U.8.                                                                                                   
                                                                                                                                
     This amendment restores REAA  funding to the Governor's                                                                    
     FY18   amount   of    $40.64   million.   Please   note                                                                    
     corresponding  amendment 30-GH1855U.7  for School  Debt                                                                    
     Reimbursement.                                                                                                             
                                                                                                                                
Representative Wilson OBJECTED.                                                                                                 
                                                                                                                                
Vice-Chair  Gara  explained   the  amendment  contained  the                                                                    
corresponding    restoration   of    funding   for    school                                                                    
construction  and maintenance.  He  referred  to an  earlier                                                                    
amendment  that   had  restored  funding  for   school  debt                                                                    
reimbursement. Amendment L H FND  4 would restore funding in                                                                    
an equivalent percentage  to Regional Educational Attendance                                                                    
Area (REAA) school districts at  the governor's proposed $17                                                                    
million cost.  He noted the  funding matched  the percentage                                                                    
going to urban schools.                                                                                                         
                                                                                                                                
Representative Wilson MAINTAINED her OBJECTION.                                                                                 
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Gara, Grenn, Guttenberg,  Kawasaki, Ortiz, Foster,                                                                    
Seaton                                                                                                                          
OPPOSED: Wilson, Pruitt, Thompson, Tilton                                                                                       
                                                                                                                                
The MOTION  PASSED (7/4). There being  NO further OBJECTION,                                                                    
Amendment L H FND 4 was ADOPTED.                                                                                                
                                                                                                                                
2:54:43 PM                                                                                                                    
                                                                                                                                
Representative Ortiz WITHDREW  Amendment L H FND  5 (copy on                                                                    
file).                                                                                                                          
                                                                                                                                
2:55:04 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:55:47 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Representative Tilton WITHDREW Amendments L  XFR 3 and L XFR                                                                    
4 because  she had received inaccurate  information from the                                                                    
department.                                                                                                                     
                                                                                                                                
2:56:44 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
3:11:51 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Representative Tilton made  clarifying remarks regarding her                                                                    
withdrawn fund  transfer amendments. She had  questioned the                                                                    
balance  and  had  received   the  information  the  current                                                                    
morning related to fund balances  with humble apologies from                                                                    
the  department  about  the previous  incorrect  information                                                                    
provided.   She   underscored   that   legislators   drafted                                                                    
amendments based on information  provided by the department.                                                                    
She  stressed   the  importance  of  the   veracity  of  the                                                                    
information  legislators received.  She emphasized  that the                                                                    
legislature was dealing with the people's money.                                                                                
                                                                                                                                
^AMENMDENTS: ALL REMAINING ITEMS                                                                                              
                                                                                                                                
3:13:43 PM                                                                                                                    
                                                                                                                                
Representative  Wilson  MOVED to  ADOPT  Amendment  H DOA  5                                                                    
(copy on file):                                                                                                                 
                                                                                                                                
     Centralized Administrative Services                                                                                        
     Office of Administrative Hearings                                                                                          
     H DOA 5  - More closely align the FY  18 budget request                                                                    
     with the FY 17 Management Plan.                                                                                            
     Offered by Representative Wilson                                                                                           
                                                                                                                                
     The FY 17  Management Plan has a budget  of $137,000 in                                                                    
     the  Services line  and  the FY  18  budget request  is                                                                    
     $339,100 which is  an increase of $202,100  over the FY                                                                    
     17 Management Plan.  Therefore,  a reduction of $85,400                                                                    
     in  the Services  line is  made to  this allocation  to                                                                    
     more closely align the FY  18 budget request with FY 17                                                                    
     Management Plan and to  delete all unrestricted general                                                                    
     funds (fund  source 1004).  This amendment  is intended                                                                    
     to encourage  the Department to  manage its  own budget                                                                    
     more prudently.                                                                                                            
                                                                                                                                
Co-Chair Foster OBJECTED.                                                                                                       
                                                                                                                                
Representative  Wilson read  from the  amendment description                                                                    
[see above].                                                                                                                    
                                                                                                                                
Representative  Grenn   spoke  against  the   amendment.  He                                                                    
pointed out  that the services  line from the FY  16 actuals                                                                    
was $336,900, which  was more in line with the  FY 18 budget                                                                    
request  of   $339,100.  He   detailed  that   the  increase                                                                    
reflected in  the services  line from  the FY  17 management                                                                    
plan due to  the need to bring the  Office of Administrative                                                                    
Hearings  receipts  on  budget,  thus the  increase  in  the                                                                    
interagency receipt  authority and not UGF.  The current tax                                                                    
at  issue with  some  of  the pending  cases  was over  $100                                                                    
million.  He believed  it would  eliminate the  department's                                                                    
ability to  pursue the  cases if some  of its  personnel was                                                                    
reduced.                                                                                                                        
                                                                                                                                
Representative Wilson provided wrap  up. She agreed that the                                                                    
FY 16 budget was higher than  FY 17. She surmised that FY 17                                                                    
management  did  not think  it  needed  as much  money.  The                                                                    
amendment  would decrease  funds  by $85,000  and would  not                                                                    
make  any reductions  to  personal  services. She  clarified                                                                    
that the  office would continue  to have the same  number of                                                                    
employees. She  elaborated that the budget  was still higher                                                                    
by $202,100. She emphasized that  the $85,000 reduction only                                                                    
applied to the services line of the office's budget.                                                                            
                                                                                                                                
Co-Chair Foster MAINTAINED his OBJECTION.                                                                                       
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Pruitt, Thompson, Tilton, Wilson                                                                                      
OPPOSED: Grenn, Guttenberg, Ortiz, Gara, Seaton, Foster                                                                         
                                                                                                                                
Representative Kawasaki was absent from the vote.                                                                               
                                                                                                                                
The MOTION Amendment H DOA 5 FAILED (4/6).                                                                                      
                                                                                                                                
3:17:57 PM                                                                                                                    
                                                                                                                                
Representative  Wilson  MOVED to  ADOPT  Amendment  H DOA  6                                                                    
(copy on file):                                                                                                                 
                                                                                                                                
     Office of the Commissioner                                                                                                 
     H DOA 6 - Delete one Special Assistant position and                                                                        
     associated costs.                                                                                                          
     Offered by Representative Wilson                                                                                           
                                                                                                                                
     This  amendment deletes  the Special  Assistant to  the                                                                    
     Commissioner  from  the  FY  18  budget  request.  This                                                                    
     reduction  will require  the  Commissioner's Office  to                                                                    
     provide oversight and policy direction in a more                                                                           
     efficient manner with less high level management.                                                                          
                                                                                                                                
Co-Chair Foster OBJECTED.                                                                                                       
                                                                                                                                
Representative  Wilson read  from the  amendment description                                                                    
[see above]. She noted that  the topic had been discussed by                                                                    
the  committee  for  numerous  years.  She  appreciated  the                                                                    
special  assistant,  whose  most  basic job  was  to  answer                                                                    
questions from  the legislature.  In the past  the committee                                                                    
had  been  told  that  the  time it  would  take  to  answer                                                                    
legislators' questions  would be  increased if  the position                                                                    
was eliminated.  She remarked that  legislators may  have to                                                                    
do  more of  their own  research. Given  budget constraints,                                                                    
she believed  it may  be prudent for  legislators to  do the                                                                    
work themselves.                                                                                                                
                                                                                                                                
Representative  Grenn  was  opposed to  the  amendment.  The                                                                    
Department of  Administration commissioner's office  had one                                                                    
special   assistant.  The   position  was   responsible  for                                                                    
tracking  and responding  to any  legislation involving  the                                                                    
department.  He  contended  that without  the  position  the                                                                    
department's   ability   to   answer  questions   from   the                                                                    
legislature  would be  dramatically  reduced. He  referenced                                                                    
Representative   Tilton's  earlier   statements  about   the                                                                    
importance  of  receiving  timely and  accurate  information                                                                    
from  departments. He  believed the  only remaining  general                                                                    
funds  for  the  Office  of  the  Commissioner  budget  were                                                                    
related  to  the fiscal  note  for  SB 74  (Medicaid  reform                                                                    
legislation passed in 2016) and could not be deleted.                                                                           
                                                                                                                                
Representative  Wilson stressed  that  the  funding was  not                                                                    
General Fund  match; it  was $19,500  in general  funds. She                                                                    
explained that  the $123,800  in interagency  receipts meant                                                                    
the department was responding to  other agency requests (not                                                                    
the  legislature).  She  did  not  believe  the  information                                                                    
Representative  Tilton  had  received   had  come  from  the                                                                    
special assistant.  She agreed  that legislators  would have                                                                    
to  wait  longer to  receive  answers  from the  department;                                                                    
however,  at  some point  the  legislature  had to  consider                                                                    
whether the information requests  were mission critical. She                                                                    
stated  the  amendment should  not  pertain  to funding  the                                                                    
department  already  had because  it  was  not matched.  She                                                                    
referred  to  the  $123,800   in  interagency  receipts  and                                                                    
wondered what it was that  other departments actually needed                                                                    
fulfilled.                                                                                                                      
                                                                                                                                
Co-Chair Foster MAINTAINED his OBJECTION                                                                                        
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Pruitt, Thompson, Tilton, Wilson                                                                                      
OPPOSED: Guttenberg, Ortiz, Gara, Grenn, Foster, Seaton                                                                         
                                                                                                                                
Representative Kawasaki was absent from the vote.                                                                               
                                                                                                                                
The MOTION to adopt Amendment H DOA 6 FAILED (4/6).                                                                             
                                                                                                                                
3:22:12 PM                                                                                                                    
                                                                                                                                
Representative Wilson  WITHDREW Amendment  H DOA 7  (copy on                                                                    
file).                                                                                                                          
                                                                                                                                
3:22:30 PM                                                                                                                    
                                                                                                                                
Representative  Wilson  MOVED to  ADOPT  Amendment  H DOA  8                                                                    
(copy on file):                                                                                                                 
                                                                                                                                
     Finance                                                                                                                    
     H DOA  8 -  Delete funds for  positions deleted  by the                                                                    
     Department with no funding reduction.                                                                                      
     Offered by Representative Wilson                                                                                           
                                                                                                                                
     The  Department deleted  16  positions associated  with                                                                    
     the  statewide  accounting  system and  the  Integrated                                                                    
     Resource Information  system as this project  is now in                                                                    
     the stabilization  phase. CIP receipts  associated with                                                                    
     the  positions  were  deleted,  however  the  positions                                                                    
     deleted were partially funded  with general funds which                                                                    
     were not  deleted.  This amendment  deletes the general                                                                    
     funds  associated  with  the positions  that  were  not                                                                    
     deleted by the Department in the FY 18 budget request.                                                                     
                                                                                                                                
Co-Chair Foster OBJECTED.                                                                                                       
                                                                                                                                
Representative  Wilson read  the amendment  description [see                                                                    
above].                                                                                                                         
                                                                                                                                
