Legislature(2001 - 2002)

04/25/2002 08:04 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                                                                                                                                
     SENATE CS FOR CS FOR HOUSE BILL NO. 403(FIN)                                                                               
     "An  Act  making appropriations   for the  operating  and  loan                                                            
     program  expenses of  state government,  for certain  programs,                                                            
     and to capitalize  funds; 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."                                                                                                           
                                                                                                                                
     CS FOR HOUSE BILL NO. 404(FIN)                                                                                             
     "An  Act making appropriations  for the  operating and  capital                                                            
     expenses of the state's  integrated comprehensive mental health                                                            
     program; and providing for an effective date."                                                                             
                                                                                                                                
                                                                                                                                
The Committee  considered  amendments to  SCS CS  HB 403 (FIN),  22-                                                            
LS1295\R,  which was  adopted  as a working  draft  at the  previous                                                            
hearing.                                                                                                                        
                                                                                                                                
Department of Community and Economic Development                                                                              
                                                                                                                                
C&ED  #1: This  amendment  changes the  funding source  of  $160,000                                                            
general  funds to  Inter-Agency  (I/A)  Receipts for  the  Community                                                            
Assistance  &  Economic  Development   Budget  Request  Unit  (BRU),                                                            
Community and Business  Development component on page 6 lines 13 and                                                            
14.                                                                                                                             
                                                                                                                                
Co-Chair Kelly moved for adoption.                                                                                              
                                                                                                                                
Co-Chair Donley  noted this amendment involves a fund  source change                                                            
and has a net zero affect.                                                                                                      
                                                                                                                                
There was no objection and the amendment was ADOPTED.                                                                           
                                                                                                                                
Department of Health and Social Services                                                                                      
                                                                                                                                
H&SS #1:  This amendment  adds $204,300 general  funds to the  State                                                            
Health  Services  BRU,  Emergency  Medical   Services  (EMS)  Grants                                                            
component,  and  $204,300  general  funds to  the  Community  Health                                                            
Grants  component  on page  21 lines  16,  17 and  18. Accompanying                                                             
explanatory language reads as follows.                                                                                          
                                                                                                                                
     This amendment  moves $204,300 from Community  Health Grants to                                                            
     EMS Grants. The Community  Health Grants line is larger and can                                                            
     more  readily  absorb  a cut  of  this size.  In  addition  the                                                            
     Community  Health Grantees are receiving increasing  amounts of                                                            
     federal and other  funds to make up the general fund shortfall.                                                            
                                                                                                                                
Co-Chair Kelly moved for adoption.                                                                                              
                                                                                                                                
Co-Chair Donley stated  this is a technical amendment and also has a                                                            
net zero affect.                                                                                                                
                                                                                                                                
The amendment was ADOPTED without objection.                                                                                    
                                                                                                                                
Department of Labor and Workforce Development                                                                                 
                                                                                                                                
L&WD  #1: This  amendment  deletes  $8,900  general funds  from  the                                                            
Employment  Security BRU, Employment  Services component  on page 23                                                            
line 18, and  adds $8,900 general  funds to the Labor Standards  and                                                            
Safety  BRU, Mechanical  Inspections  component on  page 24 line  9.                                                            
Accompanying explanatory language reads as follows.                                                                             
                                                                                                                                
     This  technical  amendment   corrects  an  error  made  in  the                                                            
     previously  approved amendment  titled MULTI #1, which  reduced                                                            
     the Mechanical  Inspection component by $110,000.  The $110,000                                                            
     reduction  to Labor and Workforce Development  should have been                                                            
     a reduction of $101,100  in the Mechanical Inspection component                                                            
     for  FY 03  Governor  increases to  this component  (funded  by                                                            
     Senate Finance  Subcommittee) and a reduction  of $8,900 for FY                                                            
     03 Governor increases in the Employment Services component.                                                                
                                                                                                                                
Co-Chair Kelly moved for adoption.                                                                                              
                                                                                                                                
Co-Chair Donley informed  the Committee that this net zero amendment                                                            
is offered at  the recommendation of the chair of  the Department of                                                            
Labor and Workforce Development budget subcommittee.                                                                            
                                                                                                                                
Without objection the amendment was ADOPTED.                                                                                    
                                                                                                                                
ANNALEE  MCCONNELL,  Director,   Office  of  Management  and  Budget                                                            
testified that significant  improvements were made with the adoption                                                            
of MULTI #1  at the previous hearing,  but stressed that  funding to                                                            
other programs need to  be addressed because "we are not holding the                                                            
line on  services for Alaska  for the coming  year." She noted  that                                                            
testimony  from representatives   of other  State agencies  at  this                                                            
hearing would  focus on those areas in which the proposed  amount of                                                            
funding  would  be  inadequate  to maintain  the  current  level  of                                                            
services.                                                                                                                       
                                                                                                                                
Ms.  McConnell  reminded  the Committee  of  the  approximately  $80                                                            
million in increased costs  during the previous year and replacement                                                            
of one-time  funding sources.  She noted  these increases "were  for                                                            
the most part  accepted in last year's  budget." She indicated  that                                                            
approximately  $15 million of the increases involved  replacement of                                                            
one-time federal  or other funds no longer available  in the current                                                            
fiscal  year. She  compared this  to the approximately  $43  million                                                            
that  would no  longer  be available  for  appropriation  in FY  03,                                                            
including federal  grants for beds in corrections  and halfway house                                                            
programs, and federal funds for Medicaid Pro-Share.                                                                             
                                                                                                                                
Ms. McConnell  pointed out additional expenses would  be incurred in                                                            
FY 03 for negotiations  of labor contracts and private contracts for                                                            
goods and services,  including bulk fuel purchases.  She warned that                                                            
if  sufficient  funds are  not  appropriated  for these  fixed  cost                                                            
increases as well as to  compensate for inflation, "you are actually                                                            
going backwards  with respect to programs."  She noted this  impacts                                                            
all State services and the University of Alaska.                                                                                
                                                                                                                                
Ms.  McConnell expressed  that  consideration  should  be made  that                                                            
"holding the  line can mean one of  two things: it can mean  holding                                                            
the line on general fund  dollars, or it could mean holding the line                                                            
on the services  that we provide to the State." She  opined that the                                                            
previous  year, the Committee  experienced  a significant amount  of                                                            
"public support and pride"  in the budget efforts. She surmised this                                                            
public support  would continue  if necessary  adjustments were  made                                                            
this year to  provide for the increased  costs to maintain  existing                                                            
levels of service.                                                                                                              
                                                                                                                                
Ms. McConnell  qualified  that her  statements are  not intended  to                                                            
indicate  that Governor Tony  Knowles finds  it unimportant  to make                                                            
improvements   to  K-12   education,  the   University,  and   child                                                            
protection.                                                                                                                     
                                                                                                                                
Department of Corrections                                                                                                     
                                                                                                                                
MARGARET  PUGH, Commissioner,  Department  of Corrections,  informed                                                            
that the $1  million funding increase  provided in MULTI  #1, raised                                                            
the total appropriation  for the Department to $8  million below the                                                            
amount requested by the  Governor. She noted this is $7 million less                                                            
than  is  necessary  to maintain  existing  service  levels  and  $6                                                            
million less than the amount  appropriated in FY 02. She stated that                                                            
the $1  million addition  would  assist in funding  the therapeutic                                                             
courts program,  medical program expenses,  longstanding  shortfalls                                                            
of the Parole  Board, and annualizing  the costs of renewed  halfway                                                            
house contracts.                                                                                                                
                                                                                                                                
Ms. Pugh noted the current  total appropriation includes: $7 million                                                            
to replace federal  funds, $1.7 million to fund salary  increases as                                                            
required  in employee contracts,  $1.9 million  for a new jail,  and                                                            
$1.5  million for  medical  expenses.  She emphasized  this  funding                                                            
level  "does  not  give any  consideration   to the  growth  in  the                                                            
population that we expect  for next year," and that the Institutions                                                            
and the  Probation  Offices components  would  receive $3.2  million                                                            
less  than  needed. She  requested  the  Committee's  assistance  to                                                            
assure "the  people of Alaska  that the public  is protected  by the                                                            
job that  the  Department of  Corrections  does." She  spoke of  the                                                            
statutory obligation of the Department to protect the public.                                                                   
                                                                                                                                
Senator  Ward   reminded  that  DNR   #1,  an  amendment   that  was                                                            
incorporated  into MULTI  #1 and  adopted at  the previous  hearing,                                                            
utilized  $300,000   program  receipts  to  replace   general  funds                                                            
appropriated  to the McKinley  Meat Packing  Plant. He relayed  that                                                            
Mr.  Peeples informed  him  that $80,000  of  this amount  would  be                                                            
expended  for  a  correctional   officer  position   that  would  be                                                            
transferred to Palmer.  Therefore, Senator Ward stated that $220,000                                                            
general  funds are  available for  other Departmental  purposes.  He                                                            
asked if this would provide flexibility to the Department.                                                                      
                                                                                                                                
DWYANE  PEEPLES,  Director,  Division  of Administrative   Services,                                                            
Department  of Corrections,  understood the  appropriation was  made                                                            
from a  revolving loan  fund program  to the  Department of  Natural                                                            
Resources,  and that an arrangement  would  be made to transfer  the                                                            
services of the correctional  officer positions. He pointed out that                                                            
two correctional  officers are necessary  to provide supervision  to                                                            
maintain  the historical  level  of inmate  labor at  the Plant.  He                                                            
stated  that  the  annual  expense  of  each  correctional   officer                                                            
position is approximately $60,000.                                                                                              
                                                                                                                                
Ms. Pugh  informed  Senator Ward  that  the $220,000  would be  most                                                            
useful to  the Department  of Corrections if  it is appropriated  to                                                            
the  Division   of  Institutions   rather   than  the  Correctional                                                             
Industries component as  the operations of the meat packing facility                                                            
would be transitioning to the private sector.                                                                                   
                                                                                                                                
Mr. Peeples affirmed this point.                                                                                                
                                                                                                                                
Senator  Hoffman remarked,  "We are  well aware  as Democrats,  that                                                            
there does  exist a  major deficient  in the  operating budget  this                                                            
year, and has been for  quite some time." Therefore, he assured that                                                            
none of the amendments  offered by he or Senator Olson  would expand                                                            
the programs  recommended  by the Governor.   However, he  expressed                                                            
that  the services  currently  provided  to Alaskans  in  the FY  02                                                            
budget  should be  maintained.  He furthered  that  the Committee's                                                             
minority  members  would not  propose  increased spending  with  the                                                            
exception  of  contract costs,  increased  fuel  costs,  as well  as                                                            
maintaining the existing number of employees.                                                                                   
                                                                                                                                
COR  #1:  This  amendment  adds  $3,324,400  general  funds  to  the                                                            
Administration  and  Operations  BRU,  Office  of  the Commissioner                                                             
component  on page  8  line 33.  Accompanying  explanatory  language                                                            
reads as follows.                                                                                                               
                                                                                                                                
     These funds will be  allocated to Divisions of Institutions and                                                            
     Community   Corrections  to   provide  funds  to  support:   45                                                            
     Correctional   Officers,   5   Adult  Probation   Officers,   2                                                            
     Correctional Industries  Managers, and 1 Administrative Support                                                            
     positions. These existing  positions support a statewide prison                                                            
     population  that is  a 105%  today and  growing. Without  these                                                            
     positions,  virtually  every state  institution  will not  meet                                                            
     their minimal  post levels and this will jeopardize  the safety                                                            
     and  security  of  Institutions  prisoners  and staff.  If  the                                                            
     Department  were to reduce Probation Officers  while the number                                                            
     of offenders  on probation/parole continues to  increase, there                                                            
     would be  an impact on public safety. This will  also keep open                                                            
     all inmate work programs.                                                                                                  
                                                                                                                                
Senator Hoffman moved for adoption.                                                                                             
                                                                                                                                
Senator Ward objected.                                                                                                          
                                                                                                                                
Senator Hoffman read the explanatory statement into the record.                                                                 
                                                                                                                                
Senator  Olson added that  given the increasing  prison populations                                                             
and  decreased  number of  personal,  there  is concern  for  people                                                            
working inside inmate facilities.  He shared that as a physician who                                                            
has worked in  a prison, he was concerned for his  safety and relied                                                            
on  correctional  officers   to maintain   a  safe  environment.  He                                                            
cautioned that without  a safe environment, it would be difficult to                                                            
attract "quality people" to work at the facilities.                                                                             
                                                                                                                                
Co-Chair Donley asked the  amount the committee substitute currently                                                            
provides for  this component over  the amount approved by  the House                                                            
of Representatives.                                                                                                             
                                                                                                                                
Senator Ward answered that  including the unallocated reduction, the                                                            
Senate is funding $7.2  million more than is contained in the budget                                                            
passed by the House of Representatives.                                                                                         
                                                                                                                                
Senator  Hoffman  asserted  that it  is  unfair  to use  the  budget                                                            
approved by the House of  Representatives as a benchmark. He relayed                                                            
that the Democratic members  of the House of Representatives claimed                                                            
that budget  was so flawed  it did not warrant  attempts to  change,                                                            
and therefore the Minority offered no amendments.                                                                               
                                                                                                                                
Co-Chair Donley understood  the argument that additional funds would                                                            
be  necessary   to  accommodate  the   increased  expenses   in  the                                                            
Department of Corrections.  However, he noted the version before the                                                            
Committee is an  increase over the appropriation of  the prior year.                                                            
                                                                                                                                
Senator Ward  commented, "If we had  more money, we certainly  could                                                            
spend  it  on  this."  However,  he stated  that  as  chair  of  the                                                            
Department  of  Corrections  budget  subcommittee,   he prioritized                                                             
within the  spending limitation imposed  by the Senate Majority.  He                                                            
opined that according  to his projections of inmate  population, the                                                            
amount appropriated to  the Department is adequate to ensure safety.                                                            
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Olson and Senator Hoffman                                                                                     
                                                                                                                                
OPPOSED: Senator  Ward, Senator Wilken,  Senator Austerman,  Senator                                                            
Green, Senator Leman, Co-Chair Kelly and Co-Chair Donley                                                                        
                                                                                                                                
The motion FAILED (2-7)                                                                                                         
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
COR  #2: This  amendment adds  $432,300  general  funds and  $28,000                                                            
Receipt  Supported   Services  funds   to  the  Administration   and                                                            
Operations  BRU, Institution Director's  Office component  on page 9                                                            
lines  14  and  15.  Accompanying  explanatory   language  reads  as                                                            
follows.                                                                                                                        
                                                                                                                                
     This  funds the second  year of Chapter  60 SLA 2001,  Page 39,                                                            
     line  6-8 (HB 132) passed  by the Legislature  last year.  This                                                            
     bill   was  an  Act  relating   to  possession,  distribution,                                                             
     importation,  and transportation  of alcohol in a local  option                                                            
     area,  etc.  The  funds  are  needed  to  cover  the  costs  of                                                            
     incarceration   of  new  felons  convicted  of   violating  the                                                            
     provisions of this  legislation. Funding will be distributed by                                                            
     the Director's  Office to individual institutions  as necessary                                                            
     to cover  the impact of the legislation.  Without these  funds,                                                            
     approximately  7 correctional  officers  would have to  be cut,                                                            
     increasing the forced  vacancy in the Division of Institutions.                                                            
     This action  would further jeopardize  the safety and  security                                                            
     of Institutions prisoners and staff.                                                                                       
                                                                                                                                
Senator Hoffman moved for adoption.                                                                                             
                                                                                                                                
Senator Green objected.                                                                                                         
                                                                                                                                
Senator Hoffman read the accompanying language into the record.                                                                 
                                                                                                                                
Senator Hoffman  informed that  he supported  passage of HB  132 the                                                            
previous year,  because "I knew that it was the right  thing to do."                                                            
He furthered that HB 4,  considered by the Committee at the previous                                                            
meeting, is  also beneficial and demonstrates  that the Legislature                                                             
is  "tough on  crime."  However, he  questioned  the  wisdom of  not                                                            
funding provisions of the  earlier legislation in its second year of                                                            
implementation.  He suggested  the Committee  should "put our  money                                                            
where our mouths are."                                                                                                          
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Hoffman and Senator Olson                                                                                     
                                                                                                                                
OPPOSED: Senator  Ward, Senator Wilken,  Senator Austerman,  Senator                                                            
Green, Senator Leman, Co-Chair Kelly and Co-Chair Donley                                                                        
                                                                                                                                
The motion FAILED (2-7)                                                                                                         
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
COR  #3:  This  amendment  adds  $1,910,800  general  funds  to  the                                                            
Administration  and Operations BRU, Inmate Health  Care component on                                                            
page 9 line 8.  Accompanying explanatory language  reads as follows.                                                            
                                                                                                                                
     These  funds   will  support  both  state  permanent   fulltime                                                            
     positions  and contract positions that are absolutely  required                                                            
     to provide  medical, mental health  and dental services  to the                                                            
     Department's  Institutions and  contract Community Residential                                                             
     Centers.  The Department admits approximately  30,000 offenders                                                            
     annually   into  its  institutions   and  the  daily   prisoner                                                            
     population  exceeds 4,600. Without these funds,  the Department                                                            
     will  have  to eliminate  nursing  staff  and  other  important                                                            
     health care services.  The Department has made great strides in                                                            
     implementing  measures  to contain medical  costs and  increase                                                            
     health  care efficiencies.  However,  without  these funds  the                                                            
     Department's  diligent  efforts will be  for naught, and  their                                                            
     ability  to  safely provide  minimal  health care  services  to                                                            
     state prisoners will be seriously jeopardized.                                                                             
                                                                                                                                
Senator Hoffman moved for adoption.                                                                                             
                                                                                                                                
Senator Ward objected.                                                                                                          
                                                                                                                                
Senator Hoffman read the explanatory statement into the record.                                                                 
                                                                                                                                
Senator Olson  commented on the difficulty of health  care delivery,                                                            
especially  in a closed institution  such as  a prison system  where                                                            
disease is easily spread.  He warned that without adequate supplies,                                                            
control of  infectious diseases including  tuberculosis could  "slip                                                            
away". He therefore urged the passage of this amendment.                                                                        
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Halford and Senator Olson                                                                                     
                                                                                                                                
OPPOSED: Senator  Wilken, Senator Austerman, Senator  Green, Senator                                                            
Leman, Senator Ward, Co-Chair Kelly and Co-Chair Donley                                                                         
                                                                                                                                
The motion FAILED (2-7)                                                                                                         
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
COR #4: This amendment  adds $207,100 general funds to the Community                                                            
Residential  Centers  BRU, Existing  Community  Residential  Centers                                                            
component  on page  10 lines  24 and  25.  Accompanying explanatory                                                             
language reads as follows.                                                                                                      
                                                                                                                                
     This  funds  the annualized   cost of  four  renewed  community                                                            
     residential center  contracts that were issued in FY 02 through                                                            
     competitive  bid. Contracts contained  were: 85 beds  at Tundra                                                            
     Center (Bethel), 90  beds Glennwood Center (Anchorage), 31 beds                                                            
     at  Cordova House  (Anchorage),  and 75 beds  at Glacier  Manor                                                            
     (Juneau). Without  these funds, the Department will be required                                                            
     to reduce  halfway house beds  from each of the contracts.  Due                                                            
     to the increased  prisoner population, the Department  does not                                                            
     have  adequate  beds in  institutions  to provide  housing  for                                                            
     these   displaced  offenders.   Additionally,   as   culturally                                                            
     relevant  programming  and offender  supervision  (i.e.,  house                                                            
     arrest)  program slots  are included  in  these contracts,  the                                                            
     cost of  these services may be  impacted by reduction  of beds.                                                            
                                                                                                                                
Senator Hoffman moved for adoption.                                                                                             
                                                                                                                                
Senator Ward objected.                                                                                                          
                                                                                                                                
Senator Hoffman read the explanatory statement into the record.                                                                 
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Hoffman and Senator Olson                                                                                     
                                                                                                                                
OPPOSED: Senator  Austerman, Senator  Green, Senator Leman,  Senator                                                            
Ward, Senator Wilken, Co-Chair Kelly and Co-Chair Donley                                                                        
                                                                                                                                
The motion FAILED (2-7)                                                                                                         
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
COR #5: This  amendment adds $761,100  general funds for  the Out of                                                            
State Contracts BRU, Out-of-State  Contractual component on page 10,                                                            
line 32. Accompanying explanatory language reads as follows.                                                                    
                                                                                                                                
     Provides  funds for continued placement of 30  offenders at the                                                            
     Department's   contract  Central   Arizona  Detention   Center.                                                            
     Without  these funds,  the Department  will need to hold  these                                                            
     prisoners  in  state  facilities   at  an  increased  cost  and                                                            
     regardless  of overcrowding  that  exists  already. The  Agency                                                            
     anticipates  a 4%-5%  growth  rate in the  offender  population                                                            
     annually  resulting in 150-200  more offenders coming  into the                                                            
     correctional  system every year.  Due to the lack of  available                                                            
     in-state institutional  beds, the placement of prisoners in out                                                            
     of  state  facilities   is necessary   to  meet  state  service                                                            
     demands.                                                                                                                   
                                                                                                                                