Representative Grenn  spoke in opposition to  the amendment.                                                                    
He understood  from his  work with  the department  that the                                                                    
funding  for  the positions  had  already  been deleted.  He                                                                    
detailed  that  the department  had  hoped  funding for  the                                                                    
positions could  be found through  DGF, but it had  not been                                                                    
realized.  The department  had removed  the positions  after                                                                    
realizing  funding  was  not  available  going  forward.  He                                                                    
explained that  eliminating the UGF funding  would result in                                                                    
cutting different  operating positions currently  filled and                                                                    
providing support to the statewide administrative services.                                                                     
                                                                                                                                
Representative  Wilson provided  wrap up  on the  amendment.                                                                    
She  stressed the  capital improvement  project funding  had                                                                    
been removed,  but the general  funds had not.  She inferred                                                                    
that  if the  department  was spending  the  funds on  other                                                                    
positions perhaps  it was due to  contractual agreements and                                                                    
paying  extra.  She  underscored  that the  funding  in  the                                                                    
amendment had  been designated for  positions that  had been                                                                    
deleted. She continued  the funds were in the  budget and it                                                                    
was  clear where  the CIP  amounts had  been taken  out. She                                                                    
emphasized  that  no general  funds  had  been removed.  She                                                                    
surmised  the department  could  be using  the $398,000  for                                                                    
something  else;   however,  she  believed   the  associated                                                                    
funding  with  deleted positions  needed  to  be deleted  as                                                                    
well.                                                                                                                           
                                                                                                                                
Co-Chair Foster MAINTAINED his OBJECTION.                                                                                       
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Pruitt, Thompson, Tilton, Wilson                                                                                      
OPPOSED: Ortiz, Gara, Grenn, Guttenberg, Seaton, Foster                                                                         
                                                                                                                                
Representative Kawasaki was absent from the vote.                                                                               
                                                                                                                                
The MOTION to adopt Amendment H DOA 8 FAILED (4/6).                                                                             
                                                                                                                                
3:25:10 PM                                                                                                                    
                                                                                                                                
Representative  Wilson  MOVED to  ADOPT  Amendment  H DOA  9                                                                    
(copy on file):                                                                                                                 
                                                                                                                                
     H DOA  9 -  Delete funds for  positions deleted  by the                                                                    
     Department with no funding reduction.                                                                                      
     Offered by Representative Wilson                                                                                           
                                                                                                                                
     The  Department deleted  four  vacant Business  Analyst                                                                    
     positions and  one part-time college  intern associated                                                                    
     with   the   statewide   accounting  system   and   the                                                                    
     Integrated Resource Information  system as this project                                                                    
     is  now  in  the stabilization  phase.  This  amendment                                                                    
     deletes   the  general   funds   associated  with   the                                                                    
     positions that were not deleted by the Department in                                                                       
     the FY 18 budget request.                                                                                                  
                                                                                                                                
Vice-Chair Gara OBJECTED.                                                                                                       
                                                                                                                                
Representative  Wilson remarked  that she  would assume  the                                                                    
budget books received by the  legislature were accurate. She                                                                    
stated that she would not  say the department was saying one                                                                    
thing and  the books said something  different. She referred                                                                    
to a  conversation about FY  16 and stated "maybe  the books                                                                    
lie." She  stressed that  all the committee  had to  rely on                                                                    
was the  budget documents  received. She read  the amendment                                                                    
description  [see above].  She  relayed  that the  amendment                                                                    
would delete $36,100 in general funds.                                                                                          
                                                                                                                                
Representative Grenn spoke against  the amendment. He shared                                                                    
his understanding after speaking  to the department that the                                                                    
positions had been  deleted in the 2017  management plan. He                                                                    
elucidated that  the position funding had  already been cut;                                                                    
the  actual PCNs  [position  control  numbers] were  deleted                                                                    
after  the  department realized  the  funds  were no  longer                                                                    
available. He suggested hearing from DOA on the issue.                                                                          
                                                                                                                                
Co-Chair  Seaton noted  the committee  would not  be hearing                                                                    
from the department.                                                                                                            
                                                                                                                                
Representative  Wilson  emphasized  that  the  budget  books                                                                    
showed  the positions  as deleted  for four  vacant business                                                                    
analysts  and one  part-time college  intern. She  continued                                                                    
that the  books also  showed the other  funds as  a negative                                                                    
number and nothing had been  listed under general funds. She                                                                    
noted it  was necessary to look  at the details in  the book                                                                    
and at  the prior year  to determine the funding  amount for                                                                    
the positions to determine what  they had been paid. She did                                                                    
not  want to  accuse someone  of being  untruthful, but  she                                                                    
believed  the books  and the  department could  not both  be                                                                    
correct. She  stressed that the  FY 18 budget books  did not                                                                    
delete the $36,100.                                                                                                             
                                                                                                                                
Vice-Chair Gara MAINTAINED his OBJECTION.                                                                                       
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Pruitt, Thompson, Tilton, Wilson                                                                                      
OPPOSED: Ortiz, Gara, Grenn, Guttenberg, Foster, Seaton                                                                         
                                                                                                                                
Representative Kawasaki was absent from the vote.                                                                               
                                                                                                                                
The MOTION to adopt Amendment H DOA 9 FAILED (4/6).                                                                             
                                                                                                                                
3:28:49 PM                                                                                                                    
                                                                                                                                
Representative  Wilson MOVED  to  ADOPT Amendment  H DOA  11                                                                    
(copy on file):                                                                                                                 
                                                                                                                                
     Personnel                                                                                                                  
     H DOA 11 - Funding reduction to eliminate increase in                                                                      
     Personal Services.                                                                                                         
     Offered by Representative Wilson                                                                                           
                                                                                                                                
     Four  positions  were  deleted  from  this  allocation,                                                                    
     however, the  Personal Services line item  increased by                                                                    
     $295,900 between the  FY 17 Management Plan  and the FY                                                                    
     18  budget  request.   This  amendment  eliminates  the                                                                    
     increase in  the Personal Services  line item  from the                                                                    
     FY 18 budget request.                                                                                                      
                                                                                                                                
Co-Chair Foster OBJECTED.                                                                                                       
                                                                                                                                
Representative  Wilson read  from the  amendment description                                                                    
[see above].                                                                                                                    
                                                                                                                                
Representative  Grenn   spoke  against  the   amendment.  He                                                                    
relayed  that  the  Division  of  Personnel  had  cut  three                                                                    
positions,  none of  which were  associated UGF.  The fourth                                                                    
position referenced  in the  amendment had  been transferred                                                                    
to the  shared services  organization within  the department                                                                    
for  accounting   services.  He  detailed  that   given  the                                                                    
positions did not have associated  UGF, there had not been a                                                                    
decrease in workload and eliminating  the funds would result                                                                    
in  the elimination  of other  positions  and a  significant                                                                    
reduction in service level.                                                                                                     
                                                                                                                                
Representative    Pruitt    did    not    understand    what                                                                    
Representative Grenn had said.                                                                                                  
                                                                                                                                
Representative   Grenn    explained   that   it    was   his                                                                    
understanding that  the Division of Personnel  had cut three                                                                    
positions,  none of  which had  associated  UGF. The  fourth                                                                    
position  referenced  by the  amendment  was  a transfer  to                                                                    
shared  services   within  the  department   for  accounting                                                                    
services.  Given that  the  positions did  not  cut UGF  and                                                                    
there  had  not been  a  decrease  in  the workload  of  the                                                                    
division,  eliminating   the  funds  would  result   in  the                                                                    
elimination of other positions.                                                                                                 
                                                                                                                                
3:31:52 PM                                                                                                                    
                                                                                                                                
Representative  Thompson stated  it got  confusing that  the                                                                    
subcommittees had not been able  to address individual PCNs.                                                                    
He believed there had been no  way of having a pure question                                                                    
and  answer scenario  with the  departments or  of obtaining                                                                    
real figures  to go  off of. He  thought the  budget process                                                                    
was flawed.  He wanted to  know whether three  positions had                                                                    
been eliminated. He wondered why  there had been an increase                                                                    
to  the  personnel  services  line   of  $295,000  from  the                                                                    
previous year. He thought the two things were incongruent.                                                                      
                                                                                                                                
Vice-Chair  Gara asked  whether  the  amendment sponsor  had                                                                    
spoken with the department to  determine what the funds were                                                                    
being used  for and what  would happen to the  department if                                                                    
the deletion occurred.                                                                                                          
                                                                                                                                
Representative Wilson answered that  she had not spoken with                                                                    
the  department. She  detailed that  the department  had cut                                                                    
three  positions.  The  fourth  position had  been  cut  and                                                                    
transferred to  another area. There  were four  fewer people                                                                    
in the division, yet it  had increased personnel services by                                                                    
$295,900. She emphasized that the  amendment did not cut any                                                                    
positions. She  did not believe  she should have to  talk to                                                                    
the department.  She stressed that  the budget  books should                                                                    
show  if  positions  were  taken  out  of  the  budget.  She                                                                    
explained that  FY 17 showed the  positions; whether funding                                                                    
had come  from UGF,  federal funds, or  other; and  how much                                                                    
the positions  made. She  reasoned that  whether or  not the                                                                    
positions had  been paid  with UGF  funding, the  amount was                                                                    
increasing and  the number of  people was not.  She believed                                                                    
there  should  be  an explanation  for  the  increase  (e.g.                                                                    
contracts increased)  and that  the same increase  should be                                                                    
seen in  all of the  other allocations. She  elaborated that                                                                    
the growth had  not been seen in personal  services as shown                                                                    
in  the proposed  budget. She  noted that  funding had  been                                                                    
cut,  but the  department  had not  cut  the specific  funds                                                                    
targeted  by  the  amendment.  She   was  not  claiming  the                                                                    
department  was  not using  the  funds  for something  else;                                                                    
however,  less  people  would mean  lower  payroll  in  most                                                                    
businesses.  There were  fewer people  in the  division, yet                                                                    
the state was paying more  for the existing positions, which                                                                    
did not make  sense to her. She acknowledged there  may be a                                                                    
difference between  looking at the  book and talking  to the                                                                    
department;  however,  she  believed the  two  conversations                                                                    
should match up.                                                                                                                
                                                                                                                                
3:35:44 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
3:39:50 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Foster MAINTAINED his OBJECTION.                                                                                       
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Pruitt, Thompson, Tilton, Wilson                                                                                      
OPPOSED: Gara, Grenn, Guttenberg, Ortiz, Seaton, Foster                                                                         
                                                                                                                                
Representative Kawasaki was absent from the vote.                                                                               
                                                                                                                                
The MOTION Amendment H DOA 11 FAILED (4/6).                                                                                     
                                                                                                                                
3:40:39 PM                                                                                                                    
                                                                                                                                
Representative  Wilson MOVED  to  ADOPT Amendment  H DOA  12                                                                    
(copy on file):                                                                                                                 
                                                                                                                                