Senator Hoffman moved for adoption.                                                                                             
                                                                                                                                
Senator Ward objected.                                                                                                          
                                                                                                                                
Senator Hoffman  read the explanatory statement into  the record and                                                            
commented this amendment  could be considered a cost-saving measure,                                                            
as inmates could  continue to be housed in a relatively  inexpensive                                                            
environment.                                                                                                                    
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Hoffman and Senator Olson                                                                                     
                                                                                                                                
OPPOSED:  Senator  Green,  Senator  Leman,   Senator  Ward,  Senator                                                            
Wilken, Senator Austerman, Co-Chair Kelly and Co-Chair Donley                                                                   
                                                                                                                                
The motion FAILED (2-7)                                                                                                         
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
COR #6: This amendment  adds $195,500 general funds  and $37,400 I/A                                                            
Receipts  for  the   Administration  &  Operations  BRU,   Community                                                            
Corrections Director's  Office component on page 10  lines 9 and 10.                                                            
Accompanying explanatory language reads as follows.                                                                             
                                                                                                                                
     This  funds the second  year of  Chapter 60  SLA 2001 (HB  172)                                                            
     passed  by the  Legislature  last year.  This bill  was an  Act                                                            
     relating  to therapeutic courts for offenders  etc. These funds                                                            
     are  to cover  the second  year costs  of the  new Therapeutic                                                             
     Court  legislation.  Funds  will  cover  the  cost of  one  new                                                            
     probation  officer in Anchorage, contractual  services costs to                                                            
     cover communication  costs of new probation officers  in Bethel                                                            
     and Anchorage, and  for leased office support equipment for new                                                            
     probation officers.  The equipment is essential for monitoring,                                                            
     case tracking  and reporting. General funds are  also requested                                                            
     to offset  a loss of interagency funds provided  from a federal                                                            
     program  for the VPSO  monitoring program.  These funds  are no                                                            
     longer available for  the program and the Department would like                                                            
     to  maintain  the VPSO  probation  services provided  by  these                                                            
     funds.                                                                                                                     
                                                                                                                                
Senator Hoffman moved for adoption.                                                                                             
                                                                                                                                
Senator Ward and Senator Green objected.                                                                                        
                                                                                                                                
Senator Hoffman  read a  portion of the  explanatory statement  into                                                            
the  record.  He referenced  testimony  provided  to  the  Committee                                                            
asserting that this program  is successful. He reminded that several                                                            
Committee members  supported HB 172,  the enabling legislation  that                                                            
was adopted a year prior.  He surmised that these legislators prefer                                                            
to campaign  that they are  "tough on crime";  however, he  stressed                                                            
that to accomplish  the intent of the earlier legislation,  adequate                                                            
funding  must be provided  and that  the Committee  must "put  money                                                            
where our mouths  are". He suggested that if the Legislature  was to                                                            
continue  under-funding  this  and similar  programs,  the  enabling                                                            
statutes  should  be  repealed  and  the  Legislature   should  stop                                                            
claiming to be tough on crime.                                                                                                  
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Hoffman and Senator Olson                                                                                     
                                                                                                                                
OPPOSED:  Senator  Leman,  Senator  Ward,  Senator  Wilken,  Senator                                                            
Austerman, Senator Green, Co-Chair Kelly and Co-Chair Donley                                                                    
                                                                                                                                
The motion FAILED (2-7)                                                                                                         
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
COR  #7:  This  amendment   adds  $699,700  general   funds  to  the                                                            
Administration  and Operations  BRU, Southcentral  Region  Probation                                                            
component  on page  10 lines  12 and  13.  Accompanying explanatory                                                             
language reads as follows.                                                                                                      
                                                                                                                                
     Initiative  Request  to provide  funds  to implement  the  Dual                                                            
     Diagnosis for Probationers  and Parolees with Children Program.                                                            
     This  would create  specialized  caseloads  for dual-diagnosed                                                             
     offenders   (men  and  women  with  both  mental   illness  and                                                            
     alcohol/drug   abuse)  with   children  to  facilitate   family                                                            
     reunification  and  stability.  Currently,  the dual-diagnosis                                                             
     population including  the felony DWI population, is the fastest                                                            
     growing group of probation/parole  offenders. The Department of                                                            
     Corrections  2000-2001 data shows that 67.6%  of the identified                                                            
     mentally  ill offenders  were intoxicated  when they  committed                                                            
     their crimes.  In DOC Institutions during the  same year, there                                                            
     were  10,133  mental  health  consultations  and  77.1  %  were                                                            
     identified   as   substance   abuse/alcohol   disordered.   The                                                            
     department will need  to hire additional Probations officers to                                                            
     reduce already high  caseloads and create specialized caseloads                                                            
     for  the   dual  diagnosis  probationers   and  parolees   with                                                            
     children.  This also provides funding for a new  liquor license                                                            
     application check/training passed last year.                                                                               
                                                                                                                                
This amendment was NOT OFFERED.                                                                                                 
                                                                                                                                
COR  #8:   This  amendment  adds  $530,000  general  funds  for  the                                                            
Administration  and Operations  BRU,  Community  Jails component  on                                                            
page 10 line 8. Accompanying  explanatory language reads as follows.                                                            
                                                                                                                                
     The funds are needed  to pay 15 local governments for days when                                                            
     state prisoners are  held in the Community Jails. The Community                                                            
     Jails  program   provides  55,845  man-days  of  incarceration                                                             
     capability   for  the  state  prisoners  pending  arraignment,                                                             
     commitment  by a court, for admission  to a State correctional                                                             
     facility.  Use  of  the local  jail  facilities  includes  pre-                                                            
     arraignment, post-arraignment,  and holding sentenced prisoners                                                            
     up  to 30  days. Due  to legal  process in  the local  Superior                                                            
     Court  and the difficulty of  prisoner transport in  Alaska, it                                                            
     is  not  practical,   nor  is  it  desirable,  to  immediately                                                             
     transport  these  State  prisoners   to  a State  correctional                                                             
     facility.  These funds will help  stabilize the infrastructure                                                             
     needs  of  the local  jail  facilities  to meet  their  mission                                                            
     objectives.                                                                                                                
                                                                                                                                
Senator Hoffman moved for adoption.                                                                                             
                                                                                                                                
Senator Ward objected.                                                                                                          
                                                                                                                                
Senator Hoffman  read a  portion of the  explanatory statement  into                                                            
the record. He added that  the Legislature has a legal obligation to                                                            
pay the  expenses of State  inmates while  they are housed  in local                                                            
government facilities.                                                                                                          
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Olson and Senator Hoffman                                                                                     
                                                                                                                                
OPPOSED: Senator  Ward, Senator Wilken,  Senator Austerman,  Senator                                                            
Green, Senator Leman, Co-Chair Kelly and Co-Chair Donley                                                                        
                                                                                                                                
The motion FAILED (2-7)                                                                                                         
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
COR #9: This  amendment adds $118,000  general funds for  the Parole                                                            
Board  BRU   and  component  on  page   10  line  22.  Accompanying                                                             
explanatory language reads as follows.                                                                                          
                                                                                                                                
     These  funds  are  needed  to accommodate   increased  prisoner                                                            
     hearings  and  Parole  Board activity  relating  to  mandatory,                                                            
     discretionary   and   special  medical   parole  releases   and                                                            
     revocations.  A considerable  increase  in numbers of  hearings                                                            
     and  parole   activity  has   matched  the  growth   in  prison                                                            
     population  that  has  occurred in  the  past five  years,  and                                                            
     expenditures   incurred  in   meeting  the  Board's   statutory                                                            
     obligations have increased  as a result. These funds are needed                                                            
     to  cover Parole Board  member/staff  travel and Board  members                                                            
     compensated   time  associated  with  the  conduct   of  parole                                                            
     activity statewide.                                                                                                        
                                                                                                                                
Senator Hoffman  read a  portion of the  explanatory statement  into                                                            
the record. He  asserted that providing these funds  could lead to a                                                            
decrease of prison overcrowding.                                                                                                
                                                                                                                                
Senator Hoffman moved for adoption.                                                                                             
                                                                                                                                
Senator Ward objected.                                                                                                          
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Hoffman and Senator Olson                                                                                     
                                                                                                                                
OPPOSED: Senator  Ward, Senator Wilken,  Senator Austerman,  Senator                                                            
Green, Senator Leman, Co-Chair Kelly and Co-Chair Donley                                                                        
                                                                                                                                
The motion FAILED (2-7)                                                                                                         
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
Senator  Hoffman commented  that eight  of the  nine appropriations                                                             
proposed in  the Department of Corrections  amendments could  not be                                                            
readdressed by the budget Conference Committee.                                                                                 
                                                                                                                                
Department of Administration                                                                                                  
                                                                                                                                
DAN  SPENCER,   Director,  Division   of  Administrative   Services,                                                            
Department  of  Administration,  testified  to  the efforts  of  the                                                            
Department  to  maintain   expenses,  despite  cost   increases.  He                                                            
specified  the telecom-partnering  agreement  that would save  State                                                            
agencies approximately  $13 million  over the five-year term  of the                                                            
agreement  and   would  also  result  in  $29  million   in  private                                                            
investments to the State's telecommunication system.                                                                            
                                                                                                                                
Mr.  Spencer appreciated  the  additional  funding  provided to  the                                                            
Division  of  Motor  Vehicles  through  the adoption  of  MULTI  #1.                                                            
However,  he qualified  it  would  not cover  the entire  amount  of                                                            
inflationary increases  incurred by the Division,  pointing out that                                                            
the announced  postal rate  increases would  impact the Division  by                                                            
$30,000.                                                                                                                        
                                                                                                                                
Mr. Spencer spoke to the  increased costs to the public broadcasting                                                            
system, reminding the Committee  that State funding had decreased or                                                            
remained the same for the past several years.                                                                                   
                                                                                                                                
Mr.  Spencer  stated  that a  proposed  amendment  relating  to  the                                                            
Pioneers'  Homes  only  addresses  salary  increases  and  does  not                                                            
address other cost increases,  such as fuel or operational supplies.                                                            
                                                                                                                                
Mr. Spencer noted  a proposed amendment to the Alaska  Public Office                                                            
Commission  (APOC) budget  would add funding  for the election  year                                                            
costs.  He informed  that this  has been  done in the  past, and  is                                                            
"basically a maintenance  level" increase. He stated  this amendment                                                            
would also fund  the second-year implementation of  campaign finance                                                            
legislation   vetoed  by   the  Governor   and  overridden   by  the                                                            
Legislature.                                                                                                                    
                                                                                                                                
Mr. Spencer  next explained  the proposed  amendment adding  funding                                                            
for the Division  of Finance is necessary  to maintain the  existing                                                            
payroll system  while the Department  selects a replacement  system.                                                            
He noted  the Department  has also submitted  a request for  capital                                                            
funds to purchase the new system.                                                                                               
                                                                                                                                
Mr.  Spencer  stated  that the  Public  Defender  Agency  (PDA)  has                                                            
requested supplemental  funds for the FY 02 budget. He listed: fewer                                                            
investigators, reduced  travel, and cooperation with the therapeutic                                                            
courts, as some  of the steps the Agency has taken  to "get the best                                                            
bang  for the  buck  for the  entire criminal  justice  system."  He                                                            
informed that  the PDA utilizes a  case management system  developed                                                            
by a Legal Secretary rather than an outside computer specialist.                                                                
                                                                                                                                
Mr. Spencer continued  that the Office of Public Advocacy  (OPA) has                                                            
also requested supplemental  funding for FY 02 of over $1.8 million.                                                            
He emphasized  that, like the PDA, the OPA has continued  to have an                                                            
increased caseload,  although it has  not received adequate  funding                                                            
in  initial   appropriations   and  has   required  a  supplemental                                                             
appropriation  in 14 of the past 15 years. He stressed  there is "no                                                            
way that the  existing budget proposal  before you" would  allow the                                                            
Office to avoid an additional  supplemental budget request "unless a                                                            
miracle happens,  which we  don't expect."  He pointed out  that the                                                            
court-appointed   special  advocate  (CASA)  program   that  handles                                                            
guardian  ad  litem cases  and  operates  within  the OPA,  had  188                                                            
volunteers who served over  20,000 hours, which saved the State over                                                            
$750,000.                                                                                                                       
                                                                                                                                
Mr. Spencer appreciated  the State's budget situation,  but stressed                                                            
that the population  of Alaska is increasing, along  with caseloads,                                                            
and  costs. He  remarked  that in  attempting  to serve  the  entire                                                            
population  with  less funding,  "it's  like we're  going  backwards                                                            
while we're trying to improve."                                                                                                 
                                                                                                                                
Senator  Hoffman   asked  the  importance   of  the  Department   of                                                            
Administration's   $293,000  request   to  for  the  AKPAY   payroll                                                            
accounting  system. He wanted to know  the consequences of  a system                                                            
failure  and  the  subsequent  inability  for  the  State  to  "meet                                                            
payroll" and conduct other functions in a timely manner.                                                                        
                                                                                                                                
Mr. Spencer  clarified that  this item is  included in ADMIN  #6 and                                                            
replied that three additional  programmers were hired to operate the                                                            
system because  programming changes must be made daily  to keep pace                                                            
with updated  bargaining unit  contracts, tax  law changes,  etc. He                                                            
furthered  that  the  vendor  of  the  existing  system  would  soon                                                            
discontinue providing support.  He stated that while a new system is                                                            
selected,  the  "underlying  database  management  system"  must  be                                                            
converted to allow  it to continue operating after  the vendor stops                                                            
supporting the existing  system. He projected a failure would impact                                                            
between $20,000 to $30,000 Alaskans and their families.                                                                         
                                                                                                                                
Senator Hoffman asked if  a failure of this system would disrupt the                                                            
electronic transaction of paychecks and other warrants.                                                                         
                                                                                                                                
Mr. Spencer answered that it conceivably could.                                                                                 
                                                                                                                                
Senator  Hoffman   announced  the  proposed  amendment   (ADMIN  #6)                                                            
relating  to the  AKPAY system  would not  be offered,  as it  would                                                            
create a new budget component  and the Senate Minority had committed                                                            
to  not  request  funding  for  new  programs   or  projects.  [This                                                            
amendment is detailed below.]                                                                                                   
                                                                                                                                
ADMN #1: This  amendment adds $204,300 general funds  for the Alaska                                                            
Public Offices  Commission BRU and component on page  5 lines 15 and                                                            
16. Accompanying explanatory language reads as follows.                                                                         
                                                                                                                                
     This  amendment  restores  funding for  APOC to  implement  the                                                            
     campaign  disclosure law changes  passed by the legislature  as                                                            
     an  override  of  the  Governor's  veto  of  SB  103  (Election                                                            
     Campaigns  and  Legislative  Ethics).  It  would  also  restore                                                            
     funding for  election year activities, which  has been included                                                            
     in  the budget  in the  past  during statewide  elections,  and                                                            
     cover some additional costs for positions.                                                                                 
     Adopting  this budget jeopardizes  the Commission's  ability to                                                            
     disseminate  information  to  the  public  in a  timely  manner                                                            
     during the  campaign. Campaign finance information  is required                                                            
     by law  to be provided  to the Commission  before the  election                                                            
     but will most likely  not be available until after the election                                                            
     has  occurred.  Without  funding  for  printing,  training  and                                                            
     support  staff,  the  Commission   will  be  unable  to  assist                                                            
     candidates  and political groups  to understand the  changes to                                                            
     the  campaign  disclosure  laws, which  will likely  result  in                                                            
     costly complaints and substantial non-compliance.                                                                          
                                                                                                                                
Senator Olson moved for adoption.                                                                                               
                                                                                                                                
Senator Ward objected.                                                                                                          
                                                                                                                                
Senator Olson  read the  explanatory statement  into the record.  He                                                            
noted that  during the  veto and  veto override  process the  fiscal                                                            
note accompanying  SB 103 was eliminated,  resulting in an  unfunded                                                            
mandate.                                                                                                                        
                                                                                                                                
Senator Hoffman expressed,  "What were we thinking? We spent all the                                                            
time to  get this  legislation passed.  We thought  it so  important                                                            
that we challenged the  Governor in his veto, and then in all of our                                                            
infinite wisdom, we don't appropriate the money."                                                                               
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Hoffman and Senator Olson                                                                                     
                                                                                                                                
OPPOSED:  Senator  Green,  Senator  Leman,   Senator  Ward,  Senator                                                            
Wilken, Senator Austerman, Co-Chair Kelly and Co-Chair Donley                                                                   
                                                                                                                                
The motion FAILED (2-7)                                                                                                         
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
ADMN #2: This amendment  adds $2,126,900 general funds, $4,500 GF/PR                                                            
(Program Receipts),  and $2,900 GF/MH  (Mental Health) funds  to the                                                            
Legal and Advocacy  Services BRU,  Public Defender Agency  component                                                            
on  page 5  line  12. Accompanying  explanatory  language  reads  as                                                            
follows.                                                                                                                        
                                                                                                                                
     This  amendment  restores  the Pubic  Defender's  budget to  an                                                            
     amount  that is $500,000  less than the  about proposed  by the                                                            
     Governor.  This would provide sufficient resources  to maintain                                                            
     services  at the current year level as well as  provide funding                                                            
     for  alcohol initiative  fiscal notes,  which were underfunded                                                             
     last  year.   It  will  also  provide  funding  for   attorneys                                                            
     representing  parents  in parental  rights  termination  cases.                                                            
     Funding  for these  positions  was previously  included in  the                                                            
     Department   of  Health   and  Social   Services  budget,   but                                                            
     eliminated  in FY 02  without a corresponding  increase  in the                                                            
     Public Defender budget.                                                                                                    
     The   Public   Defender   is   already   shortfunded,   needing                                                            
     approximately  $600,000  in  supplemental  funding  for FY  02.                                                            
     Accepting  this  budget means  the  Public Defender  will  need                                                            
     another supplemental appropriation next year.                                                                              
     Right  to counsel  is a constitutional  right  provided to  all                                                            
     Americans,  as stated in the US constitution  and reiterated in                                                            
     the  Alaska Constitution  in Article I,  Section II. For  those                                                            
     unable  to afford  an  attorney, the  courts  appoint a  public                                                            
     defender.  Cases are assigned to the Public Defender  Agency by                                                            
     the  courts and the  Public Defender  cannot refuse the  cases.                                                            
     When  assigned  a  case,  the  agency  must  provide  effective                                                            
     assistance of counsel.                                                                                                     
                                                                                                                                
AND                                                                                                                             
                                                                                                                                
ADMN #3: This  amendment adds $2,271,100  general funds and  $20,700                                                            
GF/MH for  the Legal  and Advocacy  Services BRU,  Office of  Public                                                            
Advocacy  component.  Accompanying  explanatory  language  reads  as                                                            
follows.                                                                                                                        
                                                                                                                                
     This  eliminates funding  for  the OPA to  promptly  compensate                                                            
     contract  attorneys  for  their  services  in  both  civil  and                                                            
     criminal representation of clients.                                                                                        
     All  OPA cases result  from court appointments  and OPA  cannot                                                            
     refuse to  take them. For 14 of the last 15 years,  OPA has had                                                            
     to get supplemental  funding to cover its costs. For FY 02, OPA                                                            
     has a  supplemental request for  more than $1.8 million  before                                                            
     the  legislature.   There  is  no  way  OPA  can  hold  to  the                                                            
     Subcommittee's   proposed  budget  unless   there  is  a  huge,                                                            
     completely unforeseen  caseload drop. Nobody has forecast that;                                                            
     in  fact, OPA's  caseload has  been rising  over the years.  If                                                            
     this  budget  is adopted,  OPA will  have  to ask  for a  large                                                            
     supplemental again next session.                                                                                           
                                                                                                                                
Senator Olson moved for adoption of ADMN #2 and ADMN #3.                                                                        
                                                                                                                                
Senator Ward objected.                                                                                                          
                                                                                                                                
Senator Olson  explained that the funds requested  would be utilized                                                            
for contractual  services  of attorneys to  represent defendants  as                                                            
directed  by the  Alaska Court  System.  He cautioned  that  without                                                            
adequate funding, the agencies  would "spiral down" in their ability                                                            
to  advocate  for  the parties  it  represents.  He  read  from  the                                                            
explanatory statements.                                                                                                         
                                                                                                                                
                                                                                                                                
SFC 02 # 78, Side B 08:50 PM                                                                                                    
                                                                                                                                
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Hoffman and Senator Olson                                                                                     
                                                                                                                                
OPPOSED:  Senator  Leman,  Senator  Ward,  Senator  Wilken,  Senator                                                            
Austerman, Senator Green, Co-Chair Kelly and Co-Chair Donley                                                                    
                                                                                                                                