     Labor Relations                                                                                                            
     H DOA 12 - Delete funding for position deleted by the                                                                      
     Department with no funding reduction.                                                                                      
     Offered by Representative Wilson                                                                                           
                                                                                                                                
     The  Department  deleted   a  Labor  Relations  Analyst                                                                    
     position in  the FY 18 budget  request, however deleted                                                                    
     no   funding  associated   with   the  position.   This                                                                    
     amendment  deletes the  FY 2017  budgeted  cost of  the                                                                    
     position.                                                                                                                  
                                                                                                                                
Vice-Chair Gara OBJECTED.                                                                                                       
                                                                                                                                
Representative  Wilson read  the amendment  description [see                                                                    
above]. She added that the  budgeted cost of the position to                                                                    
be deleted was $185,100.                                                                                                        
                                                                                                                                
Representative  Grenn  did  not support  the  amendment.  He                                                                    
addressed  his  remarks to  the  current  and other  similar                                                                    
previous  amendments. The  Department of  Administration had                                                                    
an  unallocated  reduction  of  $1.216  million  in  FY  17,                                                                    
necessitating   adjustments   to   the  positions   by   the                                                                    
department to  manage the reduction.  He explained  that the                                                                    
relations analyst  position had  been deleted  in the  FY 18                                                                    
governor's budget request as the  position was vacant due to                                                                    
lack  of  funding   (a  result  of  previous   cuts  to  the                                                                    
division). Currently  all positions  within the  Division of                                                                    
Labor  Relations  were  filled; eliminating  the  UGF  would                                                                    
result in cutting existing positions.                                                                                           
                                                                                                                                
Vice-Chair  Gara  concurred  with Representative  Grenn.  He                                                                    
underscored  that the  past several  amendments  would be  a                                                                    
double cut to  the department. He detailed  that the funding                                                                    
had already  received an unallocated  cut and  positions had                                                                    
been deleted.  The amendments would  cut the same  amount of                                                                    
funding a second  time and would delete more  money than the                                                                    
positions cost.                                                                                                                 
                                                                                                                                
Representative Wilson provided wrap  up. She stated that the                                                                    
details  addressed unallocated  costs and  deleted positions                                                                    
with  associated funding.  She continued  that whatever  the                                                                    
reason the items  had been defunded, the  details were shown                                                                    
in  the budget.  She elaborated  on the  budget details  and                                                                    
explained the  books showed whether  not a position  went to                                                                    
shared  services   or  transferred   a  position   from  one                                                                    
allocation to  another. She noted that  sometimes the budget                                                                    
listed a  position without the  money. She  underscored that                                                                    
the book  did not show  the [labor analyst] position  as not                                                                    
being funded, which  is where it should be.  She looked very                                                                    
closely to  determine where the positions  had been deleted.                                                                    
She  had observed  that  a  portion of  the  money had  been                                                                    
deleted for  other positions. She stressed  that departments                                                                    
were not being consistent,  which was causing confusion. She                                                                    
had  found that  money had  been attached  to the  [analyst]                                                                    
position for 2017; the position  had been deleted for FY 18,                                                                    
but the associated funding had not been deleted.                                                                                
                                                                                                                                
Vice-Chair Gara MAINTAINED his OBJECTION.                                                                                       
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Thompson, Tilton, Wilson, Pruitt                                                                                      
OPPOSED: Gara, Grenn, Guttenberg, Ortiz, Foster, Seaton                                                                         
                                                                                                                                
Representative Kawasaki was absent from the vote.                                                                               
                                                                                                                                
The MOTION to adopt Amendment H DOA 12 FAILED (4/6).                                                                            
                                                                                                                                
3:45:51 PM                                                                                                                    
                                                                                                                                
Representative  Wilson MOVED  to  ADOPT Amendment  H DOA  13                                                                    
(copy on file):                                                                                                                 
                                                                                                                                
     H DOA 13 - Funding reduction of one PFT position and                                                                       
     related costs.                                                                                                             
     Offered by Representative Wilson                                                                                           
                                                                                                                                
     This amendment  deletes a  Labor Analyst  position from                                                                    
     the  FY  18  budget  request.  This  will  require  the                                                                    
     Department to  redistribute the work load  to remaining                                                                    
     staff  and  to be  more  efficient  in providing  labor                                                                    
     relation services.                                                                                                         
                                                                                                                                
Co-Chair Foster OBJECTED.                                                                                                       
                                                                                                                                
Representative  Wilson read  from the  amendment description                                                                    
[see above].                                                                                                                    
                                                                                                                                
Representative Grenn  spoke in opposition to  the amendment.                                                                    
He  detailed  there  were   currently  six  labor  relations                                                                    
analysts  on  staff  who processed  grievances,  interpreted                                                                    
contracts  covering  the  15,000-plus state  employees,  and                                                                    
negotiated collective  bargaining agreements on  the state's                                                                    
behalf (6 out of 11  agreements were currently in progress).                                                                    
He believed a reduction in  staff would mean the state would                                                                    
need to  hire a contractor,  which would be  more expensive.                                                                    
He  concluded that  eliminating the  position would  lead to                                                                    
increased costs.                                                                                                                
                                                                                                                                
Representative  Wilson  opined that  frequently  contractors                                                                    
were more  efficient and cost-effective. She  believed there                                                                    
had  not  been  any  study   conducted  on  the  issue.  She                                                                    
requested to  see the information  if it was  available. She                                                                    
surmised that if everyone took  a small amount it would mean                                                                    
things could be streamlined versus  taking large cuts out of                                                                    
one department or another.                                                                                                      
                                                                                                                                
Co-Chair Foster MAINTAINED his OBJECTION.                                                                                       
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Tilton, Wilson, Pruitt, Thompson                                                                                      
OPPOSED: Gara, Grenn, Guttenberg, Ortiz, Seaton, Foster                                                                         
                                                                                                                                
Representative Kawasaki was absent from the vote.                                                                               
                                                                                                                                
The MOTION to adopt Amendment H DOA 13 FAILED (4/6).                                                                            
                                                                                                                                
3:48:28 PM                                                                                                                    
                                                                                                                                
Representative  Wilson MOVED  to  ADOPT Amendment  H DOA  18                                                                    
(copy on file):                                                                                                                 
                                                                                                                                
     Office of Information Technology                                                                                           
     State of Alaska Telecommunications System                                                                                  
     H DOA  18 -  Align FY18  personal services  budget with                                                                    
    previous expenditures and delete all overtime pay.                                                                          
     Offered by Representative Wilson                                                                                           
                                                                                                                                
     FY  16 actual  expenditures  in  the Personal  Services                                                                    
     line item were $2,631,100. The  FY 18 budget request is                                                                    
     $3,035,500  for  this line  item  which  results in  an                                                                    
     increase of  $404,400 over  FY 16  actual expenditures.                                                                    
     This  amendment reduces  the FY  18 budget  request for                                                                    
     the  Personal Services  line item  by $404,400  in this                                                                    
     allocation to  align the FY  18 budget request  with FY                                                                    
     16 actual expenditures.                                                                                                    
                                                                                                                                
     There is  a small amount  of premium pay,  ranging from                                                                    
     $100 to  $19,000, budgeted for nearly  all positions in                                                                    
     this allocation.   This amendment eliminates  the total                                                                    
     amount  of  premium  pay  in  the  amount  of  $144,486                                                                    
     included  in  the  FY   18  budget  request.  Declining                                                                    
     revenues  dictate that  overtime hours  be reduced  and                                                                    
     that  state services  be provided  in a  more efficient                                                                    
     and effective manner.                                                                                                      
                                                                                                                                
     These   reductions  are   intended  to   encourage  the                                                                    
    Department to manage its own budget more prudently.                                                                         
                                                                                                                                
Co-Chair Foster OBJECTED.                                                                                                       
                                                                                                                                
Representative  Wilson explained  that  the amendment  would                                                                    
take $548,900 from the General  Fund. She read the amendment                                                                    
description [see above].                                                                                                        
                                                                                                                                
Representative Grenn spoke against  the amendment. He stated                                                                    
that the amendment dealt  with the telecommunications system                                                                    
that provided  24/7 backup to the  state's first responders,                                                                    
which  was  a critical  state  service.  He thought  it  was                                                                    
probably not the  best to look at  year-to-year division due                                                                    
to the  wide fluctuations  based on  services, not  on needs                                                                    
from  year-to-year. He  did not  believe any  cuts could  be                                                                    
made to the service at the present time.                                                                                        
                                                                                                                                
Vice-Chair  Gara understood  how  hard it  was  to write  an                                                                    
amendment. He understood  Representative Wilson worked hard.                                                                    
However, in looking for efficiencies  it was not possible to                                                                    
just read a  book and not speak to anyone.  It would be more                                                                    
compelling  to  him  to  learn   she  had  spoken  with  the                                                                    
department.                                                                                                                     
                                                                                                                                
Representative Guttenberg  agreed it  was not easy  to write                                                                    
budget  amendments,   especially  decrements.   However,  he                                                                    
emphasized  the  importance of  knowing  the  impact of  the                                                                    
amendment  when making  a reduction.  He discussed  that the                                                                    
amendment    pertained     to    first     responders    and                                                                    
telecommunication systems.  He questioned the impact  of the                                                                    
proposed cut.                                                                                                                   
                                                                                                                                
Representative   Pruitt  mentioned   Representative  Grenn's                                                                    
comment  related to  fluctuations  [based  on services].  He                                                                    
asked whether  another year would  work if the  current year                                                                    
did  not. He  thought  the amendment  sponsor  was making  a                                                                    
point that there were [budget]  actuals compared to what had                                                                    
been  appropriated.  He  wondered  if there  was  reason  to                                                                    
believe  the $3  million was  needed. He  wondered if  costs                                                                    
were all  below that  number. He  thought perhaps  there was                                                                    
another number  to use besides  the $548,900  (e.g. $300,000                                                                    
or the average  of a couple of numbers).  He believed merely                                                                    
writing off the idea because  the numbers fluctuated did not                                                                    
take into  consideration the fact  that the  legislature was                                                                    
funding   something  higher   than  a   previous  year.   He                                                                    
elaborated  that the  most recent  year with  actual numbers                                                                    
available showed there  had not necessarily been  a need for                                                                    
the  entire appropriation.  He reasoned  that the  committee                                                                    
could  have had  the conversation  earlier, but  it had  not                                                                    
occurred.                                                                                                                       
                                                                                                                                
3:55:49 PM                                                                                                                    
                                                                                                                                
Representative  Wilson provided  wrap up  on the  amendment.                                                                    
She  stated that  she found  it interesting  the legislature                                                                    
was  not supposed  to look  at the  increment from  year-to-                                                                    
year. She countered that building  a budget required looking                                                                    
from year-to-year. She emphasized  that the budget books had                                                                    
been  put out  for a  reason and  included the  departments'                                                                    
mission,  accomplishments, challenges,  and components.  She                                                                    
remarked  that  she  had  tried  asking  questions  on  each                                                                    
component back in December [2016]  and was still waiting for                                                                    
answers. She  agreed that "in  a real world" talking  to the                                                                    
department would  not hurt.  She stressed  that she  was not                                                                    
going to  look at budgets back  to 2010. She asked  what the                                                                    
state had  not been doing in  FY 16 that was  critical in FY                                                                    
18  at   a  total   increase  of  $548,900.   She  addressed                                                                    
fluctuation and wondered  what had made it  grow by $500,000                                                                    
in a  year. She wondered  what had changed that  resulted in                                                                    
such a substantial growth. She  believed the increase should                                                                    
mean   something  like   a   telecommunications  tower   had                                                                    
collapsed or  new people  would need to  be hired  because a                                                                    
new grant  was received that required  significant work. She                                                                    
spoke  about budgeting.  She had  not seen  anything showing                                                                    
the  office had  not  been  able to  meet  its mission.  She                                                                    
underscored that  the biggest difference  between FY  16 and                                                                    
FY  18 was  $548,900. She  was not  sure the  department had                                                                    
even addressed the  increase. She had seen  that the numbers                                                                    
were inflated until  the real numbers came  in; it sometimes                                                                    
made  departments look  like they  were spending  more money                                                                    
than they really were. She  reiterated the importance of the                                                                    
budget books.                                                                                                                   
                                                                                                                                
Co-Chair Foster MAINTAINED his OBJECTION.                                                                                       
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Wilson, Pruitt, Thompson, Tilton                                                                                      
OPPOSED: Gara,  Grenn, Guttenberg, Kawasaki,  Ortiz, Foster,                                                                    
Seaton                                                                                                                          
                                                                                                                                
The MOTION to adopt Amendment H DOA 18 FAILED (4/7).                                                                            
                                                                                                                                
4:00:04 PM                                                                                                                    
                                                                                                                                
Representative  Tilton MOVED  to  ADOPT Amendment  H DOA  19                                                                    
(copy on file):                                                                                                                 
                                                                                                                                
     Public Communications Services                                                                                             
     Public Broadcasting - T.V.                                                                                                 
     H DOA 19 - Decrease to TV public broadcasting                                                                              
     Offered by Representative Tilton                                                                                           
                                                                                                                                
     10 percent reduction                                                                                                       
                                                                                                                                
     (Page 4, line 12 - 30-GH1855A)                                                                                             
                                                                                                                                
Representative Ortiz and Co-Chair Foster OBJECTED.                                                                              
                                                                                                                                
Representative Tilton explained  the amendment. She believed                                                                    
that public  communications services (radio  and television)                                                                    
were  always in  legislators'  sights when  it  came to  the                                                                    
budget.  She reasoned  that it  was not  because legislators                                                                    
did not support  the programming. She posed  the question as                                                                    
to  whether  public  broadcasting television  constituted  a                                                                    
constitutionally  mandated  core   service  and  whether  it                                                                    
should  be   paid  for  by   the  state.  She   referred  to                                                                    
substantial public testimony from  across the state, some of                                                                    
which was  in favor of  the services. However,  she believed                                                                    
there  had not  been  testimony about  what  portion of  the                                                                    
stations'  budget  was  funded  by  the  state  compared  to                                                                    
private  donation. She  concluded it  was difficult  to make                                                                    
budget  decisions   without  having  the   information.  The                                                                    
amendment would not completely  eliminate funding for public                                                                    
broadcasting in  order to give  the stations time  to adjust                                                                    
to the reduction.                                                                                                               
                                                                                                                                
Representative Grenn  spoke in opposition to  the amendment.                                                                    
He   indicated  that   since  FY   15  public   broadcasting                                                                    
television  had  undergone a  23.3  percent  cut in  general                                                                    
funds. He  detailed the budget  subcommittee had  heard from                                                                    
several  stations  across  the  state,  all  of  which  were                                                                    
opposed  to   further  cuts.   The  stations   had  provided                                                                    
information about their state  funds during public testimony                                                                    
that ranged  from 10  to 20  percent. He  believed committee                                                                    
members  had  been impressed  by  the  low number.  He  also                                                                    
thought public  broadcasting had  done a great  job rallying                                                                    
private support  to make up  for cuts to state  funding that                                                                    
had occurred  in the  past several  years. He  detailed that                                                                    
public  broadcasting  provided   vital  information  to  the                                                                    
entire state  - it was  the only  source of service  in many                                                                    
areas.  He believed  eliminating such  a strong  vehicle for                                                                    
communication was not a prudent course of action.                                                                               
                                                                                                                                
Representative   Tilton  questioned   what  the   state  was                                                                    
supposed  to  provide as  a  government.  She spoke  to  the                                                                    
state's  deficit   and  the  need  to   fill  public  safety                                                                    
necessities,  troopers, education,  and other  services. She                                                                    
expounded that the amendment  would give public broadcasting                                                                    
time  to increase  private funding  and find  other ways  to                                                                    
support the services.                                                                                                           
                                                                                                                                
Co-Chair Foster MAINTAINED his OBJECTION.                                                                                       
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Pruitt, Thompson, Tilton, Wilson                                                                                      
OPPOSED: Gara,  Grenn, Guttenberg, Kawasaki,  Ortiz, Foster,                                                                    
Seaton                                                                                                                          
                                                                                                                                
The MOTION to adopt Amendment H DOA 19 FAILED (4/7).                                                                            
                                                                                                                                
4:04:47 PM                                                                                                                    
                                                                                                                                
Representative  Wilson MOVED  to  ADOPT Amendment  H DOA  20                                                                    
(copy on file):                                                                                                                 
                                                                                                                                
     Satellite Infrastructure                                                                                                   
     H DOA 20 - Grants Reduction                                                                                                
     Offered by Representative Wilson                                                                                           
                                                                                                                                
     This amendment  makes a reduction of  $100,000 from the                                                                    
     FY  18  budget  request  in  the  Grants  line.  FY  17                                                                    
     Authorized was  $92.2 and by  reducing FY 18  grants it                                                                    
     more closely  aligns with FY 17  Authorized and leaving                                                                    
     $60.0 in this allocation.                                                                                                  
                                                                                                                                
Co-Chair Foster OBJECTED.                                                                                                       
                                                                                                                                
Representative  Wilson read  the amendment  description [see                                                                    
above].                                                                                                                         
                                                                                                                                
Representative  Grenn   spoke  against  the   amendment.  He                                                                    
indicated   that  the   amendment  tied   to  the   previous                                                                    
amendment.  He  discussed  that   the  department  had  been                                                                    
working  hard   to  bring  the   cost  down   for  satellite                                                                    
infrastructure.  He  detailed  that the  infrastructure  was                                                                    
critical to  the delivery  of audio  and video  news, public                                                                    
affairs,   legislative   and    state   government   content                                                                    
education,  community emergency  alert  services, and  rural                                                                    
Alaskan  communities.  The  historic funding  for  satellite                                                                    
infrastructure had been around  $160,000 including the FY 16                                                                    
actuals  - it  was also  the proposed  amount in  the FY  18                                                                    
budget.                                                                                                                         
                                                                                                                                
Representative   Guttenberg    highlighted   that   critical                                                                    
emergency  management  needs  went  over  various  satellite                                                                    
systems.  He  spoke  of the  critical  emergency  management                                                                    
needs  using  various  satellite  systems.  He  referred  to                                                                    
numerous  telecommunications issues,  the  increased use  of                                                                    
satellite  and broadband,  and other.  He wondered  what the                                                                    
$100,000 reduction  represented in a policy  call aside from                                                                    
a  budget  reduction.  He  questioned   how  much  time  the                                                                    
reduction would mean  the satellites would be  down and what                                                                    
would  be  put at  risk.  He  did  not support  making  cuts                                                                    
without  understanding  the  impact. He  stressed  that  the                                                                    
state relied  on the infrastructure. He  was concerned about                                                                    
trying to  make a value judgement  without understanding the                                                                    
impacts a reduction would have.                                                                                                 
                                                                                                                                
Representative Wilson  thought the value judgment  should be                                                                    
about whether  the state should  be providing  the services.                                                                    
She  suggested  there  may  be  other  entities  that  could                                                                    
partner  to  provide  the  service.   She  stated  the  most                                                                    
successful  programs  involved private/public  partnerships;                                                                    
however,  she  stressed  those  partnerships  would  not  be                                                                    
encouraged if the state continued  to fund everything at 100                                                                    
percent. She stressed that the  discussion was about budget.                                                                    
She  questioned  whether  other  funding  options  had  been                                                                    
explored and  why government had  taken the service  over in                                                                    
the  first  place.  She  reasoned   that  it  was  sometimes                                                                    
difficult  to  make  the   distinction  between  budget  and                                                                    
policy,   which   frequently  intertwined.   She   suggested                                                                    
spreading  out  the pain  in  small  amounts throughout  the                                                                    
budget  in order  to avoid  devastating  impacts on  various                                                                    
entities.                                                                                                                       
                                                                                                                                
Co-Chair Foster MAINTAINED his OBJECTION.                                                                                       
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Pruitt, Thompson, Tilton, Wilson                                                                                      
OPPOSED: Grenn, Guttenberg, Ortiz, Gara, Seaton, Foster                                                                         
                                                                                                                                
Representative Kawasaki was absent from the vote.                                                                               
                                                                                                                                
The MOTION to adopt Amendment H DOA 20 FAILED (4/6).                                                                            
                                                                                                                                
Representative  Wilson WITHDREW  Amendments H  DOA 22  and H                                                                    
DOA 23 (copy on file).                                                                                                          
                                                                                                                                
Representative  Wilson MOVED  to  ADOPT Amendment  H DOA  24                                                                    
(copy on file):                                                                                                                 
                                                                                                                                
     Alaska Public Offices Commission                                                                                           
     H DOA 24 - Delete funding for positions deleted by the                                                                     
     Department with no funding reduction.                                                                                      
     Offered by Representative Wilson                                                                                           
                                                                                                                                
     The  Department  deleted two  positions  in  the FY  18                                                                    
     budget  request without  taking  funding reductions  in                                                                    
     the  Personal  Services  line item  for  the  positions                                                                    
     deleted.  The  FY  2017 budgeted  cost  for  these  two                                                                    
     positions  was  $128,700.  This amendment  deletes  the                                                                    
     funding that was budgeted for these positions.                                                                             
                                                                                                                                
Co-Chair Foster OBJECTED for discussion.                                                                                        
                                                                                                                                
Representative  Wilson read  the amendment  description [see                                                                    
above].                                                                                                                         
                                                                                                                                