The motion FAILED (2-7)                                                                                                         
                                                                                                                                
The amendments FAILED to be adopted.                                                                                            
                                                                                                                                
ADMN #4:  This amendment  adds $403,300 general  funds and  $234,100                                                            
GF/MH for  the Alaska  Longevity Programs  Management BRU,  Pioneers                                                            
Homes  component  on  page  4  line  20.  Accompanying  explanatory                                                             
language reads as follows.                                                                                                      
                                                                                                                                
     The Pioneers' Homes  are currently operating with approximately                                                            
     90 beds empty  because staffing is insufficient  to provide the                                                            
     24-hour  care that  the people  on the  Pioneers' Home  waiting                                                            
     list  need. If  this $637,400  is not restored,  the  Pioneers'                                                            
     Homes  will have to hold more  staff positions vacant,  meaning                                                            
     more beds  will be held vacant.  That will, in turn,  result in                                                            
     less revenue  (Pioneers' Home Receipts), which  will exacerbate                                                            
     the GF cuts.                                                                                                               
     One  of   the  Legislature's   performance  measures   for  the                                                            
     Pioneers'  Homes is the average number of vacant  beds by level                                                            
     of care and  Pioneers' Home. The total effect  of this cut will                                                            
     be to  force another 10 to 16  beds vacant. Most of  these will                                                            
     be in  Anchorage because  it is the only  home large enough  to                                                            
     allow  the reduction  of  staff necessary  to  meet the  budget                                                            
     reduction without having to close an entire unit.                                                                          
                                                                                                                                
Senator Olson moved for adoption.                                                                                               
                                                                                                                                
Senator Ward objected.                                                                                                          
                                                                                                                                
Senator Olson commented that each Committee member has aging                                                                    
parents and could themselves become residents of the Pioneers'                                                                  
Homes. He read the explanatory statement into the record.                                                                       
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Olson and Senator Hoffman                                                                                     
                                                                                                                                
OPPOSED: Senator Ward, Senator Wilken, Senator Green, Senator                                                                   
Leman, Co-Chair Kelly and Co-Chair Donley                                                                                       
                                                                                                                                
The motion FAILED (2-7)                                                                                                         
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
ADMN #5: This  amendment adds $69,900  general funds for  the Public                                                            
Communications Services  BRU, Public Broadcasting-Radio component on                                                            
page 4 line 9.  Accompanying explanatory language  reads as follows.                                                            
                                                                                                                                
     This  cut will  mean  the loss  of  an additional  $130,000  in                                                            
     federal matching  funds. As many as 8 more full  time jobs will                                                            
     be lost  because of this cut.  Stations are already  at minimum                                                            
     staffing  levels. Additional  staff reductions could  result in                                                            
     elimination  of  local programming  including  news and  public                                                            
     affairs.                                                                                                                   
     Public  broadcasters   have  done  more  than  their  share  to                                                            
     eliminate all but  the essentials from their own budgets. After                                                            
     a decade  and a half of state operating budget  reductions, the                                                            
     public broadcasting  system in Alaska is delicately balanced to                                                            
     the  point where  damage  to any of  its components  risks  the                                                            
     collapse of the rest.                                                                                                      
     Public radio is not  an amenity for Alaskan communities because                                                            
     public  broadcasting provides  a unique and vital service  as a                                                            
     major  cohesive force  bringing the state  together with  news,                                                            
     information and educational programming.                                                                                   
                                                                                                                                
Senator Olson moved for adoption.                                                                                               
                                                                                                                                
Senator Ward objected.                                                                                                          
                                                                                                                                
Senator Olson  read the  explanatory statement  into the record.  He                                                            
stressed  the importance  of public  radio to  broadcast reports  of                                                            
inclement weather  as well as relaying  important messages  to rural                                                            
communities with limited  access to other forms of communication. He                                                            
spoke of the  closure of the Kotzebue  public radio station  and the                                                            
subsequent decrease of communications in that region.                                                                           
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Hoffman and Senator Olson                                                                                     
                                                                                                                                
OPPOSED:  Senator  Ward,  Senator  Wilken,  Senator  Green,  Senator                                                            
Leman, Co-Chair Kelly and Co-Chair Donley                                                                                       
                                                                                                                                
The motion FAILED (2-7)                                                                                                         
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
ADMN  #6:  This  amendment  adds  $293,500  general  funds  for  the                                                            
Centralized Administrative  Services BRU, Finance  component on page                                                            
2 line 21. Accompanying explanatory language reads as follows.                                                                  
                                                                                                                                
     This  amendment restores  $225,600 requested  to add three  new                                                            
     payroll system programmers  and $67,900 to maintain the current                                                            
     staffing level.                                                                                                            
     The  State's payroll  system, AKPAY,  is 12  years old and  the                                                            
     software vendor has  indicated that future maintenance releases                                                            
     will  no  longer  support  the  existing  underlying   database                                                            
     management system.  Before the next major maintenance update in                                                            
     FY 03/FY  04, the State  must convert  the AKPAY database  from                                                            
     ADABAS  to DB2. This is a very  large project and is  more than                                                            
     existing staff can  handle. Without additional programmers, the                                                            
     probability of system failure is greatly increased.                                                                        
     The  payroll system  supports every  activity  of the State  of                                                            
     Alaska.  Its importance is reflected  in two of the  divisions'                                                            
     performance  measures assigned by the legislature:  system down                                                            
     time and amount of  penalty pay. In the case of system failure,                                                            
     both of these measures will increase significantly.                                                                        
                                                                                                                                
This amendment was NOT OFFERED.                                                                                                 
                                                                                                                                
Department of Community and Economic Development (cont.)                                                                      
                                                                                                                                
JEFF  BUSH,  Deputy   Commissioner,  Department  of   Community  and                                                            
Economic  Development  testified that  the Power  Cost Equalization                                                             
(PCE) program  remains unfunded in the current version  of the FY 03                                                            
operating  budget.  He pointed  out that  adoption  of the  proposed                                                            
amendments  before the  Committee  would provide  $15.7 million  for                                                            
this  program, or  85 percent  of necessary  funding  and that  pro-                                                            
rationing would be required.                                                                                                    
                                                                                                                                
Mr.  Bush next  spoke to  concerns  about the  $284,000 unallocated                                                             
budget  reduction  to the  Department  and  asked the  Committee  to                                                            
reduce or eliminate this decrease.                                                                                              
                                                                                                                                
Mr. Bush then addressed  a proposed amendment relating to the use of                                                            
Alaska  Science and  Technology Foundation  (ASTF)  funding for  the                                                            
University  of  Alaska.  He explained  that  the  current  committee                                                            
substitute  provides   that  approximately  $2.3   million  of  ASTF                                                            
endowment funds  would be appropriated to the University.  He stated                                                            
this  would allow  projects  to  be undertaken  by  the Foundation;                                                             
however, this would be  the first time funds would be withdrawn from                                                            
the  principle.  He  relayed  concerns   about  this  precedent  and                                                            
expressed  the fund  should be  protected  "for the  purpose it  was                                                            
created."                                                                                                                       
                                                                                                                                
Mr. Bush  commented  that C&ED #1,  adopted earlier  in the  hearing                                                            
makes C&ED #4 unnecessary.                                                                                                      
                                                                                                                                
AT EASE 8:59 PM / 9:06 PM                                                                                                       
                                                                                                                                
C&ED  #2: This  amendment  adds $15,700,000  general  funds for  the                                                            
Rural  Energy Programs  BRU, Power  Cost Equalization  component  on                                                            
page 7 line  22. Accompanying explanatory  language reads,  "General                                                            
funds  are  needed   in  the  Power  Cost  Equalization   and  Rural                                                            
Capitalization Fund to maintain the program."                                                                                   
                                                                                                                                
Senator Olson moved for adoption.                                                                                               
                                                                                                                                
Senator Ward objected.                                                                                                          
                                                                                                                                
Senator Olson  noted this  amendment would  provide the same  amount                                                            
appropriated  to this  program the  prior year.  He emphasized  this                                                            
program  is  vital  to areas  of  the  State where  the  expense  of                                                            
electricity  is "almost unaffordable"  for many rural residents.  He                                                            
informed  that  the  costs  have  increased  greatly,  and  that  to                                                            
conserve energy,  some residents have  unscrewed the light  bulbs in                                                            
their refrigerators.                                                                                                            
                                                                                                                                
Senator Hoffman furthered "this is a wonderful program."                                                                        
                                                                                                                                
Senator Leman  noted it is  anticipated that  this program  would be                                                            
funded "in another vehicle."                                                                                                    
                                                                                                                                
Senator  Olson remarked  that  it  is reassuring  to  hear from  the                                                            
Senate  Majority Leader  and  asked if  the program  would be  fully                                                            
funded.                                                                                                                         
                                                                                                                                
Senator  Leman replied,  "The  PCE recipients  would  be  adequately                                                            
taken care of."                                                                                                                 
                                                                                                                                
Senator  Olson commented  "with all  due respect"  this reassurance                                                             
would not  necessarily "keep  the lights on"  for many families  and                                                            
elderly living in rural Alaska.                                                                                                 
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Hoffman and Senator Olson                                                                                     
                                                                                                                                
OPPOSED: Senator Green,  Senator Leman, Senator Ward, Senator Wilken                                                            
Senator Austerman, Co-Chair Kelly and Co-Chair Donley                                                                           
                                                                                                                                
The motion FAILED (2-7)                                                                                                         
                                                                                                                                
This amendment FAILED to be adopted.                                                                                            
                                                                                                                                
C&ED  #3:  This  amendment  adds  $262,900  general   funds,  $9,300                                                            
GF/matching   funds,  and  $11,900   GF/Program  Receipts   for  the                                                            
Commissioner's   Office  BRU,  Agency-Wide   Unallocated   Reduction                                                            
component  on  page  6  lines  6 and  7.  Accompanying  explanatory                                                             
language reads as follows.                                                                                                      
                                                                                                                                
     $184,800  of the reduction  is equal to  the general fund  year                                                            
     three  labor costs.  If this  unallocated  reduction was  taken                                                            
     where  the  labor  costs  were  incurred,  we  would  make  the                                                            
     reductions  in the  following  components, all  of which  would                                                            
     have  a  difficult  time  absorbing  the  reduction  and  still                                                            
     maintain an acceptable level of service.                                                                                   
     When determining where  the additional unallocated general fund                                                            
     reduction  of $99,300 would be taken, the Department  attempted                                                            
     to balance: (a) the  year 3 general fund labor costs reduction,                                                            
     (b)  the   subcommittee's  intent   language  for  no   further                                                            
     reductions to QTA;  and (c) the assumption that reductions were                                                            
     unacceptable in Revenue  Sharing and Safe Communities. The only                                                            
     BRU  that has  general funds  and  is unaffected  by the  above                                                            
     conditions  is the Rural  Energy Programs  BRU. This  reduction                                                            
     will force  the program to cut  back to a minimal preventative                                                             
     maintenance  schedule to rural  electric systems and  eliminate                                                            
     on-site training to operators.                                                                                             
     The  unallocated reductions  will be  taken from the  following                                                            
     components:                                                                                                                
             · Community and Business Development ($96,800)                                                                     
             · Division    of   International    Trade    &   Market                                                            
                Development ($28,700)                                                                                           
             · Division of Administrative Services/Commissioner's                                                               
                Office ($49,000)                                                                                                
             · Occupational Licensing ($10,300)                                                                                 
             · Rural Energy Circuit Rider Program ($99,300)                                                                     
                                                                                                                                
Senator Olson cautioned about the impacts of unallocated budget                                                                 
reductions and moved for adoption of the amendment.                                                                             
                                                                                                                                
Senator Ward and Co-Chair Donley objected.                                                                                      
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Hoffman and Senator Olson                                                                                     
                                                                                                                                
OPPOSED: Senator Leman, Senator Ward, Senator Wilken, Senator                                                                   
Austerman, Senator Green, Co-Chair Kelly and Co-Chair Donley                                                                    
                                                                                                                                
The motion FAILED (2-7)                                                                                                         
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
C&ED #4: This  amendment adds $160,000 for the Community  Assistance                                                            
&  Economic Development  BRU,  Community  and  Business Development                                                             
component  on  page 6  lines  13 and  14. Accompanying  explanatory                                                             
language reads as follows.                                                                                                      
                                                                                                                                
     This  amendment  restores  the $160,000  from  the Division  of                                                            
     Community  and  Business  Development's  (CBD)  FY  03  budget,                                                            
     deleted through passage of amendment MULTI #1.                                                                             
     Apparently,  the  reduction was  to be  taken  from the  Alaska                                                            
     Regional  Development  Organizations (ARDOR)  program  however,                                                            
     the ARDOR program  is funded with Interagency Receipts from the                                                            
     Alaska Industrial Development and Export Authority (AIDEA).                                                                
     If this amendment  is not approved, the existing decrement will                                                            
     result  in the  deletion of  three positions:  a developmental                                                             
     specialist  in Bethel and two  Juneau based positions:  a part-                                                            
     time  mining   and  minerals  development  specialist   and  an                                                            
     administrative assistant.                                                                                                  
                                                                                                                                
This amendment was NOT OFFERED due to action taken on C&ED #1.                                                                  
                                                                                                                                
Department of Education and Early Development                                                                                 
                                                                                                                                
KAREN REHFELD,  Director, Education Support Services,  Department of                                                            
Education  and Early Development,  testified  that the six  proposed                                                            
amendments are intended  to restore funding for existing services at                                                            
current levels. She furthered  that these amendments would allow the                                                            
Department  to continue training programs  at the Alaska  Vocational                                                            
Technical Center  (AVTC) in Seward,  the Kotzebue Technical  Center,                                                            
the State Museum and the State Library.                                                                                         
                                                                                                                                
Ms.  Rehfeld  characterized  E&ED  #1  as  addressing  the  greatest                                                            
concern relating  to the statewide assessment program.  She informed                                                            
that the  Department  is on schedule  to implement  the high  school                                                            
graduation qualifying  examinations for those students  eligible for                                                            
a diploma in the class  of 2004. She stated the funding is necessary                                                            
to continue  a contractual relationship  with McGraw-Hill  to ensure                                                            
that students  receive the "proper instruction" and  an "appropriate                                                            
education".  She also spoke to the  data collection and compilation                                                             
required for this program.                                                                                                      
                                                                                                                                
Ms. Rehfeld then  addressed an amendment to the language  section of                                                            
the committee  substitute that relating to funding  for the Learning                                                            
Opportunity Grants.  She appreciated the funding allocated  with the                                                            
adoption  of MULTI  #1, noting  it "is  essential  to providing  our                                                            
instructional  programs   across  the  State,  particularly  to  our                                                            
students  that   are  struggling  in  meeting  some   of  our  State                                                            
standards."  She expressed however,  that this allocation  should be                                                            
made through the  public school funding program because  the formula                                                            
accounts for school size and the cost of providing services.                                                                    
                                                                                                                                
E&ED  #1: This  amendment  adds  $1,070,600  general funds  for  the                                                            
Teaching  and Learning  Support BRU,  Quality  Schools component  on                                                            
page  11  line  26.  Accompanying  explanatory   language  reads  as                                                            
follows.                                                                                                                        
                                                                                                                                
     This   amendment  fully  funds   contract  costs  for   ongoing                                                            
     development  and implementation  of the High School  Graduation                                                            
     Qualifying  Exam ($340,600),  and expands the State's  capacity                                                            
     to  provide  for  a meaningful   school accountability   system                                                            
     ($730,000).                                                                                                                
     The amendment enables  the Department to implement AS 14.03.075                                                            
     and  AS 14.03.120-123  that requires  students, beginning  with                                                            
     the Class  of 2004, to pass all three parts of  the High School                                                            
     Graduation  Qualifying Exam in  order to receive a high  school                                                            
     diploma.                                                                                                                   
     Further,  the  amendment   provides  the  Department  with  the                                                            
     capacity to meet the  statutory data reporting requirements and                                                            
     a designation  of school performance  based on such  data. Four                                                            
     new  positions will  provide the ability  to collect,  analyze,                                                            
     validate,  and  report  meaningful,  consistent  data  that  is                                                            
     critical to the school accountability system.                                                                              
                                                                                                                                
Senator Hoffman moved for adoption.                                                                                             
                                                                                                                                
Senator Wilken objected.                                                                                                        
                                                                                                                                
Senator Hoffman  read the explanatory statement into  the record. He                                                            
furthered  that the  Committee  members  have supported  efforts  to                                                            
establish education standards.                                                                                                  
                                                                                                                                
Senator  Wilken  pointed out  that  the $340,600  indicated  in  the                                                            
explanatory  statement is  the remainder of  a $770,000 request  for                                                            
on-going  development   and  implementation   of  the  high   school                                                            
graduation  qualifying  examinations.  He  stated  that  along  with                                                            
funding $429,400  with "available monies", a commitment  was made to                                                            
appropriate  $498,000   for  the FY  02  supplemental   budget.  The                                                            
combination  of these appropriations,  he assured, would  fully fund                                                            
this item.                                                                                                                      
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Hoffman and Senator Olson                                                                                     
                                                                                                                                
OPPOSED:  Senator  Green,  Senator  Leman,   Senator  Ward,  Senator                                                            
Wilken, Senator Austerman, Co-Chair Kelly and Co-Chair Donley                                                                   
                                                                                                                                
The motion FAILED (2-7)                                                                                                         
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
E&ED #2: This  amendment adds $75,000  general funds for  the Alaska                                                            
Vocational Technical Center  Operations BRU and component on page 13                                                            
lines 7 and 8.  Accompanying explanatory language  reads as follows.                                                            
                                                                                                                                
     This  amendment  restores  funding  for  a  Marine Educational                                                             
     instructional  position  for  the maritime  simulator  training                                                            
     program,  which will otherwise  not offer the highest  level of                                                            
     training in the Unlimited  Master license category as requested                                                            
     by the maritime industry.                                                                                                  
                                                                                                                                
Senator Hoffman moved for adoption.                                                                                             
                                                                                                                                
No objection was voiced.                                                                                                        
                                                                                                                                
Senator Hoffman read the explanatory statement into the record.                                                                 
                                                                                                                                
Senator Olson  spoke to the  importance of  marine pilots and  their                                                            
ability to avoid marine accidents.                                                                                              
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Hoffman and Senator Olson                                                                                     
                                                                                                                                
OPPOSED: Senator  Austerman, Senator  Green, Senator Leman,  Senator                                                            
Ward, Senator Wilken, Co-Chair Kelly and Co-Chair Donley                                                                        
                                                                                                                                
The motion FAILED (2-7)                                                                                                         
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
E&ED  #3:  This  amendment  adds  $130,000  general  funds  for  the                                                            
Kotzebue  Technical Center  Operations  Grant BRU  and component  on                                                            
page 12 lines 31 and 32.                                                                                                        
                                                                                                                                
Senator Olson moved for adoption.                                                                                               
                                                                                                                                
Senator Wilken objected.                                                                                                        
                                                                                                                                
Senator Olson  explained this appropriation  would allow  the Center                                                            
to continue performing.  He listed the technical training offered in                                                            
the  fields  of health,  office  occupation,  business,   industrial                                                            
technology, industrial  mine maintenance and adult  basic education.                                                            
He cautioned that  without this funding, the Center  would realize a                                                            
22 percent  reduction  to the Center's  general  fund budget,  which                                                            
would impact the facility's  ability to operate vocational technical                                                            
training programs.                                                                                                              
                                                                                                                                
Senator  Olson  detailed  the  Licensed  Practical   Nurse  training                                                            
program planned to begin the following year.                                                                                    
                                                                                                                                
AT EASE 9:20 PM / 9:21 PM                                                                                                       
                                                                                                                                
Senator Wilken pointed  out that the Governor had requested $600,000                                                            
for this purpose  and the committee  substitute allocates  $470,000.                                                            
He reminded that two years  prior an additional annual appropriation                                                            
of  approximately  $500,000  was  established  using  the  Statewide                                                            
Training  Employment Program  (STEP) funds.  Therefore, he  surmised                                                            
the programs could absorb the $130,000 reduction.                                                                               
                                                                                                                                
Senator Olson  asserted that reducing funding for  these programs is                                                            
a disservice  to the State given the  anticipated construction  of a                                                            
natural gas  pipeline and other economic  development projects  that                                                            
require skilled  workers. He stated that it is beneficial  to employ                                                            
Alaskans for these positions rather than import workers.                                                                        
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Hoffman and Senator Olson                                                                                     
                                                                                                                                
OPPOSED:  Senator  Green,  Senator  Leman,   Senator  Ward,  Senator                                                            
Wilken, Senator Austerman, Co-Chair Kelly and Co-Chair Donley                                                                   
                                                                                                                                