Representative Grenn  spoke in opposition to  the amendment.                                                                    
He  explained  that  the Alaska  Public  Offices  Commission                                                                    
(APOC) had left  the positions vacant in an  attempt to find                                                                    
other  funding  sources.  Since  2015 APOC  had  seen  a  42                                                                    
percent reduction in  its budget and had  deleted six vacant                                                                    
positions,  making  it  more difficult  for  the  agency  to                                                                    
fulfill its  mission. The agency's mission  was to encourage                                                                    
the  public's  confidence  in   its  elected  and  appointed                                                                    
officials. He  believed deleting  an additional  $128,000 in                                                                    
UGF  from personal  services would  mean the  elimination of                                                                    
another position.  He underscored the critical  service APOC                                                                    
provided as the public's watchdog.                                                                                              
                                                                                                                                
Representative  Thompson  stated  that  the  amendment  went                                                                    
"back  to the  process,  and  we're in  the  process at  the                                                                    
present  time." He  noted some  positions had  been deleted,                                                                    
which he  was glad to see.  He continued that over  the past                                                                    
several years  the subcommittees  had looked at  PCNs, which                                                                    
had  not been  allowed  during the  process  in the  current                                                                    
year.  He elaborated  that  in the  past  the Department  of                                                                    
Transportation  and   Public  Facilities   subcommittee  had                                                                    
looked back  five years  to identify  five or  six positions                                                                    
that  had not  been filled  in five  years. He  detailed the                                                                    
agency had been  using the money allocated  to the positions                                                                    
wherever it  wanted (e.g.  for overtime  pay and  other). He                                                                    
furthered  that  subcommittees  had   not  been  allowed  to                                                                    
question the  department or go  after those type  of things.                                                                    
He felt like  the [subcommittee] system was  flawed and that                                                                    
the committee had not done its job.                                                                                             
                                                                                                                                
4:13:00 PM                                                                                                                    
                                                                                                                                
Co-Chair  Seaton  reminded  members  that  departments  were                                                                    
required to maintain a certain  vacancy factor; therefore if                                                                    
UGF  was  cut, it  meant  a  cut  would  occur to  a  filled                                                                    
position.  He  noted  the  vacancy  factors  varied  between                                                                    
departments   -  the   vacancies  were   needed  to   enable                                                                    
departments to  hire people when  they got the  funding. The                                                                    
vacancy factors were critical to  the way funding worked for                                                                    
personal line items.                                                                                                            
                                                                                                                                
Representative  Thompson  stated  that positions  that  were                                                                    
intentionally left empty  for three to five  years would not                                                                    
be filled, but  the state had been funding them.  He did not                                                                    
disagree  with  the  remarks  made  by  Co-Chair  Seaton  in                                                                    
relation  to   positions  that  had  not   been  funded  the                                                                    
preceding  year, but  should be  filled.  He continued  that                                                                    
amendments did  not propose to eliminate  positions that had                                                                    
been  vacant for  only  one year.  He  concluded that  their                                                                    
amendments only proposed to  eliminate vacant positions that                                                                    
were being taken advantage of by departments.                                                                                   
                                                                                                                                
Vice-Chair  Gara  emphasized  that   it  had  taken  several                                                                    
minutes of speaking to the  department to receive the needed                                                                    
information about  the specific  positions. The  funding for                                                                    
the positions had been deleted  in FY 17 with an unallocated                                                                    
cut.  He emphasized  that the  amendment would  result in  a                                                                    
double  cut to  the department  (like four  other previously                                                                    
proposed amendments). He stressed  it was necessary to speak                                                                    
to the department versus merely  reading the budget book. He                                                                    
stressed that the cut would delete additional positions.                                                                        
                                                                                                                                
4:14:58 PM                                                                                                                    
                                                                                                                                
Representative Wilson remarked that  the ability to have the                                                                    
discussions  in  subcommittee  would also  be  helpful.  She                                                                    
agreed that some  of the positions had  been deleted because                                                                    
departments  had   to  fulfill   a  vacancy  factor   -  the                                                                    
information was  included in the budget  books. She believed                                                                    
a person should  be able to look at the  budget books to get                                                                    
all of  the information.  She acknowledged  that if  she had                                                                    
only looked at the basic  numbers without drilling down into                                                                    
the detail it would be  her fault; however, she had reviewed                                                                    
the  details.  She  furthered  that  the  details  addressed                                                                    
whether  positions  had  been transferred  and  whether  the                                                                    
money  had  been  transferred  with  them.  She  added  that                                                                    
sometimes positions were transferred  without the money. The                                                                    
details  also  showed  whether positions  were  funded  with                                                                    
interagency  receipts.  She  explained the  details  in  the                                                                    
books should  specify whether cuts  had been  unallocated in                                                                    
2017.                                                                                                                           
                                                                                                                                
Co-Chair Foster MAINTAINED his OBJECTION.                                                                                       
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Pruitt, Thompson, Tilton, Wilson                                                                                      
OPPOSED: Guttenberg,  Kawasaki, Ortiz, Gara,  Grenn, Foster,                                                                    
Seaton                                                                                                                          
                                                                                                                                
The MOTION to adopt Amendment H DOA 24 FAILED (4/7).                                                                            
                                                                                                                                
4:18:27 PM                                                                                                                    
                                                                                                                                
Representative  Tilton MOVED  to  ADOPT Amendment  H DOA  26                                                                    
(copy on file):                                                                                                                 
                                                                                                                                
     Motor Vehicles                                                                                                             
     H  DOA  26 -  Outsource  of  services through  business                                                                    
     partners                                                                                                                   
     Offered by Representatives: Tilton, Wilson                                                                                 
                                                                                                                                
     It is the  intent of the legislature  that the Division                                                                    
     of   Motor   Vehicles  outsource   administrative   and                                                                    
     licensing services to  private sector business partners                                                                    
     to the  extent practicable.  The  Division has reported                                                                    
     that  during  FY16  and FY17  private  sector  business                                                                    
     partners  have  processed  15   percent  of  the  total                                                                    
     transactions and  collected 17  percent of  the revenue                                                                    
     for  the  division.  As  a result  DMV  is  looking  at                                                                    
     expanding   both  the   number  of   business  partners                                                                    
     throughout the  state and the number  of services those                                                                    
     business partners can provide.                                                                                             
                                                                                                                                
Vice-Chair Gara OBJECTED for discussion.                                                                                        
                                                                                                                                
Representative Tilton explained  the amendment that included                                                                    
intent language. She  had heard from the  department that it                                                                    
was  looking   at  moving  services  out   to  its  business                                                                    
partners, which  she wanted to  ensure the  department would                                                                    
continue to pursue. She read  from the amendment description                                                                    
[see  above].  She   believed  it  was  a   good  return  on                                                                    
investment.                                                                                                                     
                                                                                                                                
Representative Grenn applauded the  intent of the amendment;                                                                    
however, he  was uncertain  of its  necessity and  would not                                                                    
support it.  He detailed that  since July 2016  the Division                                                                    
of  Motor  Vehicles (DMV)  had  entered  into six  contracts                                                                    
consisting  of four  private  businesses  and two  financial                                                                    
institutions. Additionally in the  coming month the division                                                                    
would be conducting a pilot  program with one of its current                                                                    
private business  partners that would enable  DMV to process                                                                    
and issue driver's licenses  and state identification cards.                                                                    
Once the  90-day pilot  period was  over the  division would                                                                    
verify its  processes were running smoothly.  The intent was                                                                    
to  open   the  opportunity  to  all   businesses  currently                                                                    
performing DMV services.                                                                                                        
                                                                                                                                
Representative  Thompson supported  the amendment.  He noted                                                                    
that  the  amendment did  not  require  the division  to  do                                                                    
anything and did not specify  that a certain amount of money                                                                    
would be saved.  He furthered that it  merely encouraged DMV                                                                    
to  continue  to  outsource   services  [to  private  sector                                                                    
business  partners]. He  explained that  customers paid  for                                                                    
the additional $10  fee on top of the license  plate fee. He                                                                    
opined that the outsourcing was  a good thing. The amendment                                                                    
merely encouraged the department to keep up the work.                                                                           
                                                                                                                                
Representative Pruitt  spoke in  favor of the  amendment. He                                                                    
stated  that  just  because  DMV  was  outsourcing  services                                                                    
currently did  not mean it would  not decide to stop  in the                                                                    
future.  He believed  it  was good  for  the legislature  to                                                                    
encourage DMV to continue the  practice. He told of a recent                                                                    
experience  he had  at  DMV  where he  had  waited over  two                                                                    
hours. He detailed that the  employee who had helped him had                                                                    
discussed challenges and had specified  that no one listened                                                                    
to the employees. He believed  it represented the difference                                                                    
between working  in the confines  of a  bureaucratic system.                                                                    
He supported individuals driving  the market and the success                                                                    
of the  particular organizations. He believed  a shift would                                                                    
occur where more  people were heading in  that direction. He                                                                    
noted that if  the shift successfully occurred  it meant the                                                                    
number of  state employees and  facilities would need  to be                                                                    
reduced. He believed there should  be other providers in the                                                                    
private sector.  He added  that the  market would  drive the                                                                    
success  of the  private sector  business partners  - people                                                                    
would  not patron  the  businesses if  the  service was  not                                                                    
superior  to service  provided by  DMV.  He believed  people                                                                    
currently wanted  an option  that exceeded  their experience                                                                    
at DMV.  He appreciated  the department  was working  on the                                                                    
issue, but he wanted it to continue.                                                                                            
                                                                                                                                
4:23:36 PM                                                                                                                    
                                                                                                                                
Representative  Wilson supported  the amendment.  She wanted                                                                    
to  make  sure the  department  was  not merely  looking  at                                                                    
cities that currently had the  service. She wanted to ensure                                                                    
outlying areas  such as Delta,  Bethel, Nenana, or  Nome had                                                                    
the service  as well. She shared  that she had also  spent a                                                                    
significant  amount of  time in  line at  DMV. She  remarked                                                                    
that people  were willing to  pay extra to avoid  waiting in                                                                    
DMV lines. She  stated that the service  could be outsourced                                                                    
for less money. She believed  the department had done a good                                                                    
job  working on  the  issue,  but she  wanted  to ensure  it                                                                    
expanded  to   communities  beyond  the  road   system.  She                                                                    
remarked  on the  DMV  business hours  that  did not  expand                                                                    
beyond the  standard workweek. She  wanted to  encourage the                                                                    
private  sector  to  provide availability  during  off  work                                                                    
hours.                                                                                                                          
                                                                                                                                
Representative  Guttenberg  stated   that  every  dealership                                                                    
could sell tags.  He noted there were quite a  few places in                                                                    
Fairbanks that operated as a  business - it was not cheaper,                                                                    
just very convenient.  He continued that it  was possible to                                                                    
get online to see how crowded  DMV was at any given time. He                                                                    
remarked that DMV was a money  maker for the state, with low                                                                    
cost. He would  not oppose the amendment, but  he would like                                                                    
to see  a report  or concept of  the discussion  about "what                                                                    
they're  doing,  where  they've been,  how  successful  they                                                                    
are."  He  added that  a  person  could purchase  a  hunting                                                                    
license at  numerous places. He  reasoned that DMV  had been                                                                    
working to  outsource services and  he believed it  would be                                                                    
beneficial  to have  the  division  provide the  legislature                                                                    
with a  status report. He  was interested to learn  why some                                                                    
businesses could  not or would  not provide the  service. He                                                                    
reiterated  that there  were numerous  places providing  the                                                                    
service, which was not cheaper  (there was a surcharge), but                                                                    
was more convenient.                                                                                                            
                                                                                                                                
4:27:00 PM                                                                                                                    
                                                                                                                                
Representative Tilton  provided wrap up. She  expressed high                                                                    
hopes to  find some  common ground  on something  during the                                                                    
current  meeting.  She  highlighted that  the  division  had                                                                    
already   started  outsourcing   services.  She   wanted  to                                                                    
continue to  encourage a public/private  sector relationship                                                                    
where  everyone  was working  together  to  help combat  the                                                                    
current deficit. The practice allowed  DMV to "look and work                                                                    
on the things that they  have to" and allowed another option                                                                    
for the  public. She communicated that  the private business                                                                    
partnerships collected  17 percent  of the revenue  for DMV,                                                                    
which was a good return.                                                                                                        
                                                                                                                                
Vice-Chair Gara  stated that he  would probably  support the                                                                    
amendment  if it  was written  differently.  He thought  the                                                                    
directive to  outsource should be softer.  He MAINTAINED his                                                                    
OBJECTION.                                                                                                                      
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR:  Ortiz, Pruitt,  Thompson, Tilton,  Wilson, Grenn,                                                                    
Guttenberg, Seaton, Foster                                                                                                      
OPPOSED: Kawasaki, Gara                                                                                                         
                                                                                                                                
The MOTION  PASSED (9/2). There being  NO further OBJECTION,                                                                    
H DOA 26 was ADOPTED.                                                                                                           
                                                                                                                                
4:29:54 PM                                                                                                                    
                                                                                                                                
Representative Wilson MOVED to ADOPT Amendment H CED 7:                                                                         
                                                                                                                                
     Executive Administration                                                                                                   
     Commissioner's Office                                                                                                      
     H CED 7 - Delete Special Assistant                                                                                         
     Offered by Representative Wilson                                                                                           
                                                                                                                                
     This amendment  makes a reduction of  $150,000 from the                                                                    
     Personal Services line of the  FY 18 budget request and                                                                    
     deletes   one  of   two   Special   Assistant  to   the                                                                    
     Commissioner  positions  and  the  associated  personal                                                                    
     service.  Any duties  performed by  this position  that                                                                    
     must  be continued  can be  redistributed to  remaining                                                                    
     staff in  the Commissioner's office or  in the Division                                                                    
     of Administrative Services.                                                                                                
                                                                                                                                
Co-Chair Foster and Vice-Chair Gara OBJECTED.                                                                                   
                                                                                                                                
Representative  Wilson read  the amendment  description [see                                                                    
above].  She  relayed that  the  $35,300  came from  general                                                                    
funds and $114,700 from interagency receipts.                                                                                   
                                                                                                                                
Representative Guttenberg  was opposed to the  amendment. He                                                                    
stated the  commissioner's office  had already  been reduced                                                                    
by   eight  positions   since   2015   including  a   deputy                                                                    
commissioner and  three staff. Additionally,  the reductions                                                                    
had cut all  of the administrative support  in the Anchorage                                                                    
office   and   removed   a   communications   position.   He                                                                    
communicated  that the  commissioner  sat on  30 boards  and                                                                    
commissions  including   the  department's  6  core   and  6                                                                    
corporate  agencies.   He  elaborated   that  administrative                                                                    
services had been designated as  backup, but it did not have                                                                    
the  capacity to  perform in  that role  due to  cuts of  26                                                                    
percent since 2015.  He detailed that the  division had lost                                                                    
13  positions -  more than  half of  administrative services                                                                    
positions were  information technology staff who  create and                                                                    
maintain computer  programs for the department  to function.                                                                    
The  division  managed  the department  including  finances,                                                                    
procurement,  human  resources,   and  other  functions.  He                                                                    
continued  that  the cut  would  fall  on a  department  and                                                                    
commissioner  that   was  already  overburdened   and  would                                                                    
negatively   impact  the   basic   core   function  of   the                                                                    
department.                                                                                                                     
                                                                                                                                
Representative  Pruitt supported  the  amendment. He  stated                                                                    
that "part of the reasons why  we argue that we can't cut is                                                                    
part of the  reason why I don't think  the department should                                                                    
exist." He believed that at present  there was no need for a                                                                    
separate department. He continued they  could come up with a                                                                    
reason to keep  the positions because there was  too much to                                                                    
do  at  the  department.  He   expounded  that  due  to  the                                                                    
substantial   number   of   boards   and   commissions   the                                                                    
commissioner   sat  on,   it  was   necessary  to   delegate                                                                    
responsibility  out to  other people.  He opined  that there                                                                    
were too  many boards and commissions,  too much government,                                                                    
and too  much busy work.  He believed the amendment  took an                                                                    
appropriate look and  was part of a  larger discussion about                                                                    
whether  or   not  it  was   necessary  to   reanalyze  what                                                                    
government  looked  like.  He thought  there  should  be  an                                                                    
analysis  done  to determine  whether  all  of the  existing                                                                    
boards   and   commissions   were   needed.   He   suggested                                                                    
considering  whether  some  of the  boards  and  commissions                                                                    
could be combined to  increase effectiveness and efficiency.                                                                    
He  spoke to  the argument  that the  positions were  needed                                                                    
because  the  workload was  too  significant  for a  reduced                                                                    
number of  people; however,  he did not  believe it  was the                                                                    
way  to   increase  the  effectiveness  and   efficiency  of                                                                    
government. He appreciated the amendment.  He shared that he                                                                    
had  defended the  position the  previous year  when he  had                                                                    
chaired the  Department of Commerce, Community  and Economic                                                                    
Development  budget  subcommittee.  However, he  chided  the                                                                    
department for failing  to work to become  more efficient in                                                                    
that area over the past year.                                                                                                   
                                                                                                                                
4:35:41 PM                                                                                                                    
                                                                                                                                
Representative Wilson  provided wrap  up. She  stated "shame                                                                    
on  us  if  we're  making  somebody  go  to  30  boards  and                                                                    
commission meetings."  She believed the bigger  question was                                                                    
about  the $114,700  in interagency  receipts  that was  not                                                                    
being used  by the  commissioner. She detailed  that someone                                                                    
else was using  the position and the  department was funding                                                                    
it  with other  sources besides  the commissioner's  office.                                                                    
She reasoned if  the funding had been used to  offset the 30                                                                    
boards and  commissions, it would  have appeared  as general                                                                    
funds  or other  funds,  but not  interagency receipts.  She                                                                    
concluded  that  the  specific  special  assistant  was  not                                                                    
spending time  on boards and  commissions. She  believed the                                                                    
position  was  doing  work  that should  be  done  by  other                                                                    
departments.  She continued  that interagency  receipts were                                                                    
the  most  difficult  funding source  to  follow  (with  the                                                                    
exception of those used by  the Department of Transportation                                                                    
and  Public Facilities  for facilities).  The amendment  did                                                                    
not address the responsibility of  the commissioner to be on                                                                    
30  boards and  commissions, but  she hoped  the legislature                                                                    
felt there were better uses  of the commissioner's time. She                                                                    
explained that the majority of  the funding addressed by the                                                                    
amendment  was  primarily  interagency receipts,  which  she                                                                    
believed  meant the  position  was  doing something  another                                                                    
department could do.                                                                                                            
                                                                                                                                
Co-Chair Foster MAINTAINED his OBJECTION.                                                                                       
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Pruitt, Thompson, Tilton, Wilson                                                                                      
OPPOSED: Ortiz,  Gara, Grenn, Guttenberg,  Kawasaki, Foster,                                                                    
Seaton                                                                                                                          
                                                                                                                                
The MOTION to adopt Amendment H CED 7 FAILED (4/7).                                                                             
                                                                                                                                
4:38:11 PM                                                                                                                    
                                                                                                                                
Representative  Wilson  MOVED to  ADOPT  Amendment  H CED  9                                                                    
(copy on file):                                                                                                                 
                                                                                                                                
     Community and Regional Affairs                                                                                             
     H CED 9 - Streamlining                                                                                                     
     Regional Affairs with reduction in personnel and other                                                                     
     line items                                                                                                                 
     Offered by Representative Wilson                                                                                           
                                                                                                                                
     This amendment deletes 22 positions and makes a                                                                            
     reduction of $2,400,000 from the Personal Service line                                                                     
     of the FY 18 budget request for the following items:                                                                       
                                                                                                                                
     Anchorage- deletes 2 of 3  Grants Administrators, 10 of                                                                    
     14 Local  Government Specialists,  and 1 of  3 Research                                                                    
     Analysts                                                                                                                   
                                                                                                                                
     Fairbanks-deletes 2  of 4  Grants Administrators  and 2                                                                    
     of 4 Local Government Specialists                                                                                          
                                                                                                                                
     Juneau-deletes 2  of 3 Local Government  Specialists, 2                                                                    
     of 3 Grant Administrators and 1 of 2 Research Analysts                                                                     
                                                                                                                                
     A  reduction of  $100,000 is  made to  the Travel  line                                                                    
     item  to  the  In-State  Employee  Travel  category.  A                                                                    
     reduction  of $130,000  is made  to  the Services  line                                                                    
     item for  Education Services and reduction  of $200,000                                                                    
     is made to Grants line.                                                                                                    
                                                                                                                                
Co-Chair Foster OBJECTED for discussion.                                                                                        
                                                                                                                                
Representative   Wilson   explained   the   amendment.   She                                                                    
discussed  that the  department did  a multitude  of things,                                                                    
many  of which  had been  started  when the  state had  been                                                                    
flush with money and had been  able to provide more and more                                                                    
assistance to communities that  were understaffed. She noted                                                                    
that   other  communities   had   to   fulfill  those   same                                                                    
obligations on  their own. The  amendment was an  attempt to                                                                    
begin streamlining  the Division  of Community  and Regional                                                                    
Affairs.  She  read  from  the  amendment  description  [see                                                                    
above]. She believed  it was necessary for the  state to get                                                                    
smarter  with  its  existing  resources.  She  believed  the                                                                    
funding was  going to communities that  may have alternative                                                                    
private funding sources. She  underscored that providing the                                                                    
funds was not constitutionally mandated.                                                                                        
                                                                                                                                
Representative  Guttenberg  read  briefly from  Article  10,                                                                    
Section 14 of the Alaska Constitution:                                                                                          
                                                                                                                                
     An agency shall be established  by law in the executive                                                                    
     branch  of the  state government  to advise  and assist                                                                    
     local  governments. It  shall review  their activities,                                                                    
     collect and  publish local government  information, and                                                                    
     perform other duties prescribed by law.                                                                                    
                                                                                                                                