The motion FAILED (2-7)                                                                                                         
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
E&ED #4:  This amendment  adds $200,000 general  funds for  the K-12                                                            
Support  BRU,  Community  Schools  component  on  page 11  line  20.                                                            
Accompanying explanatory language reads as follows.                                                                             
                                                                                                                                
     This amendment restores the community schools program funding                                                              
     to the FY 02 amount, which is the minimal amount to even make                                                              
      community schools programs viable on a statewide basis.                                                                   
                                                                                                                                
Senator Hoffman moved for adoption.                                                                                             
                                                                                                                                
Senator Wilken and Senator Green objected.                                                                                      
                                                                                                                                
Senator Hoffman read the explanatory statement into the record.                                                                 
                                                                                                                                
Senator Wilken  emphasized this program  received no funding  in the                                                            
budget approved  by the House of Representatives.  He determined  it                                                            
is  a  priority  item   and  recommended  the  $300,000   allocation                                                            
reflected in the committee substitute.                                                                                          
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Hoffman and Senator Olson                                                                                     
                                                                                                                                
OPPOSED:  Senator  Leman,  Senator  Ward,  Senator  Wilken,  Senator                                                            
Austerman, Senator Green, Co-Chair Kelly and Co-Chair Donley                                                                    
                                                                                                                                
The motion FAILED (2-7)                                                                                                         
                                                                                                                                
This amendment FAILED to be adopted.                                                                                            
                                                                                                                                
E&ED #5: This  amendment adds $100,000 general funds  for the Alaska                                                            
Library and  Museums BRU,  Library Operations  component on  page 13                                                            
line 16. Accompanying explanatory language reads as follows.                                                                    
                                                                                                                                
     This amendment restores the Statewide Library Electronic                                                                   
     Doorway  (SLED)  funding   to provide   hardware  and  software                                                            
     maintenance and upgrades,  personnel costs for updating the web                                                            
     site  and  the help  desk,  and leverage  for  acquiring  other                                                            
     federal and  private monies to begin work on  a virtual/digital                                                            
     library for Alaska.                                                                                                        
                                                                                                                                
Senator Hoffman moved for adoption.                                                                                             
                                                                                                                                
Senator Ward and Senator Green objected.                                                                                        
                                                                                                                                
Senator Hoffman read the explanatory statement into the record.                                                                 
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Olson and Senator Hoffman                                                                                     
                                                                                                                                
OPPOSED: Senator Leman, Senator Ward, Senator Wilken, Senator                                                                   
Austerman, Senator Green, Co-Chair Kelly and Co-Chair Donley                                                                    
                                                                                                                                
The motion FAILED (2-7)                                                                                                         
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
E&ED #6: This amendment adds $60,000 for the Alaska Library and                                                                 
Museums BRU, Museum Operations component on page 13 line 16.                                                                    
Accompanying explanatory language reads as follows.                                                                             
                                                                                                                                
     This amendment restores personal services and travel funds,                                                                
     which directly effect the museums' ability to maintain their                                                               
     current hours and services.                                                                                                
                                                                                                                                
Senator Hoffman moved for adoption.                                                                                             
                                                                                                                                
Senator Ward objected.                                                                                                          
                                                                                                                                
Senator Hoffman read the explanatory statement into the record.                                                                 
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Olson and Senator Hoffman                                                                                     
                                                                                                                                
OPPOSED: Senator Ward, Senator Wilken, Senator Austerman, Senator                                                               
Green, Senator Leman Co-Chair Kelly and Co-Chair Donley                                                                         
                                                                                                                                
The motion FAILED (2-7)                                                                                                         
                                                                                                                                
Department of Environmental Conservation                                                                                      
                                                                                                                                
DEC  #1: This  amendment adds  $907,000  general  funds and  $36,800                                                            
GF/Program Receipts to  the Air and Water Quality BRU, Water Quality                                                            
component  and  $302,700  general   funds  and  $553,400  Clean  Air                                                            
Protection Funds  to the same BRU, Air Quality component  on page 14                                                            
lines 14 and 15.                                                                                                                
                                                                                                                                
This  amendment  also  adds  $451,200 general  funds  to  the  Spill                                                            
Prevention  and Response  BRU,  Industry Preparedness  and  Pipeline                                                            
Operations  component and  $244,000 general  funds to the same  BRU,                                                            
Prevention and Emergency  Response component on page 14 lines 27-30.                                                            
                                                                                                                                
This   amendment   also  adds   $125,000   general   funds  to   the                                                            
Environmental  Health BRU,  Statewide Public  Services component  on                                                            
page 14 line 11.                                                                                                                
                                                                                                                                
Accompanying explanatory language reads as follows.                                                                             
                                                                                                                                
     Allow the  State to assure responsible development  of Alaska's                                                            
     oil and  gas resources through  the oil safety and development                                                             
     initiative.  Failure to fund this initiative  continues to mean                                                            
     that  the State  is minimally  funded  to oversee  current  oil                                                            
     development,  much less  anticipated growth  or the opening  of                                                            
     ANWR [Arctic National Wildlife Refuge].                                                                                    
                                                                                                                                
This amendment was NOT OFFERED.                                                                                                 
                                                                                                                                
Department of Fish and Game                                                                                                   
                                                                                                                                
FRANK  RUE, Commissioner,  Department  of Fish  and Game,  testified                                                            
that  over  the  previous   ten  years,  the  Department   has  lost                                                            
approximately  $20 million,  or 25 percent,  of general funds.  As a                                                            
result,  he stated  the Department  is  "mostly a  federally  funded                                                            
agency at this  point." Of the remaining general funds  appropriated                                                            
to  the  Department,  he noted  that  approximately  85  percent  is                                                            
allocated  to  commercial  fisheries  programs.  He  commented  that                                                            
commercial fisheries produce jobs for people in Alaska.                                                                         
                                                                                                                                
Mr. Rue told the Committee  that the proposed budget of $1.7 million                                                            
less than  the current year,  $1.4 million  of which is unallocated                                                             
budget  reductions,  would require  programs  to be  eliminated.  He                                                            
explained  that the  reduction is  so large that  the Department  is                                                            
unable  to absorb  the losses  and "just  do everything  badly."  He                                                            
listed  the  three  programs  that   would  be  eliminated  and  the                                                            
resulting  consequences:   Bering  Sea/Aleutian  Islands   Shellfish                                                            
Management Program,  which the State is not statutorily  mandated to                                                            
manage;   the  genetics   laboratory,  commenting   that  the   less                                                            
information available,  "the worse we are at fishing … we under-fish                                                            
or we over-fish"; and all non-game wildlife programs.                                                                           
                                                                                                                                
Senator Olson  asked about the State's  liability in the  event that                                                            
no personnel  were  available  on State-owned  land  to protect  the                                                            
public. He referenced the  witness's comment that funding reductions                                                            
would  result in  elimination  of personnel  stationed  at  wildlife                                                            
viewing areas.                                                                                                                  
                                                                                                                                
Mr.  Rue was  unsure  of  whether  the State  had  legal  liability;                                                            
although  it has  a responsibility,  stressing,  "I would  certainly                                                            
feel some  responsibility  though if  someone were  attacked and  we                                                            
knew … of a dangerous  situation and we didn't try  and control it."                                                            
                                                                                                                                
Senator  Olson  "guaranteed"   that  some  attorneys   would  pursue                                                            
litigation  against the State on this  matter. He surmised  that the                                                            
State would be somewhat liable.                                                                                                 
                                                                                                                                
F&G  #1:  This  amendment  adds  $1,485,700  general  funds  to  the                                                            
Commissioner's   Office  BRU,  Agency-wide   Unallocated   Reduction                                                            
component  created  by  MULTI  #1  on page  15  following  line  13.                                                            
Accompanying explanatory language reads as follows.                                                                             
                                                                                                                                
     With  the state purpose  of "providing  more flexibility",  the                                                            
     Finance  Committee  amended the  action  of the  Fish and  Game                                                            
     subcommittee  by changing  specific program  reductions  to the                                                            
     Bering  Sea/Aleutian  Islands  (BS/AI)  Crab  Program  and  the                                                            
     Genetics Program to  an agency-wide unallocated reduction. With                                                            
     80%  of  the  Department's  general  fund in  the  Division  of                                                            
     Commercial Fisheries,  there is no flexibility achieved by this                                                            
     action. The  Department advised the subcommittee  that with the                                                            
     magnitude  of  the  proposed  reductions,  we could  no  longer                                                            
     continue   to  erode  all  programs   with  across   the  board                                                            
     reductions.  This amendment will  restore funding to  the BS/AI                                                            
     Crab Program and the Genetics Program.                                                                                     
                                                                                                                                
     Bering Sea/Aleutian Islands Crab Program $741,000                                                                          
     This   funding  will  restore   all  general  funds   for  crab                                                            
     management  in the region  and allow  the Department to  retain                                                            
     the program's federal  funds. Without this funding, the loss of                                                            
     research  and observer  personnel  would eliminate  sources  of                                                            
     information required  for in-season and inter-annual management                                                            
     (e.g.,  harvest  quota  management,   quota  setting,  by-catch                                                            
     monitoring,  effort monitoring). Loss of general  fund research                                                            
     and observer  staff would also  violate current contracts  with                                                            
     the  federal   granting  agencies  and  would   not  allow  the                                                            
     Department to conduct  observer programs mandated by the Alaska                                                            
     Board of Fisheries.                                                                                                        
     The  general fund  allocation  for the  BS/AI  Crab Program  of                                                            
     $741,000  supports a staff of  biologists, technicians  and the                                                            
     Crab Fishery  Observer Coordinator  plus a core research  staff                                                            
     and  various seasonal  positions  utilized  to sample  catches,                                                            
     analyze data,  and support deployment, briefing  and debriefing                                                            
     observers.   The  program  is  conducted  primarily   from  the                                                            
     Department's  Dutch Harbor office,  with assistance  from staff                                                            
     in  Kodiak. The program  manages crab  fisheries worth  several                                                            
     hundred  million dollars,  under delegation  from the  National                                                            
     Marine  Fisheries Service (NMFS),  the North Pacific  Fisheries                                                            
     Management  Council (NPFMC) and  under direction of  the Alaska                                                            
     Board  of  Fisheries.  The program  is  integral  to  federally                                                            
     funded  research on  crab stocks (approximately  $2 million  in                                                            
     federal grants  to the State) and to the crab  observer program                                                            
     that  is supported  by  test fish  funds (authorized  at  about                                                            
     $680,000 per year).                                                                                                        
     These  crab fisheries constitute  a significant portion  of the                                                            
     State's production  of seafood. Even though much of the harvest                                                            
     occurs in federal  rather than State waters, Alaska has managed                                                            
     these fisheries  since statehood and has, since  implementation                                                            
     of the Fishery Conservation  and Management Act in 1976, worked                                                            
     in  concert with  federal  authorities to  maintain  management                                                            
     control.  A  core management  program  funded  directly by  the                                                            
     State's   general   fund   has  been   essential   to   prudent                                                            
     administration  of the federal funds as well  as to maintenance                                                            
     of  the State's  position  in the  management  and research  of                                                            
     these tremendously important fisheries.                                                                                    
                                                                                                                                
     Genetics Program $744,700                                                                                                  
     This funding  will restore the subcommittee's  cut of $744,700,                                                            
     all the  general funds in the  Genetics Program. These  general                                                            
     funds  support  a  core  staff  of  a  Fisheries  Scientist,  a                                                            
     Biometrician,   and three  Geneticists   who  conduct  research                                                            
     primarily  using external, non-general  funds (currently  about                                                            
     $815,000).                                                                                                                 
     The  heart  of the  program  is the  genetics  laboratory.  The                                                            
     laboratory   has  state   of  the  art   equipment  valued   at                                                            
     approximately $1.1  million. Elimination of general funds would                                                            
     effectively   eliminate  the  genetics  program   and  severely                                                            
     compromise  our  ability to  attract non-general  fund  funding                                                            
     sources.  The  Division  would  lose  its  ability  to  conduct                                                            
     genetic  stock identification  (GSI)  research and evaluation.                                                             
     Applications,  extensive and  routine in our programs,  support                                                            
     fisheries management, which include:                                                                                       
        · Genetics baseline and stock composition for use in                                                                    
          Pacific Salmon Treaty (PST) fisheries;                                                                                
        · By-catch composition in Gulf of Alaska and Bering Sea                                                                 
          trawl fisheries;                                                                                                      
        · High seas fisheries stock identification;                                                                             
        · Yukon River, Bristol Bay, Cook Inlet, and South Alaska                                                                
          Peninsula fisheries stock composition; and                                                                            
        · Genetic diversity inventories for exploited fish                                                                      
          populations used to address a wide variety of                                                                         
          conservation issues including addressing petitions for                                                                
          listing under the Endangered Species Act.                                                                             
                                                                                                                                
Senator Hoffman moved for adoption.                                                                                             
                                                                                                                                
Senator Ward objected.                                                                                                          
                                                                                                                                
Senator Hoffman  spoke of his 14 years serving on  the Department of                                                            
Fish and  Game budget subcommittee  and asserted,  "It is high  time                                                            
the  State of  Alaska reassesses  its  position on  this  particular                                                            
Department."  He  explained   it provides   thousands  of  jobs  and                                                            
provides  an  economic  stimulus.   He argued   that  although  this                                                            
Department  has  successfully   adjusted  to  operating  with  fewer                                                            
general funds,  it is "punished" with further budget  reductions. He                                                            
also pointed  out  this Department  generates over  $65 million  and                                                            
that reductions jeopardize  this revenue source as the Department is                                                            
less able to manage the  resources to maintain a sustained yield. He                                                            
expressed  that to not  adopt this  amendment is  "plain insane  and                                                            
does not make any business sense."                                                                                              
                                                                                                                                
Senator Olson  remarked that the budget  reductions have  the effect                                                            
of "disemboweling"  programs to the extent that the  State is "ripe"                                                            
for federal  takeover. He  suggested this  represents a "regressive                                                             
mentality" that  would "put us back to the territorial  status" that                                                            
was fought against in the process of achieving statehood.                                                                       
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR:  Senator  Austerman, Senator  Hoffman,  Senator Leman  and                                                            
Senator Olson                                                                                                                   
                                                                                                                                
OPPOSED:  Senator  Green, Senator  Ward,  Senator  Wilken,  Co-Chair                                                            
Kelly and Co-Chair Donley                                                                                                       
                                                                                                                                
The motion FAILED (4-5)                                                                                                         
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
F&G #2: This amendment  adds $223,700 general funds for the Wildlife                                                            
Conservation   BRU,  Wildlife   Conservation   Restoration   Program                                                            
component  on page  16 lines  12 and  13.  Accompanying explanatory                                                             
language reads as follows.                                                                                                      
                                                                                                                                
     This funding will restore the subcommittee's cut of nearly all                                                             
     the  general  fund match  for  Wildlife  Conservation  Non-Game                                                            
     Programs.                                                                                                                  
     The Division  of Wildlife Conservation  receives approximately                                                             
     $260,000  in general funds annually.  This funding satisfies  a                                                            
     3:1  match requirement  for wildlife  conservation restoration                                                             
     funds  (WCRP) and the proposed  cut of $223,700 will  result in                                                            
     the  loss of  $671,100  federal  funds. Specific  non-game  and                                                            
     watchable  wildlife  programs  that  will  be affected  by  the                                                            
     subcommittee's cut include:                                                                                                
        · Goshawk and Endangered Species Research                                                                               
        · Brown Bear Viewing                                                                                                    
        · Mendenhall Wetlands State Refuge                                                                                      
        · Wolverine Creek and Pack Creek Management                                                                             
        · Round Island and Walrus Island Sanctuaries                                                                            
        · Anchorage and Northwest Alaska Raptors                                                                                
                                                                                                                                
Senator Hoffman moved for adoption.                                                                                             
                                                                                                                                
Senator Ward objected.                                                                                                          
                                                                                                                                
AT EASE 9:39 PM / 9:49 PM                                                                                                       
                                                                                                                                
Senator Hoffman  read the explanatory statement into  the record and                                                            
elaborated on the importance of the threatened programs.                                                                        
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Hoffman and Senator Olson                                                                                     
                                                                                                                                
OPPOSED:  Senator  Green,  Senator  Leman,   Senator  Ward,  Senator                                                            
Wilken, Senator Austerman, Co-Chair Kelly and Co-Chair Donley                                                                   
                                                                                                                                
The motion FAILED (2-7)                                                                                                         
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
Department of Health and Social Services (cont.)                                                                              
                                                                                                                                
JANET  CLARKE,  Director,   Division  of  Administrative   Services,                                                            
Department  of Health  and Social  Services,  testified to  concerns                                                            
raised with  the Committee's  adoption of MULTI  #1. She noted  that                                                            
although  it appears  the  Department's  budget was  increased  $270                                                            
million over  FY 02, the  FY 02 supplemental  budget request  is not                                                            
included in the comparison.  She calculated the actual increase from                                                            
FY 02 funding  at $100 million. Although  she qualified this  amount                                                            
is significant, most are  federal funds and non-general funds to the                                                            
Medicaid   program.  She   noted  the  general   fund  increase   is                                                            
approximately  $12  million,  which is  appropriated  primarily  for                                                            
formula increases to Medicaid.                                                                                                  
                                                                                                                                
Ms. Clarke appreciated  that several programs received no reductions                                                            
to the base funding, including foster care and juvenile justice.                                                                
                                                                                                                                
Ms. Clarke  stated that  with the  adoption of  MULTI #1, the  Adult                                                            
Public Assistance and Foster  Care Special Needs programs are funded                                                            
at 30 percent  of the requested amount.  She expressed concern  that                                                            
the language adopted to  the findings and intent section of the bill                                                            
would "trigger the pro-rata  bill; the language in SB 182, which has                                                            
passed the  Senate." She  remarked this would  be an "unreasonable"                                                             
outcome for poor, disabled and elderly clients.                                                                                 
                                                                                                                                
Ms. Clarke continued that  the Subsidized Adoption program is funded                                                            
at 34 percent  of the requested  amount. She  pointed out a  request                                                            
for $2.5  million is  included in  the proposed  FY 03 supplemental                                                             
budget, noting  that although this  amount would be reduced  to $2.1                                                            
million, the current FY 03 funding is inadequate.                                                                               
                                                                                                                                
Ms. Clarke informed the  Committee that the amendments that would be                                                            
offered at this hearing  are primarily to restore funding reductions                                                            
to grant programs and formula  programs. She emphasized that alcohol                                                            
and drug abuse treatment programs require additional funds.                                                                     
                                                                                                                                
H&SS #2: This  amendment adds $593,900 general funds  and $2,806,100                                                            
GF/Mental Health funds  for the Alcohol and Drug Abuse Services BRU,                                                            
Alcohol and Drug  Abuse Treatment Grants component  on page 21 lines                                                            
31  and 32,  adds $528,100  general  funds  for the  Alcohol  Safety                                                            
Action Program  (ASAP) component on  lines 29 and 30, and  also adds                                                            
$289,100  GF/Mental  Health  for  the  Rural  Services  and  Suicide                                                            
Prevention  component  on  page  22  lines  6  and  7. Accompanying                                                             
explanatory language reads as follows.                                                                                          
                                                                                                                                
     This amendment  will restore treatment and prevention  programs                                                            
     and fund  needed administrative support for these  grant-in-aid                                                            
     programs.  Without these funds  Alcohol Safety Action  Programs                                                            
     (ASAP)  in Dillingham,  Ketchikan,  Kodiak,  Mat-Su and  Seward                                                            
     will have to close.                                                                                                        
                                                                                                                                
Senator Hoffman moved for adoption.                                                                                             
                                                                                                                                
Senator Green objected.                                                                                                         
                                                                                                                                
Senator Hoffman  reminded that  he has spoken  on the importance  of                                                            
funding these  programs several times.  He reiterated that  although                                                            
the  Committee  has  demonstrated  it  is "tough  on  crime"  it  is                                                            
necessary to  address the relationship  between crime and  substance                                                            
abuse. He read the explanatory statement into the record.                                                                       
                                                                                                                                
Senator  Olson   added  that  these   programs  offer  preventative                                                             
benefits.                                                                                                                       
                                                                                                                                
                                                                                                                                
SFC 02 # 79, Side A 09:57 PM                                                                                                    
                                                                                                                                
                                                                                                                                
Senator  Olson   commented  on  the   Rural  Services  and   Suicide                                                            
Prevention  component, suggesting  the members  disregard the  Rural                                                            
Services reference, as  suicides occur in all areas of the State. He                                                            
remarked that suicide could be prevented.                                                                                       
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Olson and Senator Hoffman                                                                                     
                                                                                                                                
OPPOSED:  Senator  Leman,  Senator  Ward,  Senator  Wilken,  Senator                                                            
Austerman, Senator Green, Co-Chair Kelly and Co-Chair Donley                                                                    
                                                                                                                                
The motion FAILED (2-7)                                                                                                         
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
H&SS  #3:  This  amendment  adds  $671,200  general  funds  for  the                                                            
Purchased  Services BRU,  Family Preservation  component on  page 19                                                            
line 28. Accompanying explanatory language reads as follows.                                                                    
                                                                                                                                
     These funds  will be used for grants designed  to help children                                                            
     and families  at risk or in crisis. Services  include intensive                                                            
     pre-placement   services,  follow-up  care  for  families,  and                                                            
     services to increase parenting abilities.                                                                                  
                                                                                                                                
Senator Hoffman moved for adoption.                                                                                             
                                                                                                                                
Senator Green objected.                                                                                                         
                                                                                                                                
Senator Hoffman read the explanatory statement into the record.                                                                 
                                                                                                                                
Senator  Olson  noted that  the  Committee  members were  raised  in                                                            
conservative  and traditional  families  and had  involved  parents.                                                            
However, he  stated that "families  are more under attack  then they                                                            
were  before."  He  suggested  that before  "we  reach  crisis"  and                                                            
experience  the further disintegration  of families, actions  should                                                            
be taken to assist those families currently at risk.                                                                            
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Olson and Senator Hoffman                                                                                     
                                                                                                                                
OPPOSED: Senator  Ward, Senator Wilken,  Senator Austerman,  Senator                                                            
Green, Senator Leman, Co-Chair Kelly and Co-Chair Donley                                                                        
                                                                                                                                
The motion FAILED (2-7)                                                                                                         
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
H&SS  #4: This  amendment  adds $2  million  general  funds for  the                                                            
Catastrophic  and Chronic Illness  Assistance BRU, Catastrophic  and                                                            
Chronic Illness  Assistance  (AS 47.08) component  on page  18 lines                                                            
31-33. Accompanying explanatory language reads as follows.                                                                      
                                                                                                                                
     This  amendment restores  the 50%  cut to  this program.  Funds                                                            
     will be  used to provide a limited  package of health  services                                                            
     to  Alaskans with  terminal  diseases  or one  of four  chronic                                                            
     illnesses:  diabetes, seizure disorder, chronic  mental illness                                                            
     or  hypertension. Each  CAMA recipient  qualifies only  if they                                                            
     have  income of less  than $300  per month  and assets  of less                                                            
     than $500  except for their home and vehicle  and have no other                                                            
     insurance.                                                                                                                 
                                                                                                                                
Senator Hoffman moved for adoption.                                                                                             
                                                                                                                                
Senator Green objected.                                                                                                         
                                                                                                                                
Senator Hoffman read the explanatory statement into the record.                                                                 
                                                                                                                                
Senator Olson spoke of  the emotional drain of terminal diseases and                                                            
chronic illness.                                                                                                                
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Hoffman and Senator Olson                                                                                     
                                                                                                                                
OPPOSED: Senator  Ward, Senator Wilken,  Senator Austerman,  Senator                                                            
Green, Senator Leman, Co-Chair Kelly and Co-Chair Donley                                                                        
                                                                                                                                
The motion FAILED (2-7)                                                                                                         
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
H&SS  #5:  This  amendment  adds  $103,800  general  funds,  $16,800                                                            
GF/Match  funds  and  $1,200  GF/Program   Receipts  to  the  Public                                                            
Assistance Administration  BRU and component on page  19 lines 5 and                                                            
6; adds  $63,500 general  funds and $709,200  GF/Match funds  to the                                                            
Public Assistance  Field Services  component on lines 8 and  9; adds                                                            
$9,400  general funds  and  $131,100 GF/Match  funds  to the  Public                                                            
Assistance  Data Processing component  on lines 10 and 11;  and also                                                            
adds $14,400  GF/Match funds  for the Quality  Control component  on                                                            
line 7. Accompanying explanatory language reads as follows.                                                                     
                                                                                                                                
     This  amendment will  fund caseworkers  and data processing  at                                                            
     maintenance  levels and  will restore  support for Alaska  Food                                                            
     Coalition.  Without this funding  17 caseworkers in  Anchorage,                                                            
     Juneau, Fairbanks, Mat-Su, Kenai and Bethel will be cut.                                                                   
                                                                                                                                
Senator Hoffman moved for adoption.                                                                                             
                                                                                                                                
Senator Green objected.                                                                                                         
                                                                                                                                
Senator Hoffman read the explanatory statement into the record.                                                                 
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Hoffman and Senator Olson                                                                                     
                                                                                                                                
OPPOSED: Senator  Wilken, Senator Austerman, Senator  Green, Senator                                                            
Leman, Senator Ward, Co-Chair Kelly and Co-Chair Donley                                                                         
                                                                                                                                
The motion FAILED (2-7)                                                                                                         
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
H&SS #6: This  amendment adds $204,300  general funds for  the State                                                            
Health Services  BRU, Emergency Medical Services Grant  component on                                                            
page 21 lines 17 and 18.  Accompanying explanatory language reads as                                                            
follows.                                                                                                                        
                                                                                                                                
     This   funding   will  be   used   to  support   the   critical                                                            
     infrastructure needed  to maintain local EMS [Emergency Medical                                                            
     Services]   statewide.  If  these   funds  are  not   restored,                                                            
     preventable   deaths  and  disability  due  to  inadequate  EMS                                                            
     response capacity are likely to occur.                                                                                     
                                                                                                                                
Senator Hoffman moved for adoption.                                                                                             
                                                                                                                                
Senator Green objected.                                                                                                         
                                                                                                                                
Senator Hoffman  read the explanatory statement into  the record. He                                                            
remarked, "This amendment will save lives."                                                                                     
                                                                                                                                
Senator Green stated this matter was addressed in H&SS #1.                                                                      
                                                                                                                                
Senator Hoffman  WITHDREW his motion to adopt the  amendment without                                                            
objection.                                                                                                                      
                                                                                                                                
H&SS #7:  This amendment  adds $150,000 general  funds and  $850,000                                                            
GF/Mental  Health funds for  the State Health  Services BRU,  Infant                                                            
Learning  Program  Grants component  on  page 21  lines  20 and  21.                                                            
Accompanying explanatory language reads as follows.                                                                             
                                                                                                                                
     Since  it  is unclear  whether  the  plan  to make  the  Infant                                                            
     Learning Program a  needs based program will work, this request                                                            
     will restore  funds for this  vital program. This funding  will                                                            
     provide services to  high-risk children, ages 0-3, to reduce or                                                            
     ameliorate  disabling  conditions.  During FY  01, the  average                                                            
     cost for  a child in this program  was approximately  $3800 per                                                            
     year. These funds would serve approximately 260 children.                                                                  
                                                                                                                                
Senator Hoffman moved for adoption.                                                                                             
                                                                                                                                
Senator Green objected.                                                                                                         
                                                                                                                                
Senator  Hoffman detailed  the amendment  and  read the explanatory                                                             
statement into the record.                                                                                                      
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Hoffman and Senator Olson                                                                                     
                                                                                                                                
OPPOSED:  Senator  Green,  Senator  Leman,   Senator  Ward,  Senator                                                            
Wilken, Senator Austerman, Co-Chair Kelly and Co-Chair Donley                                                                   
                                                                                                                                
The motion FAILED (2-7)                                                                                                         
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
H&SS #8: This amendment  adds $91,400 GF/Mental Health funds for the                                                            
Community Mental Health  Grants BRU, General Community Mental Health                                                            
Grants component on page  22 lines 9 and 10; adds $195,800 GF/Mental                                                            
Health funds  for the  Psychiatric Emergency  Services component  on                                                            
lines 11 and 12;  adds $369,700 for the Services to  the Chronically                                                            
Mental  Ill component  on lines 13  and 14;  adds $34,400  GF/Mental                                                            
Health funds for  the Designated Evaluation and Treatment  component                                                            
on lines 15  and 16; and also adds  $186,600 GF/Mental Health  funds                                                            
for  the Services  for  the Seriously  Emotionally  Disturbed  Youth                                                            
component  on lines  17 and  18. Accompanying  explanatory  language                                                            
reads as follows.                                                                                                               
                                                                                                                                
     This   funding   will  restore   mental  health   services   to                                                            
     emotionally  disturbed adults  and youth throughout  the State.                                                            
                                                                                                                                
Senator Hoffman moved for adoption.                                                                                             
                                                                                                                                
Senator Green objected.                                                                                                         
                                                                                                                                
Senator  Hoffman detailed  the amendment  and  read the explanatory                                                             
statement into the record.                                                                                                      
                                                                                                                                
Senator Olson  relayed that  it is difficult  to recruit and  retain                                                            
qualified  personnel  to  provide  care  for "mentally  challenged"                                                             
patients.                                                                                                                       
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Hoffman and Senator Olson                                                                                     
                                                                                                                                
OPPOSED:  Senator  Leman,  Senator  Ward,  Senator  Wilken,  Senator                                                            
Austerman, Senator Green, Co-Chair Kelly and Co-Chair Donley                                                                    
                                                                                                                                
The motion FAILED (2-7)                                                                                                         
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
H&SS #9: This amendment  adds $1,062,500 Tobacco Education/Cessation                                                            
Funds  for the State  Health Services  BRU,  Tobacco Prevention  and                                                            
Control component  on page 21 lines  23 and 24. This amendment  also                                                            
changes   the   funding   source   of   $1,062,500    from   Tobacco                                                            
Education/Cessation   Funds  to  GF/Match   funds  in  the   Medical                                                            
Assistance  BRU, Medicaid  Services  component on  page 18 line  28.                                                            
Accompanying explanatory language reads as follows.                                                                             
                                                                                                                                
     This amendment  partially reverses  the transfer from  Medicaid                                                            
     Services  to  Tobacco  Prevention  and Control  and  offsets  a                                                            
     portion of  the cut to Medicaid Services contained  in MULTI #1                                                            
     adopted by the Senate Finance Committee on 4/24/2002.                                                                      
                                                                                                                                
Senator Hoffman moved for  adoption, detailed the amendment and read                                                            
the explanatory statement into the record.                                                                                      
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Olson and Senator Hoffman                                                                                     
                                                                                                                                
OPPOSED:  Senator  Leman,  Senator  Ward,  Senator  Wilken,  Senator                                                            
Austerman, Senator Green, Co-Chair Kelly and Co-Chair Donley                                                                    
                                                                                                                                
The motion FAILED (2-7)                                                                                                         
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
H&SS #10: This  amendment adds $205,500  general funds and  $233,000                                                            
I/A Receipts  for the Human  Services Community  Matching Grant  BRU                                                            
and component  on page 20 lines 31 and 32. Accompanying  explanatory                                                            
language reads as follows.                                                                                                      
                                                                                                                                
     These funds would  restore the 25% cut to grants for health and                                                            
     services  to Fairbanks North Star Borough and  the Municipality                                                            
     of  Anchorage.  These funds  are used  to provide  services  to                                                            
     children  and  youth as  well as  address  family dysfunction,                                                             
     mental and  emotional problems, temporary shelter  for homeless                                                            
     persons, delivery of meals to those in need, etc.                                                                          
                                                                                                                                
Senator Hoffman moved for adoption.                                                                                             
                                                                                                                                
Senator Green objected.                                                                                                         
                                                                                                                                
Senator  Hoffman detailed  the amendment  and  read the explanatory                                                             
statement into the record.                                                                                                      
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Olson and Senator Hoffman                                                                                     
                                                                                                                                
OPPOSED: Senator  Ward, Senator Wilken,  Senator Austerman,  Senator                                                            
Green, Senator Leman, Co-Chair Kelly and Co-Chair Donley                                                                        
                                                                                                                                
The motion FAILED (2-7)                                                                                                         
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
H&SS #11:  This amendment  adds $3,167,500  GF/Match to the  Medical                                                            
Assistance  BRU, Medicaid  Services  component on  page 18 line  28;                                                            
adds $1,250,000  general funds for the Public Assistance  BRU, Adult                                                            
Public  Assistance component  on line  18; adds  $1,500,000  general                                                            
funds  for the  Purchased  Services  BRU, Subsidized  Adoptions  and                                                            
Guardianship component  on page 20 lines 3 and 4;  and adds $250,000                                                            
general funds  for the Purchased Services  BRU, Foster Care  Special                                                            
Need  component  on  page  19  line  31.  Accompanying  explanatory                                                             
language reads as follows.                                                                                                      
                                                                                                                                
     This amendment  will restore  the cuts to Department  of Health                                                            
     and Social  Services formula programs made in  MULTI #1 adopted                                                            
     by the Senate  Finance Committee on 4/24/2002.  Formula program                                                            
     increments  with the  reductions  are funded  at the  following                                                            
     levels:                                                                                                                    
        · Medicaid: The increment is funded at $23.1 million a                                                                  
          reduction of 38% from fully funding the program.                                                                      
        · Adult Public Assistance: The increment is funded at                                                                   
          $781,600 a reduction of 70% from fully fund the program                                                               
          [sic].                                                                                                                
        · Subsidized Adoption and Guardianship: The increment is                                                                
          funded at $1.0 million a reduction of 66% from fully                                                                  
          funding the request.                                                                                                  
        · Foster Care Special Needs: The increment is funded at                                                                 
          $150,000 a reduction of 70% from fully funding the                                                                    
          request.                                                                                                              
                                                                                                                                
Senator Hoffman moved for adoption.                                                                                             
                                                                                                                                
Senator Green objected.                                                                                                         
                                                                                                                                
Senator Hoffman detailed the amendment and read the explanatory                                                                 
statement into the record.                                                                                                      
                                                                                                                                
Senator Hoffman shared that his daughter provides adoption services                                                             
in Bethel and she questioned why the Legislature is not adequately                                                              
funding these programs.                                                                                                         
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Hoffman and Senator Olson                                                                                     
                                                                                                                                
OPPOSED: Senator Ward, Senator Wilken, Senator Austerman, Senator                                                               
Green, Senator Leman, Co-Chair Kelly and Co-Chair Donley                                                                        
                                                                                                                                
The motion FAILED (2-7)                                                                                                         
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
H&SS #12: This amendment adds intent language to the Medical                                                                    
Assistance BRU, Medicaid Services component on page 18 line 28 to                                                               
read as follows.                                                                                                                
                                                                                                                                
     It  is   the  intent  of  the   legislature  that  the   amount                                                            
     appropriated  in this  appropriation  is the  full amount  that                                                            
     will  be appropriated  for Medical  Assistance  for the  fiscal                                                            
     year ending  June 30, 2003. If the amount appropriated  in this                                                            
     appropriation  is not sufficient to cover the  costs of Medical                                                            
     Assistance  for  all eligible  persons,  the  department  shall                                                            
     eliminate  coverage for optional  medical services that  have a                                                            
     federal match and  optionally eligible groups of individuals in                                                            
     accordance  with  the AS  47.07.035. It  is the  intent of  the                                                            
     legislature  that requests for supplemental appropriations  for                                                            
     Medical  Assistance for  the fiscal year  ending June  30, 2003                                                            
     will  not  be   approved.  This  intent  covers   the  budgeted                                                            
     reductions  to Medicaid,  but does not  apply to loss  of funds                                                            
     that  may  occur  if  the  department's  "Fair  Share"  funding                                                            
     mechanism is not approved by the federal government.                                                                       
                                                                                                                                
Accompanying explanatory language reads as follows.                                                                             
     The  House intent adopted  by the Senate  Finance Committee  at                                                            
     their  April 24,2002 for Medicaid  is inconsistent with  stated                                                            
     comments  that funding  is based on  lower case projection  and                                                            
     possible  changes  to  the FMAP  [Federal  Medicaid  Assistance                                                            
     Program].  The House intent would direct the  Department to cut                                                            
     optional  services,  which  is  inconsistent  with  the  Senate                                                            
     budget.                                                                                                                    
                                                                                                                                
This amendment was NOT OFFERED.                                                                                                 
                                                                                                                                
Department of Labor and Workforce Development (cont.)                                                                         
                                                                                                                                
L&WD #2: This  amendment changes the funding source  of $89,600 from                                                            
GF/Program  Receipts to  Receipt Supported  Services  funds for  the                                                            
Labor  Standards  and Safety  BRU, Occupational  Safety  and  Health                                                            
component,  and adds  $89,600  general funds  to the  Wage and  Hour                                                            
Administration   component  on   page  24   lines  8,  10   and  11.                                                            
Accompanying explanatory language reads as follows.                                                                             
                                                                                                                                
     By  switching the  General Fund  Program  Receipts to  Receipts                                                            
     Supported  Services, for fees  generated by licensing  Asbestos                                                            
     Abatement  and Explosive  Handlers,  and fees  from  associated                                                            
     training  certificates,  general  funds  will  be freed  up  to                                                            
     provide  substantial funding  toward the two new Wage  and Hour                                                            
     technicians  needed for payroll auditing. These  two technician                                                            
     positions,  one in Anchorage and one in Fairbanks,  will result                                                            
     in a lesser amount  of protection for Alaska's workers, and put                                                            
      law-abiding contractors at a competitive disadvantage.                                                                    
     Wage and hour technicians  monitor and audit certified payrolls                                                            
     that   are  required  to  be   submitted  on  publicly   funded                                                            
     construction  projects.  These  audits  ensure  that  employers                                                            
     abide  by  prevailing  wage  standards  and  provide  a  "level                                                            
     playing field"; keeping  the unscrupulous employer from getting                                                            
     unfair  competitive advantage  by paying employees less  than a                                                            
     prevailing rate of  pay. The audits also benefit contractors by                                                            
     catching payroll errors.                                                                                                   
     Without  the technician positions,  audits will continue  to be                                                            
     complain  driven only. Time spent  performing audits  will mean                                                            
     that  the  investigators  spend  less  time  out in  the  field                                                            
     ensuring  that contractors comply with current  wage laws. As a                                                            
     result,  fewer prevailing  wage  violations will  be found  and                                                            
     prosecuted,  fewer workers will  have unpaid wages returned  to                                                            
     them  and the  amount of  time it takes  to close  a case  will                                                            
     increase.                                                                                                                  
     Each  technician  generated  $30,000  to  $60,000 per  year  in                                                            
     violations from routine  audits. This means that potentially up                                                            
     to $200,000  per year in wages lost through payroll  errors are                                                            
     not being returned to Alaskan workers.                                                                                     
                                                                                                                                
Senator Olson moved for adoption.                                                                                               
                                                                                                                                
Senator Green objected.                                                                                                         
                                                                                                                                
Senator Olson  spoke to this  amendment stating  that it relates  to                                                            
boiler and mechanical inspections.                                                                                              
                                                                                                                                
AT EASE 10:16 PM / 10:20 PM                                                                                                     
                                                                                                                                
[Note: The following portion of the meeting was not recorded.]                                                                  
                                                                                                                                
Senator Olson  WITHDREW his  motion to adopt  the amendment  without                                                            
objection.                                                                                                                      
                                                                                                                                
Department of Law                                                                                                             
                                                                                                                                
BARBARA   RITCHIE,   Deputy  Attorney   General,   Civil   Division,                                                            
Department of Law, testified to the proposed amendments.                                                                        
                                                                                                                                
LAW #1: This amendment  adds $250,000 general funds for the Criminal                                                            
Division BRU,  Unallocated Reduction  component on page 25  line 14.                                                            
Accompanying explanatory language reads as follows.                                                                             
                                                                                                                                
     This  amendment restores  funds to the  Criminal Division  that                                                            
     were  removed via  an unallocated  reduction  which would  have                                                            
     resulted  in  the  elimination   of  at  least  three  attorney                                                            
      positions from the Anchorage and/or Fairbanks offices.                                                                    
                                                                                                                                
AND                                                                                                                             
                                                                                                                                
LAW #2:  This amendment adds  $250,000 general  funds for the  Civil                                                            
Division  BRU, Unallocated  Reduction component  on page 26  line 5.                                                            
Accompanying explanatory language reads as follows.                                                                             
                                                                                                                                
     Restore  funds to the Civil Division  that were removed  via an                                                            
     unallocated  reduction and would  have resulted in the  loss of                                                            
     two  attorney and/or  paraprofessional  positions; most  likely                                                            
     those  working on natural resources  and fish and game  issues.                                                            
                                                                                                                                
Senator Olson moved for adoption of LAW #1 and LAW #2.                                                                          
                                                                                                                                
Senator Ward objected.                                                                                                          
                                                                                                                                
Senator Olson read the explanatory statements into the record.                                                                  
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Hoffman and Senator Olson                                                                                     
                                                                                                                                
OPPOSED: Senator  Ward, Senator Wilken,  Senator Austerman,  Senator                                                            
Green, Co-Chair Kelly and Co-Chair Donley                                                                                       
                                                                                                                                