Representative  Guttenberg   spoke  in  opposition   to  the                                                                    
amendment.  He  explained  that  the  next  section  of  the                                                                    
constitution related  to the Boundary Commission,  which was                                                                    
also under  the Division of Community  and Regional Affairs.                                                                    
He stressed  that assisting  local governments  was mandated                                                                    
in the  state constitution.  He continued  that many  of the                                                                    
staff   (i.e.   local   grant   administrators,   government                                                                    
specialists,  and research  analysts) helped  communities to                                                                    
make decisions and assisted them  with technical things that                                                                    
rural Alaska  did not  have the capacity  to do.  The grants                                                                    
administrators  assisted  with   local  Boundary  Commission                                                                    
issues, "which we all both love  and hate at the same time."                                                                    
He referred  the amendment's proposed  $2.8 million  cut and                                                                    
remarked  that  many  of the  positions  traveled  to  rural                                                                    
Alaska and slept on gymnasium  floors and provided necessary                                                                    
services  that  saved  the state  a  significant  amount  of                                                                    
money.  He   noted  that  the  amendment   did  not  contain                                                                    
information showing  what services would be  reduced and did                                                                    
not address  any constitutional requirements the  state had.                                                                    
He  referred  to  the  travel cost  and  reasoned  that  the                                                                    
state's geographical makeup made  it necessary for employees                                                                    
to travel to rural areas.                                                                                                       
                                                                                                                                
4:42:42 PM                                                                                                                    
                                                                                                                                
Representative  Wilson  countered  that the  state  was  and                                                                    
would  continue to  assist communities.  She explained  that                                                                    
the  question  was what  level  the  state could  afford  to                                                                    
assist and at  what point should communities  be required to                                                                    
maintain the service  on their own. She  continued that many                                                                    
small  communities  did  not  require  the  assistance.  She                                                                    
addressed the numerous grant personnel  due to a plethora of                                                                    
capital grants. She elaborated that  when the state had been                                                                    
flush with money it had  given a large amount to communities                                                                    
and positions  had been  needed to  follow the  grant funds.                                                                    
She  explained  that  the grant  funding  had  been  reduced                                                                    
annually. She  believed it was  unnecessary to  maintain the                                                                    
same  number  of  grant  administrator  positions  when  the                                                                    
number of grants had been  diminished. She continued that it                                                                    
was not  possible to  travel as much  when funding  had been                                                                    
reduced. She reasoned it was  necessary to use other methods                                                                    
of  communication  such  as  Skype   and  cell  phones.  She                                                                    
acknowledged  that  the  total  travel  cost  could  not  be                                                                    
eliminated  -  there  were existing  issues  with  broadband                                                                    
capability.   She   was   not  proposing   eliminating   all                                                                    
assistance,  but she  did  not believe  it  was possible  to                                                                    
continue  providing services  at the  same level.  She added                                                                    
that a  policy call to  consider was whether  to discontinue                                                                    
certain   state  services   once  a   community  reached   a                                                                    
particular size.                                                                                                                
                                                                                                                                
Co-Chair Foster MAINTAINED his OBJECTION.                                                                                       
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Pruitt, Thompson, Tilton, Wilson                                                                                      
OPPOSED: Gara,  Grenn, Guttenberg, Kawasaki,  Ortiz, Seaton,                                                                    
Foster                                                                                                                          
                                                                                                                                
The MOTION to adopt Amendment H CED 9 FAILED (4/7).                                                                             
                                                                                                                                
4:45:22 PM                                                                                                                    
                                                                                                                                
Representative  Tilton MOVED  to  ADOPT Amendment  H CED  10                                                                    
(copy on file):                                                                                                                 
                                                                                                                                
     Serve Alaska                                                                                                               
     H CED 10 - Eliminate Serve Alaska                                                                                          
     Offered by Representatives: Tilton, Wilson                                                                                 
                                                                                                                                
     There are two personnel at a cost of $244,162 to                                                                           
     administer a $1.9 million federal grant.                                                                                   
                                                                                                                                
     This amendment zeros all spending from all fund                                                                            
     sources and functionally eliminates the entire                                                                             
     program.                                                                                                                   
                                                                                                                                
     (Page 5, line 16 - 30-GH1855A)                                                                                             
                                                                                                                                
Co-Chair Foster OBJECTED for discussion.                                                                                        
                                                                                                                                
Representative  Tilton explained  that  the amendment  would                                                                    
eliminate the  Serve Alaska  program and  associated federal                                                                    
funding.  She referenced  the  program's  mission to  foster                                                                    
support and  promote the ethics of  service and volunteerism                                                                    
by  inviting  all Alaskans  to  contribute  their time.  She                                                                    
believed  it was  something Alaskans  already did  without a                                                                    
program.  She  detailed that  the  program  had $237,700  in                                                                    
personnel costs  to the state (excluding  any retirement and                                                                    
benefit costs).  She elaborated that the  federal government                                                                    
was also in a deficit  position in providing $1.9 million to                                                                    
help  generate  volunteerism.  She believed  the  people  of                                                                    
Alaska  already had  volunteerism in  their hearts.  She did                                                                    
not believe  a program requiring state  funds was necessary.                                                                    
She  reasoned  there were  other  places  and programs  that                                                                    
administered  similar  things including  disaster  services,                                                                    
economic    opportunities,    economic    and    educational                                                                    
opportunities.  She  believed  there were  several  existing                                                                    
programs that could absorb the services.                                                                                        
                                                                                                                                
Representative  Guttenberg spoke  against the  amendment. He                                                                    
referred to  the sponsor's statement  about other  places to                                                                    
receive the services.  He countered that to  a large extent,                                                                    
the Serve Alaska  program was it. He continued  that in many                                                                    
ways  instead of  having employees  administer the  service,                                                                    
volunteer  programs had  been created  and efforts  had been                                                                    
made  to train  youth  to  do good  things  for society.  He                                                                    
discussed the  proposal to cut  $1.8 million  after $195,000                                                                    
in general  funds. The state  was in a partnership  with the                                                                    
Corporation  for National  Community  Service. He  continued                                                                    
that  the  state was  serving  Alaska  with RuralCap,  which                                                                    
administered resilient  youth programs; it was  also working                                                                    
with  Alaska  Native  youth programs  to  prevent  substance                                                                    
abuse  and suicide.  Additionally, the  program worked  with                                                                    
AmeriCorps  to create  a youth  taskforce working  to engage                                                                    
kids  in high  schools  and peer-to-peer  outreach. He  also                                                                    
listed  the   Sitka  AmeriCorps  program,   Anchorage  Parks                                                                    
Foundation, and the Salvation Army.                                                                                             
                                                                                                                                
Representative  Guttenberg stated  that over  the years  the                                                                    
legislature  had  asked people  to  do  more with  less  and                                                                    
eventually  more  with nothing.  He  stressed  that all  the                                                                    
state had  to do was  create an infrastructure, ask  them to                                                                    
bring  in volunteers,  and train  kids with  work ethic.  He                                                                    
underscored it was  the lowest level of  volunteerism to get                                                                    
people to actually make a  difference in their community and                                                                    
to  encourage young  people  to  start off  in  a career  of                                                                    
understanding  volunteerism. He  hoped it  would mean  youth                                                                    
would  continue to  volunteer in  places like  the Salvation                                                                    
Army, church,  community, and  other for  the rest  of their                                                                    
lives. It  was not possible  to merely  tell a person  to go                                                                    
volunteer.  The program  accomplished  a significant  amount                                                                    
with  low   dollars.  He  believed  an   infrastructure  for                                                                    
volunteerism  was  needed.  He   explained  that  even  kids                                                                    
cleaning  up   garbage  in  the  spring   had  a  supervisor                                                                    
volunteer.  He emphasized  that the  program accomplished  a                                                                    
significant amount at a very low cost.                                                                                          
                                                                                                                                
4:50:21 PM                                                                                                                    
                                                                                                                                
Vice-Chair Gara  was opposed to the  amendment. He addressed                                                                    
comments made during the  amendment discussion pertaining to                                                                    
the   Department  of   Commerce,   Community  and   Economic                                                                    
Development.  He referred  to an  earlier statement  that it                                                                    
was necessary  to start  cutting the  department's agencies.                                                                    
He stressed the  agency had been cut 65 percent  in the past                                                                    
several  years. The  department was  supposed to  make rural                                                                    
communities more  vibrant, help  with the economy,  and help                                                                    
reduce the  cost of energy  across the state.  He emphasized                                                                    
that the proposed amendment would  end AmeriCorps, which was                                                                    
a bipartisan  nationwide program. He did  not understand why                                                                    
someone would want to cut  $200,000 and eliminate $2 million                                                                    
in federal matching funds. He  believed in AmeriCorps, which                                                                    
he  referred to  as an  urban  Peace Corps.  He opined  that                                                                    
eliminating the program in Alaska would be a grave mistake.                                                                     
                                                                                                                                
Representative  Wilson believed  AmeriCorps  was already  in                                                                    
Fairbanks  and   went  through  the  borough.   She  thought                                                                    
nonprofits  could  pick it  up  and  apply for  the  federal                                                                    
funds,  which  she believed  some  were  already doing.  She                                                                    
wondered  why  the  state  had   provided  funding  for  the                                                                    
program.  She   questioned  whether  Anchorage   or  another                                                                    
nonprofit  had  been  asked to  organize  the  program.  She                                                                    
underscored that  the state was  not responsible  for always                                                                    
providing  funding.  She believed  at  a  certain point  the                                                                    
program  no longer  needed assistance  from  the state.  She                                                                    
supported  AmeriCorps volunteers,  but did  not believe  the                                                                    
state should  pay for it.  She hoped the  subcommittee chair                                                                    
would look  into whether the  federal funding could  be used                                                                    
by a non-governmental entity.                                                                                                   
                                                                                                                                
4:53:36 PM                                                                                                                    
                                                                                                                                
Representative Tilton  provided wrap up. She  had no problem                                                                    
with  AmeriCorps   or  any   other  volunteer   program  and                                                                    
encouraged the  programs. She shared  that she  had belonged                                                                    
to the Lion's  Club and had worked with  young teens picking                                                                    
up trash -  she did not think  it was necessary to  go to an                                                                    
organized  program to  learn how  to  volunteer. She  stated                                                                    
there were numerous opportunities  in schools, churches, and                                                                    
local Lions and Elks clubs.  She stressed that the amendment                                                                    
was  not directed  at any  particular program.  She did  not                                                                    
believe  it  was  the state's  responsibility  to  fund  the                                                                    
program. She  reasoned it was necessary  to consider whether                                                                    
a program  was a  core service or  constitutionally mandated                                                                    
or whether it was merely a nice service.                                                                                        
                                                                                                                                
Co-Chair Foster MAINTAINED his OBJECTION.                                                                                       
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Tilton, Wilson, Grenn, Pruitt                                                                                         
OPPOSED: Gara, Guttenberg, Kawasaki, Ortiz, Foster, Seaton                                                                      
                                                                                                                                