ABSENT: Senator Leman                                                                                                           
                                                                                                                                
The motion FAILED (2-6-1)                                                                                                       
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
LAW  #3: This  amendment  adds  $135,000  general fund  for  various                                                            
components of the Criminal  Division BRU, adds $66,800 general funds                                                            
for  various components  of  the  Civil Division  BRU,  adds  $2,300                                                            
general funds for the Statehood  Defense BRU and component, and adds                                                            
$10,300 for the  Oil and Gas Litigation and Legal  Services BRU, Oil                                                            
&  Gas  Litigation  component  on  pages  25  and  26. Accompanying                                                             
explanatory language reads as follows.                                                                                          
                                                                                                                                
     Fully fund the Law Office Assistant reclassification that was                                                              
     implemented in response to a union grievance filed on behalf                                                               
     of these positions.                                                                                                        
                                                                                                                                
Senator Olson moved for adoption.                                                                                               
                                                                                                                                
Senator Ward objected.                                                                                                          
                                                                                                                                
Senator Olson spoke to the motion.                                                                                              
                                                                                                                                
[It was established  that Senator  Olson was directing his  comments                                                            
to LAW #5  and the motion  was amended to  adopt LAW #5. No  further                                                            
action was taken on LAW #3.]                                                                                                    
                                                                                                                                
LAW #5: This amendment  adds $33,000 general funds  for the Criminal                                                            
Division  BRU,  Third  Judicial  District  component,  adds  $70,900                                                            
general funds  for the Fourth Judicial District component,  and adds                                                            
$148,300 general  funds for the Civil  Division BRU, Human  Services                                                            
Section  component  on page  25,  lines 6-10  and  29. Accompanying                                                             
explanatory language reads as follows.                                                                                          
                                                                                                                                
     This amendment fully funds the fiscal note for therapeutic                                                                 
     court legislation  (Ch. 64, SLA 01), which will ensure adequate                                                            
     prosecutorial involvement in the program.                                                                                  
                                                                                                                                
Senator Olson moved for adoption, having read the explanatory                                                                   
statement into the record.                                                                                                      
                                                                                                                                
A roll call was taken on the motion to adopt LAW #5.                                                                            
                                                                                                                                
IN FAVOR: Senator Hoffman and Senator Olson                                                                                     
                                                                                                                                
OPPOSED: Senator Wilken, Senator Austerman, Senator Green, Senator                                                              
Leman, Senator Ward, Co-Chair Kelly and Co-Chair Donley                                                                         
                                                                                                                                
The motion FAILED (2-7)                                                                                                         
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
LAW #4:  This amendment adds $106,500 general funds for the Civil                                                               
Division BRU, Collections and Support component on page 25 line 21.                                                             
Accompanying explanatory language reads as follows.                                                                             
                                                                                                                                
     This  increment   fully  funds  the  fiscal  note   for  victim                                                            
     restitution  legislation  (Ch. 60,  SLA 01).  As many as  5,000                                                            
     victim  restitution  court  orders  may be  sent  to the  Civil                                                            
     Division  for collection  as a  result of passage  of this  new                                                            
     legislation.  This legislation  became effective on  January 1,                                                            
     2002,  and the  workload  related to  the task  of collecting,                                                             
     accounting  for, and paying out  restitution is just  beginning                                                            
     to be  felt. Because the full  amount of the requested  funding                                                            
     for this process was  denied, the victim restitution effort may                                                            
     fall  far  short of  its  goal of  successfully  tracking  down                                                            
     convicted  criminals  and delinquents  and  making payments  to                                                            
     victims who are due restitution.                                                                                           
                                                                                                                                
Senator Olson moved for adoption.                                                                                               
                                                                                                                                
Senator Ward objected.                                                                                                          
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Hoffman and Senator Olson                                                                                     
                                                                                                                                
OPPOSED: Senator Ward, Senator Wilken, Senator Austerman, Senator                                                               
Green, Senator Leman, Co-Chair Kelly and Co-Chair Donley                                                                        
                                                                                                                                
The motion FAILED (2-7)                                                                                                         
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
LAW #6: This amendment  adds $168,400 general funds for the Criminal                                                            
Division BRU, Third Judicial  District component on page 25 lines 6-                                                            
9. Accompanying explanatory language reads as follows.                                                                          
                                                                                                                                
     This  amendment  fully  funds the  fiscal  note for  new  drunk                                                            
     driving  legislation (Ch. 63,  SLA 2001). Passage last  year of                                                            
     stiffer alcohol  laws requires new prosecutors  in Anchorage to                                                            
     handle the increased  drunk driving prosecutions as a result of                                                            
     the .08 percent BAC  [Blood Alcohol Content] and the changes to                                                            
     the  "look-back"   periods  for   repeat  DWI  [Driving   While                                                            
     Intoxicated]  and felony  DWI offenses.  Failure to  adequately                                                            
     fund  new staff  required by  the passage  of this legislation                                                             
     will mean  the level of prosecution will not  meet the public's                                                            
     expectation.                                                                                                               
                                                                                                                                
Senator Olson moved for adoption.                                                                                               
                                                                                                                                
Senator Ward objected.                                                                                                          
                                                                                                                                
Senator Olson read the explanatory statement into the record.                                                                   
                                                                                                                                
Senator  Hoffman  commented   on the  importance   of  funding  this                                                            
increment.                                                                                                                      
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Hoffman and Senator Olson                                                                                     
                                                                                                                                
OPPOSED: Senator  Austerman, Senator  Green, Senator Leman,  Senator                                                            
Ward, Senator Wilken, Co-Chair Kelly and Co-Chair Donley                                                                        
                                                                                                                                
The motion FAILED (2-7)                                                                                                         
                                                                                                                                
AT EASE 10:33 PM / 10:38 PM                                                                                                     
                                                                                                                                
[Note: The remainder of the meeting is recorded.]                                                                               
                                                                                                                                
Department of Military and Veterans Affairs                                                                                   
                                                                                                                                
NICO BUS, Administrative  Services Manager, Administrative  Services                                                            
Division, Department of  Military and Veterans Affairs, and Division                                                            
of Support  Services,  Department  of Natural  Resources,  testified                                                            
that the  budget needs of  the Department  of Military and  Veterans                                                            
Affairs has  increased since  FY 02 to almost  $9 million.  He noted                                                            
this  is  primarily  due  to approximately   $400,000  in  increased                                                            
expenses to  the military retirement  program. He described  how the                                                            
historical  annual expense  of this program  has been approximately                                                             
$1.5 million,  until recent years,  when high earnings in  the stock                                                            
market reduced  expenditures  to $800,000.  Poor performance  of the                                                            
stock market in  the current year has caused the actuarial  costs to                                                            
return to  usual levels,  he explained. He  listed salary  increases                                                            
for the employees of the  Department as another factor necessitating                                                            
additional funds.                                                                                                               
                                                                                                                                
Mr.  Bus stated  the  Alaska  Military  Youth  Academy is  the  only                                                            
program where  these cost increases  could be absorbed. However,  he                                                            
stressed  that  such  a reduction  would  "clearly  put  that  whole                                                            
program  in jeopardy."  He  spoke  to the  many years  of  continued                                                            
improvement to  the program and the efforts to curtail  the cost per                                                            
graduate, while increasing the number of graduates.                                                                             
                                                                                                                                
AT EASE 10:40 PM / 10:41 PM                                                                                                     
                                                                                                                                
M&VA #1: This  amendment adds $240,000 general funds  for the Alaska                                                            
National Guard BRU, Alaska  Military Youth Academy component on page                                                            
27  lines 9  and  10. Accompanying  explanatory  language  reads  as                                                            
follows.                                                                                                                        
                                                                                                                                
     The payment  of graduate stipends is essential  to Phase III of                                                            
     the  program, the twelve  months after  graduation. Every  year                                                            
     since its inception  the Alaska Military Youth Academy has paid                                                            
     a graduate  stipend. Accommodating  the stipends from  existing                                                            
     resources  will result in the lay-off of most  divisional staff                                                            
     between classes.                                                                                                           
     The federal  grant allows a stipend payment of  $2,200 based on                                                            
     specified  conditions.  This  amendment  would fund  a  reduced                                                            
     stipend of $1,500 per graduate.                                                                                            
                                                                                                                                
Senator Hoffman moved for adoption.                                                                                             
                                                                                                                                
Senator Wilken objected.                                                                                                        
                                                                                                                                
Senator Hoffman read the explanatory statement into the record.                                                                 
                                                                                                                                
Senator  Olson added that  this program  was established  especially                                                            
for Alaska's youth.                                                                                                             
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Hoffman and Senator Olson                                                                                     
                                                                                                                                
OPPOSED:  Senator  Green,  Senator  Leman,   Senator  Ward,  Senator                                                            
Wilken, Senator Austerman, Co-Chair Kelly and Co-Chair Donley                                                                   
                                                                                                                                
The motion FAILED (2-7)                                                                                                         
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
M&VA #2: This amendment  changes the funding source of $654,700 from                                                            
I/A Receipts  to general  funds in  the Alaska  National Guard  BRU,                                                            
Alaska Military  Youth Academy component on page 27  lines 9 and 10.                                                            
Accompanying explanatory language reads as follows.                                                                             
                                                                                                                                
     The  Senate Finance  Subcommittee approved  a fund change  from                                                            
     general  funds to inter-agency  receipts that are dependent  on                                                            
     the  passage of  HB 312.  HB 312  proposes to  fund the  Alaska                                                            
     Military  Youth Academy based  on a per-student count  formula.                                                            
     The  House passed  this legislation  and the  bill is  awaiting                                                            
     Senate action.                                                                                                             
     Without  the certainty of the  passage of HB 312 for  FY 03, if                                                            
     this funding is not  restored, it may result in the loss of the                                                            
     full  base Challenge  grant  from  the federal  government  and                                                            
     result in a total closure of the program.                                                                                  
                                                                                                                                
Senator Hoffman moved for adoption.                                                                                             
                                                                                                                                
Senator Ward and Senator Austerman objected.                                                                                    
                                                                                                                                
Senator Hoffman read the explanatory statement into the record.                                                                 
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Hoffman and Senator Olson                                                                                     
                                                                                                                                
OPPOSED:  Senator  Leman,  Senator  Ward,  Senator  Wilken,  Senator                                                            
Austerman, Senator Green, Co-Chair Kelly and Co-Chair Donley                                                                    
                                                                                                                                
The motion FAILED (2-7)                                                                                                         
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
Department of Natural Resources                                                                                               
                                                                                                                                
There were  no amendments for the  Department of Natural  Resources.                                                            
                                                                                                                                
Department of Public Safety                                                                                                   
                                                                                                                                
GLEN GODFREY,  Commissioner, Department of Public  Safety, testified                                                            
in appreciation  of the additional funding provided  in MULTI #1, as                                                            
it would fund the Department  at the FY 02 "service level". However,                                                            
he  stated that  to  maintain  the same  service  levels  in FY  03,                                                            
without  reducing staff  positions,  an additional  $1.2 million  is                                                            
requested.                                                                                                                      
                                                                                                                                
Mr.  Godfrey  informed  that  the  current  appropriation  does  not                                                            
include  increments for  additional  child abuse  investigators,  or                                                            
"other  initiatives   to  address  identified  program   needs."  He                                                            
expressed   that  the  $707,000   reduction   to  the  Division   of                                                            
Administrative   Services,   would  "cripple   centralized   admin's                                                            
functions   in  our  Department"   and  would  either  require   the                                                            
reassignment  of "field positions"  to perform administrative  tasks                                                            
or  "charging"  the  programs  directly  for administration   costs;                                                            
thereby  further   reducing  public  safety  services   and  Trooper                                                            
positions.                                                                                                                      
                                                                                                                                
Mr. Godfrey  stated  that the $150,000  in unfunded  increased  fuel                                                            
costs  of  the  Division  of  Fish  and Wildlife   Protection  could                                                            
significantly  impact the ability  of the Troopers to perform  field                                                            
activities.  He warned that  vessels would  be taken out of  service                                                            
and staff levels would be reduced.                                                                                              
                                                                                                                                
Mr. Godfrey next  addressed the funding reductions  to the Office of                                                            
the Commissioner,  stressing  it would impact  non-Trooper  services                                                            
statewide.  He explained  that  the Department  would  be forced  to                                                            
reduce "other life safety  services" including inspections of public                                                            
buildings,   such   as   schools,   and   to   perform    "oversight                                                            
capabilities".  He furthered that two positions or  the reassignment                                                            
of "line-division"  staff to the commissioner's  office,  would also                                                            
be necessary.                                                                                                                   
                                                                                                                                
Senator Hoffman  clarified that Trooper positions  would potentially                                                            
be eliminated for lack  of funding, despite a budget higher than the                                                            
FY 02 level.                                                                                                                    
                                                                                                                                
Mr. Godfrey  agreed  that the budget  as proposed  would  "certainly                                                            
have a negative impact  on certain positions within the Department."                                                            
He elaborated that it would  be necessary to review some Trooper and                                                            
civilian positions.                                                                                                             
                                                                                                                                
DPS  #1:  This  amendment  adds  $707,200   general  funds  for  the                                                            
Statewide Support BRU,  Administrative Services component on page 31                                                            
line 27. Accompanying explanatory language reads as follows.                                                                    
                                                                                                                                
     Restore Centralized  Administrative function so field staff can                                                            
     concentrate on field duties.                                                                                               
     The Senate  Finance Subcommittee proposal to  reduce funding to                                                            
     the  Division of  Administrative  Services will  have a  direct                                                            
     impact on public safety  by taking troopers out of the field to                                                            
     perform administrative  functions and would cripple  management                                                            
     and  financial  support to  all divisions  and  programs. At  a                                                            
     minimum,  workload for 11 of the 28 authorized  positions would                                                            
     need to be charged our or shifted to line divisions.                                                                       
     Either method  would have the effect of seriously  reducing the                                                            
     commissioned   divisions'  presence  in  the  field  since  the                                                            
     majority   of  the  Department's   administrative  support   is                                                            
     dedicated   for  trooper  and  fish  and  wildlife   protection                                                            
     services  and funds  or support  would need  to be diverted  to                                                            
     accomplish necessary administrative work.                                                                                  
                                                                                                                                
Senator Olson moved for adoption.                                                                                               
                                                                                                                                
Senator Ward objected.                                                                                                          
                                                                                                                                
Senator Olson read the explanatory statement into the record.                                                                   
                                                                                                                                
Senator  Hoffman reiterated  the  Commissioner's  comments that  the                                                            
Department  would  be  unable  to maintain  the  current  number  of                                                            
positions without the additional  funding proposed in the amendments                                                            
before  the  Committee.  He pointed  out  that  public safety  is  a                                                            
priority of both political parties.                                                                                             
                                                                                                                                
Co-Chair   Donley   asked   the  difference   between   the   amount                                                            
appropriated by  the House of Representatives budget  and the amount                                                            
included in the committee substitute.                                                                                           
                                                                                                                                
Senator  Austerman  responded  that  the  Senate  Finance  Committee                                                            
amount is $4 million higher.                                                                                                    
                                                                                                                                
Senator Hoffman reiterated  that the House of Representatives budget                                                            
was inadequate  and should not be  used for comparison. He  stressed                                                            
the intent  is  to maintain  the same  level of  protection for  the                                                            
citizens of Alaska.                                                                                                             
                                                                                                                                
Co-Chair  Donley  stated  he  did  not  "completely  disagree"  with                                                            
Senator Hoffman.  However, he emphasized  the difficulty  in funding                                                            
all programs  given the  State's budget deficit.  He expressed  that                                                            
the Committee,  "can only do so much"  and that members are  "trying                                                            
really hard to meet these concerns."                                                                                            
                                                                                                                                
Senator  Hoffman  suggested  the Committee  must  take  a  "stronger                                                            
position  if  we want  to be  successful  at  making sure  that  the                                                            
citizens  of Alaska are protected  at least  at the same level  that                                                            
they were last year."                                                                                                           
                                                                                                                                
Co-Chair Donley  remarked that the  "commitment" the Committee  made                                                            
to the  Department, "while  it won't be easy  for them", provides  a                                                            
significant  increase  over the  amount allocated  in  FY 02 and  is                                                            
intended to  fund the contractual  obligations for salary  increases                                                            
as well  as maintain  field staff.  He admitted,  "They're  probably                                                            
going  to have  some tough  choices  there in  prioritization,"  for                                                            
which he expressed empathy.                                                                                                     
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Olson and Senator Hoffman                                                                                     
                                                                                                                                
OPPOSED: Senator  Ward, Senator Wilken,  Senator Austerman,  Senator                                                            
Green, Senator Leman, Co-Chair Kelly and Co-Chair Donley                                                                        
                                                                                                                                
The motion FAILED (2-7)                                                                                                         
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
DPS #2: This  amendment adds $278,000  general funds for  the Office                                                            
of the Commissioner BRU,  Commissioner's Office component on page 29                                                            
line 33. Accompanying explanatory language reads as follows.                                                                    
                                                                                                                                
     Restore non-trooper portion of Agency-wide unallocated                                                                     
     reduction.                                                                                                                 
     These  funds are needed to provide  essential support  services                                                            
     to  public  safety  activities,   and  include  direct  trooper                                                            
     support activities,  such as crime lab analysis and support for                                                            
     the Department's  information systems, and other  public safety                                                            
     activities,  such as  fire safety inspections  for schools  and                                                            
     other public buildings.                                                                                                    
                                                                                                                                
Senator Olson moved for adoption.                                                                                               
                                                                                                                                
Senator Ward objected.                                                                                                          
                                                                                                                                
Senator Olson read the explanatory statement into the record.                                                                   
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Hoffman and Senator Olson                                                                                     
                                                                                                                                
OPPOSED: Senator  Ward, Senator Wilken,  Senator Austerman,  Senator                                                            
Green, Senator Leman, Co-Chair Kelly and Co-Chair Donley                                                                        
                                                                                                                                
The motion FAILED (2-7)                                                                                                         
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
DPS #3: This  amendment adds $825,000  general funds for  the Alaska                                                            
State Trooper Detachments  BRU and component on page 30 lines 31 and                                                            
32. Accompanying explanatory language reads as follows.                                                                         
                                                                                                                                
     Add 5  new troopers for investigating  serious reports  of harm                                                            
     to children.                                                                                                               
     The  Senate  Finance Subcommittee   proposal does  not  include                                                            
     funding  for  5 new  Alaska  State Troopers  requested  by  the                                                            
     Governor  to work exclusively  on child  abuse investigations.                                                             
     Without  these additional  troopers, an  immediate response  to                                                            
     these serious  crimes is often not possible and  the backlog of                                                            
     investigations  involving sexual abuse, serious  physical abuse                                                            
     and criminal exploitation  of children will continue. The areas                                                            
     with  the greatest  current need  for these  investigators  are                                                            
     Palmer, Fairbanks and Soldotna.                                                                                            
                                                                                                                                
Senator Hoffman announced  he would not offer this amendment because                                                            
it would essentially  create a new  program, which he reminded  that                                                            
the Senate  Minority pledged  not to  do. However,  he spoke  to the                                                            
amendment,  recounting recent events  of allegations of child  abuse                                                            
occurring in rural  communities and the delays in  responding to the                                                            
situations  due to  inclement weather.   He  suggested that  Village                                                            
Public  Safety Officers  (VPSO) should  be stationed  in more  rural                                                            
communities,  including  St. Paul  and  St. George,  to immediately                                                             
respond and intervene in serious incidences.                                                                                    
                                                                                                                                
This amendment was NOT OFFERED.                                                                                                 
                                                                                                                                
DPS #4: This amendment  adds $95,200 general funds for the Office of                                                            
the Commissioner  BRU, Commissioner's  Office  component on  page 29                                                            
line 33. Accompanying explanatory language reads as follows.                                                                    
                                                                                                                                
     Restore Public Safety oversight capability.                                                                                
     The subcommittee  recommended  a reduction of general  funds in                                                            
     the Commissioner's  Office. These reductions will result in the                                                            
     loss of 2  positions or reassignment of line  division staff to                                                            
     the  Commissioner's  Office.  This  cut  would have  a  serious                                                            
     impact on the ability  of the Commissioner's Office to provide:                                                            
        · Oversight or state public safety management and strategic                                                             
          planning;                                                                                                             
        · Oversight of mission-critical public safety services with                                                             
          adverse,  possibly life threatening affects  to the public                                                            
          during  times  of  public safety  crises,  prevention  and                                                            
          investigation  of crimes,  and search and rescue  missions                                                            
          throughout the State;                                                                                                 
        · Timely responses to citizens inquiries and complaints;                                                                
        · Timely responses to legislative inquires (including bill                                                              
          analysis, fiscal notes, testimony at hearings and general                                                             
          information);                                                                                                         
        · Oversight of division compliance with statutory and                                                                   
          legislative mandates (including missions and measures);                                                               
        · Oversight of labor issues (grievances, arbitration                                                                    
          hearings, negotiation of resolution to problems); and                                                                 
        · Analysis of changes to or adoption of regulations.                                                                    
                                                                                                                                
Senator Olson moved for adoption.                                                                                               
                                                                                                                                
Senator Austerman objected.                                                                                                     
                                                                                                                                
Senator Olson read the explanatory statement into the record.                                                                   
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Hoffman and Senator Olson                                                                                     
                                                                                                                                
OPPOSED: Senator Austerman, Senator Green, Senator Leman, Senator                                                               
Ward, Senator Wilken, Co-Chair Kelly and Co-Chair Donley                                                                        
                                                                                                                                
The motion FAILED (2-7)                                                                                                         
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
DPS #5: This amendment  adds $154,600 general funds for the Fish and                                                            
Wildlife  Protection  BRU, Enforcement  and  Investigative  Services                                                            
Unit component  on page 30 lines 6  and 7. Accompanying explanatory                                                             
language reads as follows.                                                                                                      
                                                                                                                                
     Fund FWP increased fuel costs.                                                                                             
     The Senate Finance  Subcommittee proposal not to fund projected                                                            
     fuel costs  could significantly impact the ability  of troopers                                                            
     to perform field activities.  If prices stay at current levels,                                                            
     taking  enforcement  vessel(s) out  of service  and  additional                                                            
     staff layoffs would have to occur.                                                                                         
                                                                                                                                
Senator Hoffman moved for adoption.                                                                                             
                                                                                                                                
Senator Ward objected.                                                                                                          
                                                                                                                                
Senator Hoffman read the explanatory statement into the record.                                                                 
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Olson and Senator Hoffman                                                                                     
                                                                                                                                
OPPOSED: Senator Ward, Senator Wilken, Senator Austerman, Senator                                                               
Green, Senator Leman, Co-Chair Kelly and Co-Chair Donley                                                                        
                                                                                                                                
The motion FAILED (2-7)                                                                                                         
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
Department of Revenue                                                                                                         
                                                                                                                                
There were no amendments for Department of Revenue.                                                                             
                                                                                                                                
Department of Transportation and Public Facilities                                                                            
                                                                                                                                
KURT PARKAN, Deputy  Commissioner, Department of Transportation  and                                                            
Public Facilities,  testified that the current appropriation  amount                                                            
is approximately $5.8 million  below the amount the Department needs                                                            
to maintain  the  current level  of service.  As  a consequence,  he                                                            
warned:   some  roads  would   no  longer   be  maintained,   winter                                                            
maintenance will  be reduced for some roads, and summer  maintenance                                                            
will be reduced  for some roads. In  addition, he informed  that the                                                            
Alaska Marine  Highway System (MHS)  would experience a significant                                                             
reduction  in  service,  primarily  in  Southeast  Alaska,  in  that                                                            
vessels  would be  "laid up" for  extended periods  and communities                                                             
would not receive the current frequency of sailings.                                                                            
                                                                                                                                
Mr.  Parkan  noted   additional  funding  for  the  Traffic   Signal                                                            
Maintenance component was  added to the Department's budget in MULTI                                                            
#1, which he pointed out is higher than the amount requested.                                                                   
                                                                                                                                
AT EASE 11:03 PM / 11:09 PM                                                                                                     
                                                                                                                                
DOT  #1: This  amendment  adds  $6,649,200  for the  Marine  Highway                                                            
System BRU, Marine  Vessel Operations component on  page 37 line 21.                                                            
This  amendment  also increases  the  $39,120,600  appropriation  in                                                            
Section  25 on page  58 lines 16  through 18.  The amended  language                                                            
reads as follows.                                                                                                               
                                                                                                                                
          Sec. 25. MARINE HIGHWAY SYSTEM FUND. The sum of                                                                       
     $45,769,800  is  appropriated  from  the  general fund  to  the                                                            
     Alaska marine highway system fund (AS 19.65.060).                                                                          
                                                                                                                                
Accompanying  explanatory  language  with  this amendment  reads  as                                                            
follows.                                                                                                                        
                                                                                                                                
     The  Alaska   Marine  Highway  Fund  was  created   to  provide                                                            
     stability during times  of transition and unexpected events. In                                                            
     the past  few years, AMHS has  experienced several events  that                                                            
     contributed  to  the fund's  depletion.  Rather  than  stopping                                                            
     services, the State  has drawn upon the Fund balance to provide                                                            
     continued  and predictable  services.  The fund  will be  empty                                                            
     this year.  Continued rising  costs to operate the system  have                                                            
     resulted in increased appropriation need.                                                                                  
     This  amendment would  restore  weeks of service  that will  be                                                            
     lost with the lay  up of the Taku and Columbia, and the surplus                                                            
     of the  Malaspina. Will restore  service levels to Bellingham,                                                             
     Prince  Rupert, Senator Elton  Panhandle and North Lynn  Canal.                                                            
                                                                                                                                
Senator Hoffman moved for adoption.                                                                                             
                                                                                                                                
Senator Ward objected.                                                                                                          
                                                                                                                                
Senator Hoffman read a portion of the explanatory statement into                                                                
the record.                                                                                                                     
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Olson, Senator Austerman and Senator Hoffman                                                                  
                                                                                                                                
OPPOSED: Senator Leman, Senator Ward, Senator Wilken, Senator                                                                   
Green, Co-Chair Kelly and Co-Chair Donley                                                                                       
                                                                                                                                
The motion FAILED (3-6)                                                                                                         
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
DOT #2: This amendment  adds $475,000 general funds for the Highways                                                            
and Aviation BRU,  Southeast Region Highways and Aviation  component                                                            
on page 36 lines 20 and  21. Accompanying explanatory language reads                                                            
as follows.                                                                                                                     
                                                                                                                                
     Restore maintenance  to Category III roads in  Juneau, Skagway,                                                            
     Ketchikan, Haines, Klawock, Gustavus                                                                                       
     This  amendment will  restore equipment  operator positions  in                                                            
     Gustavus  (1PT),  Haines (1FT,  1PT),  Juneau  (1FT, 1PT),  and                                                            
     Ketchikan  (1FT). It will also restore winter  snow removal and                                                            
     year  round  maintenance  on  170  lane miles  of  highways  in                                                            
     Southeast   communities.  Summer   maintenance  will   also  be                                                            
     restored  to  current   levels  to  avoid  degradation  of  the                                                            
     highways.                                                                                                                  
     Category III roads include such roads as:                                                                                  
     Mendenhall  Peninsula, Montana  Creek, Pt. Lena Loop  in Juneau                                                            
     Old South  Tongass, Cemetery  Road, Shoreline Drive,  and Totem                                                            
     Bite in Ketchikan                                                                                                          
     Lutak Road and Mud Bay in Haines                                                                                           
                                                                                                                                
Senator Hoffman moved for adoption.                                                                                             
                                                                                                                                
Senator Ward objected.                                                                                                          
                                                                                                                                
Senator Hoffman read the explanatory statement into the record.                                                                 
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Olson and Senator Hoffman                                                                                     
                                                                                                                                
OPPOSED: Senator Ward, Senator Wilken, Senator Austerman, Senator                                                               
Green, Co-Chair Kelly and Co-Chair Donley                                                                                       
                                                                                                                                
ABSENT: Senator Leman                                                                                                           
                                                                                                                                
The motion FAILED (2-6-1)                                                                                                       
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
DOT #3: This amendment  adds $514,600 general funds for the Highways                                                            
and Aviation BRU, Central  Region Highways and Aviation component on                                                            
page 36  lines 13 and 14,  and adds $616,900  general funds  for the                                                            
Northern Region Highways  and Aviation component on lines 18 and 19.                                                            
Accompanying explanatory language reads as follows.                                                                             
                                                                                                                                
     Restore maintenance station closures and partial closures.                                                                 
          Central Region                                                                                                        
             Willow Maintenance Station        $292,700 general funds                                                           
     Restore  2  FT equipment  operators.  Station  will  return  to                                                            
     single  shift, 7 day a week operation  with full contingent  of                                                            
     equipment  and commodities to  maintain the Parks Highway  from                                                            
     Big Lake up to Chulitna area.                                                                                              
             Kalsin Bay Maintenance Station $221,900 general funds                                                              
     Restore  full  time  operation  with  2 FT  operators  and  all                                                            
     equipment  and  commodities   to  previous  levels.  This  will                                                            
     provide  7 day  a week  coverage of  the Chiniak  and  Pasaghak                                                            
     Highways. This will  allow much more efficient operation rather                                                            
     than  relaying on equipment  and personnel  traveling  24 miles                                                            
      from Kodiak to Kalsin Bay to perform road maintenance.                                                                    
          Northern Region                                                                                                       
             Birch Lake Maintenance Station $185,000 general funds                                                              
     Restore one  equipment operator, a dump truck,  a loader, and a                                                            
     grader.   The  level  of  service  will  be  restored   on  the                                                            
     Richardson Highway  in the area of Birch Lake. This action will                                                            
     enable crews  to respond timely to storm events.  It will avoid                                                            
     road  closures,  increased   delays  and  reduced  legal  speed                                                            
     limits.                                                                                                                    
             Chitina Maintenance Station       $431,900 general funds                                                           
     Restore  two full  time  and one  seasonal position,  a  grader                                                            
     truck, loader  and associated consumables. Service  levels will                                                            
     be  restored to  Edgerton Highway,  Village  of Chitina,  Kenny                                                            
     Lake School District and the Chitina dipnet fishery.                                                                       
                                                                                                                                
Senator Hoffman moved for adoption.                                                                                             
                                                                                                                                
Senator Ward objected.                                                                                                          
                                                                                                                                
Senator Hoffman read portions  of the explanatory statement into the                                                            
record.                                                                                                                         
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Hoffman and Senator Olson                                                                                     
                                                                                                                                
OPPOSED: Senator  Ward, Senator Wilken,  Senator Austerman,  Senator                                                            
Green, Senator Leman, Co-Chair Kelly and Co-Chair Donley                                                                        
                                                                                                                                
The motion FAILED (2-7)                                                                                                         
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
                                                                                                                                
SFC 02 # 79, Side B 11:13 PM                                                                                                    
                                                                                                                                
                                                                                                                                
DOT  #4: This  amendment deletes  $309,000  general  funds from  the                                                            
Traffic  Signal Management  BRU and  component on  page 35 line  29.                                                            
This amendment  also adds  $309,000 general  funds for the  Highways                                                            
and Aviation BRU, Central  Region Highways and Aviation component on                                                            
page 36  lines 13 and 14.  Of this amount,  the amendment  specifies                                                            
$200,000 is to be spent  for Anchorage Snow Hauling and $109,000 for                                                            
Central   Region  Highways   and  Aviation   Fuel  Cost   Increases.                                                            
Accompanying explanatory language reads as follows.                                                                             
                                                                                                                                
     This amendment will restore 2 snow hauls that have been                                                                    
     reduced from the budget and will avoid the layoff of 1 full                                                                
     time and 1 seasonal equipment operators.                                                                                   
                                                                                                                                
Senator Hoffman moved for adoption.                                                                                             
                                                                                                                                
Senator Ward objected.                                                                                                          
                                                                                                                                
Senator Hoffman read the explanatory statement into the record.                                                                 
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Hoffman and Senator Olson                                                                                     
                                                                                                                                
OPPOSED: Senator  Wilken, Senator Austerman, Senator  Green, Senator                                                            
Leman, Senator Ward, Co-Chair Kelly and Co-Chair Donley                                                                         
                                                                                                                                
The motion FAILED (2-7)                                                                                                         
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
DOT  #5:  This  amendment  adds  $130,000   general  funds  for  the                                                            
Statewide Facility  Maintenance and  Operations BRU, Central  Region                                                            
Facilities  component on page 35 line  21. Accompanying explanatory                                                             
language reads as follows.                                                                                                      
                                                                                                                                
     Restore cuts to Central Region facilities.                                                                                 
     Restore  2 FT  building  specialists  to maintain  the  Highway                                                            
     Maintenance   Stations  and  199  other  buildings   owned  and                                                            
     maintained  by DOT&PF.  The plumber  and  electrician would  be                                                            
     able to keep  buildings from further deterioration  and provide                                                            
     continual operation  so that highway crews can accomplish their                                                            
     work.                                                                                                                      
                                                                                                                                
Senator Hoffman moved for adoption.                                                                                             
                                                                                                                                
Senator Ward objected.                                                                                                          
                                                                                                                                
Senator Hoffman  read a  portion of the  explanatory statement  into                                                            
the record.                                                                                                                     
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Hoffman and Senator Olson                                                                                     
                                                                                                                                
OPPOSED: Senator  Austerman, Senator  Green, Senator Leman,  Senator                                                            
Ward, Senator Wilken, Co-Chair Kelly and Co-Chair Donley                                                                        
                                                                                                                                
The motion FAILED (2-7)                                                                                                         
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
University of Alaska                                                                                                          
                                                                                                                                
UNIV  #1: This  amendment  adds  $8,989,700  general funds  for  the                                                            
University  of Alaska  BRU, Budget  Reductions/Additions-Systemwide                                                             
component  on page  37 lines  32 and  33.  Accompanying explanatory                                                             
language reads as follows.                                                                                                      
                                                                                                                                
     This amendment fully funds the Board of Regents University of                                                              
     Alaska FY 03 request.                                                                                                      
                                                                                                                                
Senator Olson moved for adoption.                                                                                               
                                                                                                                                
Senator Ward objected.                                                                                                          
                                                                                                                                
Senator Olson  read the explanatory statement into  the record along                                                            
with additional comments as follows.                                                                                            
                                                                                                                                
     Over 80  percent of the jobs  available in Alaska require  some                                                            
     level  of postsecondary  education  and  virtually  all of  the                                                            
     fast-growing    and   highest   demand   occupations    require                                                            
     postsecondary  education. Every  industry and job class  in the                                                            
     State,    including    health   care,    process   industries,                                                             
     transportation,    information    technology,    construction,                                                             
     engineering,  business administration, finance  and tourism, is                                                            
     facing  worker  shortage  over  the  next few  years.  Each  is                                                            
     depending  on  the  University   for training   and  continuing                                                            
     education.  The health care industry  has asked the  University                                                            
     to double the output  of nurses over the next four years and is                                                            
     planning  to match  State funding  to make  this happen.  Other                                                            
     industries  are also stepping up to assist the  development and                                                            
     funding of new programs  specific to their needs. There is also                                                            
     an increasing need for more teachers as well.                                                                              
     State  funding for research  is matched  by nearly six  dollars                                                            
     for   every  dollar   of  State  investment.   These   research                                                            
     activities  in  Alaska  represent a  major  industry  employing                                                            
     several  thousand  employees  and generating  as  much  private                                                            
     sector employment  and economic activity as all but a few other                                                            
     industries in the State do.                                                                                                
     The State  budget represents $8.9 million less  than the amount                                                            
     needed to meet the minimum FY 03 fixed costs.                                                                              
                                                                                                                                
Co-Chair Donley  commented that the  appropriation contained  in the                                                            
committee substitute, through  the efforts of Co-Chair Kelly and the                                                            
support of Senator Wilken,  represents an $8 million increase to the                                                            
University  system over  FY 02. He  furthered that  for many  years,                                                            
while other departments  absorbed significant budget reductions, the                                                            
University  has continued  to receive  major  funding increases.  He                                                            
reiterated that  the State is "faced with an immense  budget deficit                                                            
this year". He  characterized the additional $8 million  as a "very,                                                            
very  meaningful  increase"  that  in  part,  holds  the  University                                                            
harmless for funding salary increases.                                                                                          
                                                                                                                                
Senator  Leman  pointed  out that  in  addition  to the  $8  million                                                            
increase  in general funds  the University  budget is receiving  $35                                                            
million from other fund sources.                                                                                                
                                                                                                                                
Co-Chair  Donley surmised  that no Senate  Finance Committee  member                                                            
would refuse  to invest  more money  into the  University of  Alaska                                                            
system, if given a different fiscal situation.                                                                                  
                                                                                                                                
Senator Wilken  noted that in the  previous three years,  the amount                                                            
of general funds  appropriated to the University has  increased 18.9                                                            
percent.                                                                                                                        
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Hoffman and Senator Olson                                                                                     
                                                                                                                                
OPPOSED:  Senator  Green,  Senator  Leman,   Senator  Ward,  Senator                                                            
Wilken, Senator Austerman, Co-Chair Kelly and Co-Chair Donley                                                                   
                                                                                                                                
The motion FAILED (2-7)                                                                                                         
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
UNIV #2:  This amendment  changes the funding  source of  $2,315,000                                                            
from  Science and  Tech  Endowment  funds to  general  funds in  the                                                            
University of Alaska BRU,  Fairbanks Organized Research component on                                                            
page 38 line 16.                                                                                                                
                                                                                                                                
This amendment was NOT OFFERED.                                                                                                 
                                                                                                                                
UNIV.  #3:  This amendment   adds $800,000  general  funds  for  the                                                            
University  of Alaska  BRU, Budget  Reductions/Additions-Systemwide                                                             
component  on page  37 lines  32 and  33.  Accompanying explanatory                                                             
language reads as follows.                                                                                                      
                                                                                                                                
     Currently  the University  scholars program  is funded  through                                                            
     the  Natural Resources  Fund  (NRF) at  an FY02  costs of  $1.9                                                            
     million.  University's commitment  to the Scholars program  has                                                            
     fully utilized  available Natural Resource Fund  resources. The                                                            
     FY  03  estimated  cost of  the  UA Scholars  program  is  $2.7                                                            
     million. This $800,000  request will fund the cost in excess of                                                            
     what is available from NRF resources.                                                                                      
                                                                                                                                
This amendment was NOT OFFERED.                                                                                                 
                                                                                                                                
Office of the Governor                                                                                                        
                                                                                                                                
GOV  #1:  This  amendment  adds  $567,000   general  funds  for  the                                                            
Agencywide   Reductions  BRU,  Agency-wide   Unallocated   Reduction                                                            
component  on  page  18 lines  8  and  9. Accompanying  explanatory                                                             
language reads as follows.                                                                                                      
                                                                                                                                
     This unallocated cut  would reduce Departmental employees by an                                                            
     estimated   9   full-time   positions.   The   reduction   will                                                            
     significantly reduce  the resources available to a new governor                                                            
     in establishing  the new administration  and operations  of the                                                            
     Governor's Office.                                                                                                         
                                                                                                                                
Senator Olson moved for adoption.                                                                                               
                                                                                                                                
Senator Ward objected.                                                                                                          
                                                                                                                                
Senator Olson read the explanatory statement into the record.                                                                   
                                                                                                                                
Senator  Leman expressed  he  is unsure  why an  unallocated  budget                                                            
reduction  would only impact  the new  gubernatorial administration                                                             
and anticipated  that the  current Administration  would not  "short                                                            
change" the  succeeding Administration  by expending more  than half                                                            
of the total appropriation.  If this was a possibility, he suggested                                                            
the Legislature  should insert  intent language  into the budget  to                                                            
stipulate otherwise.                                                                                                            
                                                                                                                                
Senator Olson  did not  oppose inserting  such intent language  into                                                            
the amendment.                                                                                                                  
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Olson and Senator Hoffman                                                                                     
                                                                                                                                
OPPOSED: Senator  Ward, Senator Wilken,  Senator Austerman,  Senator                                                            
Green, Senator Leman, Co-Chair Kelly and Co-Chair Donley                                                                        
                                                                                                                                
The motion FAILED (2-7)                                                                                                         
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
GOV  #2: This  amendment adds  $243,400  general  funds and  $24,200                                                            
GF/Match  funds  for  the Agencywide   Reductions  BRU, Agency-wide                                                             
Unallocated  Reduction   component  on  page   18  lines  8  and  9.                                                            
Accompanying explanatory language reads as follows.                                                                             
                                                                                                                                
     This  amendment  would  restore the  unallocated  reduction  of                                                            
     $267,600 that is equivalent  to the amount needed to fund labor                                                            
     costs in  FY 03. Not funding the Year 3 labor  costs will force                                                            
     vacant  at least 3  departmental positions.  This will  further                                                            
     impede the new administration.                                                                                             
                                                                                                                                
Senator Olson moved for adoption.                                                                                               
                                                                                                                                
Senator Ward objected.                                                                                                          
                                                                                                                                
Senator Olson read the explanatory statement into the record.                                                                   
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Hoffman and Senator Olson                                                                                     
                                                                                                                                
OPPOSED: Senator  Ward, Senator Wilken,  Senator Austerman,  Senator                                                            
Green, Senator Leman, Co-Chair Kelly and Co-Chair Donley                                                                        
                                                                                                                                
The motion FAILED (2-7)                                                                                                         
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
GOV  #3:  This  amendment   adds  $350,000  federal   funds  to  the                                                            
Governmental  Coordination  BRU and  component  on page  18 line  4.                                                            
Accompanying explanatory language reads as follows.                                                                             
                                                                                                                                