Representative Thompson was absent from the vote.                                                                               
                                                                                                                                
The MOTION to adopt Amendment H CED 10 FAILED (4/6).                                                                            
                                                                                                                                
4:55:42 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
5:00:20 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Representative  Wilson MOVED  to  ADOPT Amendment  H CED  13                                                                    
(copy on file):                                                                                                                 
                                                                                                                                
     Economic Development                                                                                                       
     H CED 13 - Delete the  allocation and all funding as it                                                                    
     does not contribute to the mission of the Department                                                                       
     Offered by Representative Wilson                                                                                           
                                                                                                                                
     This amendment  deletes all  positions and  funding for                                                                    
     this allocation  from the  FY 18  budget request.   The                                                                    
     mission  of  the  Department  is  to  promote  economic                                                                    
     development  opportunities,  however,  this  allocation                                                                    
     does  not  contribute   to  the  Department's  mission.                                                                    
     Instead,   the  division   focuses   on  research   and                                                                    
     technical  assistance  that  are not  critical  to  the                                                                    
     life, health or safety of Alaskans.                                                                                        
                                                                                                                                
Co-Chair Foster OBJECTED.                                                                                                       
                                                                                                                                
Representative  Wilson read  from the  amendment description                                                                    
[see above]. She elaborated that  the amendment would remove                                                                    
$769,400  from  personal   services,  $91,200  from  travel,                                                                    
$720,100  from  services,   $20,300  from  commodities,  and                                                                    
$2,900 from capital outlay. The  amendment would remove five                                                                    
permanent  full-time positions  for  a  total of  $1,603,900                                                                    
($173,300 in  federal receipts,  $783,500 in  general funds,                                                                    
$72,600  in   interagency  receipts,  $109,600   in  capital                                                                    
improvement   program   receipts,  $128,400   in   statutory                                                                    
designation, and  $336,500 for  vehicle rental  tax (general                                                                    
funds)).                                                                                                                        
                                                                                                                                
5:02:39 PM                                                                                                                    
                                                                                                                                
Representative  Guttenberg  addressed the  amendment,  which                                                                    
pertained  to  the  economic   development  mission  of  the                                                                    
Department of Commerce,  Community and Economic Development.                                                                    
He read  from a portion  of the amendment  description: "the                                                                    
division focuses  on research and technical  assistance that                                                                    
are  not  critical   to  the  life,  health   or  safety  of                                                                    
Alaskans."  He  stressed  that  the  department  focused  on                                                                    
economic development.  He cited  examples including  Made in                                                                    
Alaska,  Alaska  Products Preference,  Minerals  Commission,                                                                    
tourism  oversight  for  the state,  visitor  research,  the                                                                    
Alaska Regional Development  Organizations designations, and                                                                    
the   Comprehensive   Economic  Development   Strategy.   He                                                                    
referenced the fiscal deficit facing  the state and reasoned                                                                    
that   economic  development   would   be  instrumental   in                                                                    
addressing the problem. He  countered complaints about staff                                                                    
doing  research. He  stressed that  opportunities had  to be                                                                    
identified to capitalize on  Alaska's resources. He reasoned                                                                    
that without research it would  not be possible to determine                                                                    
correct   decisions.  Additionally,   the  decision   making                                                                    
process was  expensive. He referred to  the numerous funding                                                                    
sources   included  in   the  amendment.   He  opposed   the                                                                    
amendment.                                                                                                                      
                                                                                                                                
Representative Pruitt remarked that  the subject was a tough                                                                    
one.  He  detailed  that everyone  wanted  to  see  economic                                                                    
development;  however,  it  was   necessary  to  consider  a                                                                    
department  or division's  success in  putting forward  that                                                                    
mission.  He discussed  that when  the Department  of Energy                                                                    
had  been  formed  the  goal  had been  to  move  away  from                                                                    
utilization  of oil  from outside  of  domestic sources.  He                                                                    
expounded that at  the time 70 percent of  the country's oil                                                                    
came from  domestic sources,  whereas at  present it  was 30                                                                    
percent. Yet the state continued  to spend a large amount of                                                                    
money  on  the  department.  He did  not  know  whether  the                                                                    
department's efforts  had been  successful - he  believed it                                                                    
was  necessary  to  determine whether  success  in  bringing                                                                    
about  economic diversification  had  occurred. He  remarked                                                                    
that the  state continued  to fund  the department,  but the                                                                    
mission as it had been  established "has not been there." He                                                                    
was not trying  to claim that no good work  had been done by                                                                    
the  department. However,  he  believed  the department  was                                                                    
"stuck in the same ways."                                                                                                       
                                                                                                                                
Representative Pruitt recalled  a conversation several years                                                                    
back  with  a  former  House Finance  Committee  member.  He                                                                    
shared that the conversation had  been about a small company                                                                    
with  several employees.  He elaborated  that the  state had                                                                    
spent $100,000 trying to help  the small company operate its                                                                    
business.  He   remembered  asking   why.  He   stated  that                                                                    
unfortunately  that  type  of   situation  occurred  in  the                                                                    
Division   of  Economic   Development.  He   continued  that                                                                    
sometimes  it  became less  about  how  to create  a  larger                                                                    
diversification versus work  to help on a  smaller scale. He                                                                    
believed   the  legislature   should  potentially   look  at                                                                    
eliminating the  division's funding. He spoke  to challenges                                                                    
the  state   had  created   throughout  various   levels  of                                                                    
government.  He  relayed that  the  vehicle  rental tax  had                                                                    
originally  been  intended  to   go  towards  marketing  for                                                                    
tourism;  however,  $336,000  was  budgeted  to  go  towards                                                                    
economic  development.  He  remarked that  sometimes  larger                                                                    
cuts to  the budget  needed to  be made  because it  was not                                                                    
possible to  cut small increments  in the budget due  to the                                                                    
complexity  of the  bureaucratic  system.  He supported  the                                                                    
amendment.                                                                                                                      
                                                                                                                                
Representative  Tilton added  that she  wanted to  encourage                                                                    
economic development, but she believed  one of the best ways                                                                    
to foster economic development  was to streamline permitting                                                                    
and regulations,  which she did  not believe  the department                                                                    
did.                                                                                                                            
                                                                                                                                
5:09:36 PM                                                                                                                    
                                                                                                                                
Co-Chair  Seaton opposed  the  amendment.  He was  surprised                                                                    
that his colleagues  would say that the  legislature did not                                                                    
need to  worry about economic development.  He detailed that                                                                    
the  division housed  the  ARDORs  program [Alaska  Regional                                                                    
Development Organizations], which  focused on many different                                                                    
sections of the state. He  continued that without the ARDORs                                                                    
program there  would not  be regional  economic development.                                                                    
The division  also included  the Minerals  Commission, which                                                                    
was working on promoting  different mineral locations across                                                                    
Alaska. He pointed to the  successful Made in Alaska program                                                                    
that had  diversified local economies  and had  enabled them                                                                    
to  produce for  an  Alaska product  preference program.  He                                                                    
remarked  that they  could develop  everything out  of state                                                                    
and could  abandon looking for different  opportunities, but                                                                    
he did not believe it was  something that should be done. He                                                                    
continued that  economic development  was one of  the things                                                                    
the state  had always tried to  focus on because it  did not                                                                    
happen if  directed efforts were  not made by the  state. He                                                                    
believed  the  state  needed  to  help  where  possible.  He                                                                    
concluded it was not possible  to throw a substantial amount                                                                    
of  money  into  things,  but the  amount  provided  to  the                                                                    
division was not large.                                                                                                         
                                                                                                                                
Representative Wilson  provided wrap up. She  disagreed with                                                                    
the  comment  that  if  the  state  did  not  do  something,                                                                    
economic  development  did  not  happen.  She  believed  the                                                                    
Minerals Commission,  the ARDORs program, and  research were                                                                    
all positive; however, she questioned  why the things needed                                                                    
to  be  government  services.  She   stressed  there  was  a                                                                    
research institution  that the legislature heard  about from                                                                    
the  University  of  Alaska. She  asked  what  research  the                                                                    
department was doing that could  not be done by the research                                                                    
institution. She  believed the Made in  Alaska program could                                                                    
be combined with tourism. She  was uncertain why the vehicle                                                                    
rental  tax   was  being  utilized  by   the  division.  She                                                                    
emphasized it was not about  whether the program was good or                                                                    
bad,  but  about  whether  government  needed  to  fund  the                                                                    
services. She  believed many people from  the private sector                                                                    
would  disagree with  the statement  that if  government did                                                                    
not provide the work it would  not get done. She opined that                                                                    
when government took on the  work it was because the private                                                                    
sector  knew   something  would   be  expensive   and  would                                                                    
ultimately not work.                                                                                                            
                                                                                                                                
Representative Wilson  discussed that  municipalities across                                                                    
the  state had  their  own economic  development staff.  She                                                                    
continued that  putting services  in silos ended  up costing                                                                    
more  money and  did not  result in  increased success.  She                                                                    
thought the  Minerals Commission  could be housed  under the                                                                    
Department    of    Natural    Resources.    She    believed                                                                    
nongovernmental organizations could  be eligible for federal                                                                    
grants if  the state chose  not to utilize them.  She opined                                                                    
that more  could be done  at the local level  with increased                                                                    
participation. She  emphasized that she did  not believe the                                                                    
people  providing the  services were  bad in  any way  - the                                                                    
larger question  was whether the  state should be  doing the                                                                    
work in  the first place.  She stressed that when  the state                                                                    
had been small it had  been necessary for government to take                                                                    
on the work  because there had not been  any real structure.                                                                    
She underscored  that times  had changed  and the  state was                                                                    
growing. She concluded the state  should be able to stand on                                                                    
its own two feet. She was  in favor of seeing which programs                                                                    
would  be   supported  by  Alaskans  and   communities.  She                                                                    
believed  positive services  offered by  the state  would be                                                                    
picked  up by  the  private sector  or  the University.  She                                                                    
underscored  it  was  not necessary  to  have  a  department                                                                    
focusing on the services.                                                                                                       
                                                                                                                                
Co-Chair Foster MAINTAINED his OBJECTION.                                                                                       
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Tilton, Wilson, Pruitt, Thompson                                                                                      
OPPOSED: Gara, Grenn, Guttenberg, Kawasaki, Ortiz, Seaton,                                                                      
Foster                                                                                                                          
                                                                                                                                
The MOTION to adopt Amendment H CED 13 FAILED (4/7).                                                                            
                                                                                                                                
HB 57 was HEARD and HELD in committee for further                                                                               
consideration.                                                                                                                  
                                                                                                                                
HB 59 was HEARD and HELD in committee for further                                                                               
consideration.                                                                                                                  
                                                                                                                                
Co-Chair Seaton announced the schedule for the following                                                                        
morning.                                                                                                                        
                                                                                                                                

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