     Anticipated  increase  in Alaska's allocation  for the  federal                                                            
      6217 coastal nonpoint source pollution program funding.                                                                   
     No  additional  general   funds  are  required  to  match  this                                                            
     increased allocation.                                                                                                      
                                                                                                                                
Senator Olson announced this amendment would be NOT OFFERED.                                                                    
                                                                                                                                
Language Section                                                                                                              
                                                                                                                                
LANG #1:  This amendment  deletes changes to  Section 10 adopted  in                                                            
MULTI #1, which  inserted language  on page 53, beginning  on line 7                                                            
to read as follows.                                                                                                             
                                                                                                                                
          Sec. 10. INTENT AND FINDINGS. (a) It is the intent of the                                                             
     legislature  that the amounts appropriated by  this Act are the                                                            
     full amounts  that will be appropriated for those  purposes for                                                            
     the fiscal year ending June 30, 2003.                                                                                      
          (b)                                                                                                                   
                                                                                                                                
Accompanying explanatory language to LANG #1 reads as follows.                                                                  
                                                                                                                                
     It appears  that this section initiates the action  outlines in                                                            
     SB 182  (the Pro-Rata Bill),  particularly with the  reductions                                                            
     to formula  programs in DHSS  [Department of Health  and Social                                                            
     Services] (Adult Public Assistance and Foster Care).                                                                       
                                                                                                                                
This amendment was NOT OFFERED.                                                                                                 
                                                                                                                                
LANG #2:  This amendment  adds a new subsection  (c) to Section  24.                                                            
LEARNING  OPPORTUNITY  GRANTS,  on  page  58,  [subsection  (b)  was                                                            
adopted in MULTI #1] to read as follows.                                                                                        
                                                                                                                                
          (c) it is the intent of the legislature that the funding                                                              
     allocated  for  Learning  Opportunity  Grants be  allocated  to                                                            
     school  districts  based  on  the  school  district's  adjusted                                                            
     average  daily  membership. It  is further  the  intent of  the                                                            
     legislature that if legislation is approved by the Twenty-                                                                 
     Second Alaska State  Legislature to increase the quality school                                                            
     grants  within the  public school  funding  program, that  this                                                            
     funding  will be  utilized for  that increase  rather than  for                                                            
     Learning Opportunity Grants.                                                                                               
                                                                                                                                
This amendment was NOT OFFERED.                                                                                                 
                                                                                                                                
AT EASE to 11:30 PM                                                                                                             
                                                                                                                                
Senator  Leman "moved  to report,  it's  gonna be  what? Anyway  the                                                            
Senate committee substitute  for committee substitute House Bill 404                                                            
Finance from Committee with individual recommendations."                                                                        
                                                                                                                                
Senator  Hoffman asked  if no other  action would  be taken  on this                                                            
bill.                                                                                                                           
                                                                                                                                
Co-Chair Donley  replied this was  true and noted one change  to the                                                            
Alaska Court System funding.                                                                                                    
                                                                                                                                
AT EASE 11:31 PM / 11:33 PM                                                                                                     
                                                                                                                                
Co-Chair Donley  restated the motion to "move the  Finance committee                                                            
substitute  as  amended  for  House Bill  404  from  Committee  with                                                            
individual recommendations."                                                                                                    
                                                                                                                                
Without objection SCS CS HB 404 was REPORTED from Committee.                                                                    
                                                                                                                                
Department of Corrections (cont.)                                                                                             
                                                                                                                                
COR #10:  This amendment  deletes  $207,100 general  funds from  the                                                            
Administration   and   Operations   BRU,  Correctional    Industries                                                            
Administration  component on page 9 lines 10 and 11.  This amendment                                                            
also  adds $207,100  general  funds  for the  Community Residential                                                             
Centers  BRU, Existing Community  Residential  Centers component  on                                                            
page 10 lines 24 and 25.                                                                                                        
                                                                                                                                
Senator Ward moved for adoption.                                                                                                
                                                                                                                                
Senator Hoffman objected for an explanation.                                                                                    
                                                                                                                                
Senator  Ward explained  this  amendment  transfers  funds from  the                                                            
McKinley Meat  Packing Plant program, noting the amount  is the same                                                            
as listed in COR #4.                                                                                                            
                                                                                                                                
Senator Hoffman removed his objection.                                                                                          
                                                                                                                                
Without objection the amendment was ADOPTED.                                                                                    
                                                                                                                                
MULTI #2: This amendment changes funding sources and makes other                                                                
changes to appropriations of the following components in the                                                                    
following amounts.                                                                                                              
                                                                                                                                
     Department of Administration                                                                                               
                                                                                                                                
          Motor Vehicles BRU and component                                                                                      
          Page 5 line 18                                                                                                        
          Delete: $5,636,200 GF/Program Receipts                                                                                
          Add: $5,636,200 Receipt Supported Services                                                                            
                                                                                                                                
     Department of Education and Early Development                                                                              
                                                                                                                                
          Alyeska Central School BRU and component                                                                              
          Page 12 line 23                                                                                                       
          Delete: $500,000 GF/Program Receipts                                                                                  
          Add: $500,000 Receipt Supported Services                                                                              
                                                                                                                                
          Mt. Edgecumbe Boarding School BRU and component                                                                       
          Page 13 lines 10 and 11                                                                                               
          Delete: $57,400 GF/ Program Receipts                                                                                  
          Add: $57,400 Receipt Supported Services                                                                               
                                                                                                                                
          Alaska Library and Museums BRU                                                                                        
          Museum Operations component                                                                                           
          Page 13 line 18                                                                                                       
          Delete: $293,900 GF/Program Receipts                                                                                  
          Add: $293,900 Receipt Supported Services                                                                              
                                                                                                                                
     Department of Revenue                                                                                                      
                                                                                                                                
          Child Support Enforcement BRU and component                                                                           
          Page 32 line 17                                                                                                       
          Delete: $3,036,500 GF/Program Receipts                                                                                
          Add: $3,244,00 Receipt Supported Services                                                                             
          Add: $194,200 Federal Receipts                                                                                        
                                                                                                                                
          Administration and Support BRU                                                                                        
          Agency-wide Unallocated Reduction component                                                                           
          Page 33 lines 24 and 25                                                                                               
          Add: $424,500 general funds                                                                                           
          Add: $60,500 GF/Program Receipts                                                                                      
                                                                                                                                
          Alcohol Beverage Control Board BRU and component                                                                      
          Page 32 lines 19 and 20                                                                                               
          Add: $15,000 general funds (hearings/investigate                                                                      
          complaints)                                                                                                           
                                                                                                                                
Senator Leman moved for adoption.                                                                                               
                                                                                                                                
Senator Hoffman objected for an explanation.                                                                                    
                                                                                                                                
Senator   Leman  told   of  the   efforts  of   the  Department   of                                                            
Administration,  the Department of  Education and Early Development                                                             
and the  Division of Legislative  Finance  to prepare these  funding                                                            
source changes.                                                                                                                 
                                                                                                                                
Senator  Leman noted  the increased  funding for  the Child  Support                                                            
Enforcement  component  would be  used to  fund five  positions.  He                                                            
qualified that  while the amendment does not authorize  establishing                                                            
new  positions,  the  funds  could  be  utilized  to  fill  existing                                                            
vacancies.  He stated the purpose  of this effort is to address  the                                                            
backlog in the Division of Child Support Enforcement.                                                                           
                                                                                                                                
Senator Leman  also pointed out this amendment adds  funding for the                                                            
Alcohol  Beverage Control  (ABC) Board, reminding  the Committee  of                                                            
the budget  subcommittee's intent  to identify non-general  funds to                                                            
use for this program.                                                                                                           
                                                                                                                                
AT EASE 11:37 PM / 11:37 PM                                                                                                     
                                                                                                                                
The amendment was ADOPTED without objection.                                                                                    
                                                                                                                                
Language Section (cont.)                                                                                                      
                                                                                                                                
LANG #3: This  amendment deletes "relative"  and inserts  "compared"                                                            
on page  53 line 23. This  amendment also  inserts language  on line                                                            
26, following  "Act." The  amended language  of Section 11  reads as                                                            
follows.                                                                                                                        
                                                                                                                                
          Sec. 11. REAPPROPRIATION OF UNEXPENDED BALANCE. (a) The                                                               
     unexpended balance  on a cash basis on December 31, 2002, of an                                                            
     appropriation  made in sec. X of this Act is  reappropriated to                                                            
     the  department  to  which  the  appropriation   was  made  for                                                            
     operating  expenses of that department during  January 1, 2003,                                                            
     through June 30, 2003.                                                                                                     
          (b) It is the intent of the legislature that each agency                                                              
     of the  state report to the legislature  the percentage  of the                                                            
     fiscal  year 2003 authorized  operating expenditures  that were                                                            
     expended  during  the  first six  months  of fiscal  year  2003                                                            
     compared  to  the percentage  of  fiscal year  2002  authorized                                                            
     operating expenditures  that were expended during the first six                                                            
     months of  fiscal year 2002. The reports shall  be submitted to                                                            
     the legislature  by January 31,  2003, and should contain  line                                                            
     item information  for each allocation of an appropriation  made                                                            
     in this Act.  Each department of state government  will be held                                                            
     accountable   for  its  actions,   including  compliance   with                                                            
     appropriation made in sec. X of this Act.                                                                                  
                                                                                                                                
This amendment also inserts "an amount not to exceed two-percent                                                                
of" following "Act" on page 53 line 27. The amended language of                                                                 
Section 12 reads as follows.                                                                                                    
                                                                                                                                
     Section 12.  EARLY EXPENDITURE AUTHORITY. Notwithstanding  sec.                                                            
     Y  of this  Act, an  amount  not to  exceed two-percent  of  an                                                            
     appropriation  made in sec. Y  of this Act may be expended  for                                                            
     the  stated purpose  of that  appropriation  January 12,  2003,                                                            
     contingent  upon compliance with the program  review provisions                                                            
     of AS 37.07.080(h).                                                                                                        
                                                                                                                                
This amendment  also  makes conceptual  changes to  Section 12,  "to                                                            
reduce the amount of 'second-half'  money that can be moved (via the                                                            
Legislative  Budget  and  Audit Committee  review  process)  to  the                                                            
'first-half' of the year."                                                                                                      
                                                                                                                                
This amendment also makes the following stipulations.                                                                           
                                                                                                                                
     Identify the appropriations  that are excluded from the process                                                            
     (that  is, they get full year  appropriation in Sections  1, 2,                                                            
     and  3 of  the bill).  Sections  2 and  3 are  fund roll-up  by                                                            
     agency and statewide. Excluded appropriations consist of:                                                                  
        · All language appropriations (Sections 10 through end of                                                               
          bill                                                                                                                  
        · All formula programs (clarify inclusion of Power Cost                                                                 
           Equalization-not included in House language)                                                                         
        · The University of Alaska                                                                                              
        · Courts                                                                                                                
        · Legislature                                                                                                           
        · Other Allocations specified in the attached list                                                                      
                                                                                                                                
     Divide the  remainder of all appropriations in  half. The half-                                                            
     year  appropriations  will  appear  as Sections  4  through  9.                                                            
     (Sections  5 and 7 are fund roll-ups  by agency and  Sections 8                                                            
     and 9 are fund roll-ups statewide.)                                                                                        
          Insert lead-in language in Section 4.                                                                                 
                                                                                                                                
     The   following   appropriation   items   are   for   operating                                                            
     expenditures  from the general  fund or other funds  as set out                                                            
     in  Section  5  of this  Act  to  the agencies  named  for  the                                                            
     purposes   expressed  for  the  portion  of  the   fiscal  year                                                            
     beginning  July 1, 2002  and ending  December 31, 2002,  unless                                                            
     otherwise   indicated.  A  department-wide,   agency-wide,   or                                                            
     branch-wide  unallocated reduction or increase  set out in this                                                            
     section may be allocated  among the appropriations made in this                                                            
     section to that department, agency or branch.                                                                              
          Insert lead-in language in Section 7.                                                                                 
                                                                                                                                
     The   following   appropriation   items   are   for   operating                                                            
     expenditures  from the general  fund or other funds  as set out                                                            
     in  Section  8  of this  Act  to  the agencies  named  for  the                                                            
     purposes   expressed  for  the  portion  of  the   fiscal  year                                                            
     beginning  January  1, 2003 and  ending June  30, 2003,  unless                                                            
     otherwise   indicated.  A  department-wide,   agency-wide,   or                                                            
     branch-wide  unallocated reduction or increase  set out in this                                                            
     section may be allocated  among the appropriations made in this                                                            
     section to that department, agency, or branch.                                                                             
                                                                                                                                
     In  Sections  4 and  7,  reduce  each allocation  by  10%,  and                                                            
     appropriate  that 10% to new Agency-wide Unallocated  Increases                                                            
     components in each agency.                                                                                                 
                                                                                                                                
     Section  11 of draft version  R differs from the House  version                                                            
     of  HB 403; it  clarifies that  accounting is  to be on  a cash                                                            
     basis (thus  minimizing effort associated with  the December 31                                                            
     close-out)  and it includes intent  language regarding  reports                                                            
     to the legislature.                                                                                                        
                                                                                                                                
     Exempt from Bifurcation                                                                                                    
                                                                                                                                
     Department of Administration                                                                                               
          Special Systems                                                                                                       
                Unlicensed Vessel Participant Annuity Retirement                                                                
                     Plan                                                                                                       
                Elected Public Officers Retirement System Benefits                                                              
          Longevity Bonus Grants                                                                                                
                Longevity Bonus Grants                                                                                          
     Department of Community and Economic Development                                                                           
          State Revenue Sharing                                                                                                 
                State Revenue Sharing                                                                                           
                Municipal Assistance                                                                                            
                National Program Receipts                                                                                       
                Fisheries Business Tax                                                                                          
          Safe Communities Program                                                                                              
                Safe Communities Program                                                                                        
          Qualified Trade Association Contract                                                                                  
               Qualified Trade Association Contract                                                                             
          Alaska Aerospace Development Corporation                                                                              
                Alaska Aerospace Development Corporation                                                                        
                Alaska Aerospace Development Corporation Facilities                                                             
                     Maintenance                                                                                                
          Fisheries Enhancement Tax Receipts                                                                                    
                Fisheries Enhancement Tax Receipts                                                                              
          Alaska Industrial Development and Export Authority                                                                    
                Alaska Industrial Development and Export Authority                                                              
                Alaska Industrial Development Corporation                                                                       
                     Facilities Maintenance                                                                                     
                Alaska Energy Authority Statewide Operations and                                                                
                     Maintenance                                                                                                
          Rural Energy Programs                                                                                                 
                Energy Operations                                                                                               
                Circuit Rider                                                                                                   
                Power Cost Equalization                                                                                         
          Alaska Science and Technology Foundation                                                                              
                Alaska Science and Technology Foundation                                                                        
          Alaska Seafood Marketing Institute                                                                                    
                Alaska Seafood Marketing Institute                                                                              
     Department of Education and Early Development                                                                              
          K-12 Support                                                                                                          
                Foundation Program                                                                                              
                Tuition Students                                                                                                
                Boarding Home Grants                                                                                            
                Youth in Detention                                                                                              
                Schools for the Handicapped                                                                                     
                Community Schools                                                                                               
          Pupil Transportation                                                                                                  
                Pupil Transportation                                                                                            
          Alaska Postsecondary Education Commission                                                                             
                Western Interstate Commission for Higher Education-                                                             
                     Student Exchange Program                                                                                   
     Department of Environmental Conservation                                                                                   
          Air and Water Quality                                                                                                 
                Air and Water Director                                                                                          
                Air Quality                                                                                                     
                Water Quality                                                                                                   
                Commercial Passenger Vessel Environmental                                                                       
                     Compliance Program                                                                                         
     Department of Health and Social Services                                                                                   
          Public Assistance                                                                                                     
                Alaska Temporary Assistance Program                                                                             
                Adult Public Assistance                                                                                         
                General Relief Assistance                                                                                       
                Old Age Assistance-Alaska Longevity Bonus (ALB)                                                                 
                     Hold Harmless                                                                                              
                Permanent Fund Dividend Hold Harmless                                                                           
                Tribal Assistance Programs                                                                                      
          Medical Assistance                                                                                                    
                Medical Services                                                                                                
          Catastrophic and Chronic Illness Assistance                                                                           
                Catastrophic and Chronic Illness Assistance                                                                     
                     (AS 47.08)                                                                                                 
          Public Assistance Administration                                                                                      
                Child Care Benefits                                                                                             
          Children's Health Eligibility                                                                                         
                Children's Health Eligibility                                                                                   
          Purchased Services                                                                                                    
                Foster Care Base Rate                                                                                           
                Foster Care Augmented Rate                                                                                      
                Foster Care Special Need                                                                                        
                Foster Care Alaska Youth Initiate                                                                               
                Subsidized Adoptions & Guardianship                                                                             
                Court Orders and Reunification Efforts                                                                          
     Department of Military and Veterans Affairs                                                                                
          Alaska National Guard Benefits                                                                                        
                Retirement Benefits                                                                                             
     Department of Revenue                                                                                                      
          Permanent Fund Corporation                                                                                            
                Permanent Fund Corporation                                                                                      
          Alaska Housing Finance Corporation                                                                                    
                Alaska Housing Finance Corporation Operations                                                                   
     Department of Transportation and Public Facilities                                                                         
          International Airports                                                                                                
               International Airport Systems Office                                                                             
                Anchorage Airport Administration                                                                                
                Anchorage Airport Facilities                                                                                    
                Anchorage Airport Field and Equipment Maintenance                                                               
                Anchorage Airport Operations                                                                                    
                Anchorage Airport Safety                                                                                        
                Fairbanks Airport Administration                                                                                
                Fairbanks Airport Facilities                                                                                    
                Fairbanks Airport Field and Equipment Maintenance                                                               
                Fairbanks Airport Operations                                                                                    
                Fairbanks Airport Safety                                                                                        
          Marine Highway System                                                                                                 
                Marine Vessel Operations                                                                                        
                Marine Engineering                                                                                              
                Overhaul                                                                                                        
                Reservations and Marketing                                                                                      
                Southeast Shore Operations                                                                                      
                Southwest Shore Operations                                                                                      
                Vessel Operations Management                                                                                    
                Southeast Vessel Operations                                                                                     
                Southwest Vessel Operations                                                                                     
     University of Alaska                                                                                                       
          University of Alaska                                                                                                  
                Budget Reductions/Additions-Systemwide                                                                          
          Statewide Programs and Services                                                                                       
                Statewide Services                                                                                              
                Statewide Networks (ITS)                                                                                        
          University of Alaska Anchorage                                                                                        
                Anchorage Campus                                                                                                
                Kenai Peninsula College                                                                                         
                Kodiak College                                                                                                  
                Matanuska-Susitna College                                                                                       
                Prince William Sound Community College                                                                          
          University of Alaska Fairbanks                                                                                        
                Cooperative Extension Service                                                                                   
                Bristol Bay Campus                                                                                              
                Chukchi Campus                                                                                                  
                Fairbanks Campus                                                                                                
                Fairbanks Organized Research                                                                                    
                Interior-Aleutians Campus                                                                                       
                Kuskokwim Campus                                                                                                
                Northwest Campus                                                                                                
                Rural College                                                                                                   
                Tanana Valley Campus                                                                                            
          University of Alaska Southeast                                                                                        
                Juneau Campus                                                                                                   
                Ketchikan Campus                                                                                                
                Sitka Campus                                                                                                    
     Alaska Court System                                                                                                        
          Alaska Court System                                                                                                   
                Appellate Courts                                                                                                
                Trial Courts                                                                                                    
                Administration and Support                                                                                      
                Agency-wide Unallocated Reduction                                                                               
          Commission on Judicial Conduct                                                                                        
                Commission on Judicial Conduct                                                                                  
          Judicial Council                                                                                                      
                Judicial Council                                                                                                
                Courtwatch                                                                                                      
     Legislature                                                                                                                
          Budget and Audit Committee                                                                                            
                Legislative Audit                                                                                               
                Ombudsman                                                                                                       
                Legislative Finance                                                                                             
                Committee Expenses                                                                                              
                Legislature State Facilities Rent                                                                               
          Unallocated Reduction                                                                                                 
                Agency-wide Unallocated Reduction                                                                               
          Legislative Council                                                                                                   
                Salaries and Allowances                                                                                         
                Administrative Services                                                                                         
                Session Expenses                                                                                                
                Council and Subcommittees                                                                                       
                Legal and Research Services                                                                                     
                Select Committee on Ethics                                                                                      
                Redistricting Board                                                                                             
          Legislative Operating Budget                                                                                          
                Legislative Operating Budget                                                                                    
     Debt Service and Special Appropriations                                                                                    
          Debt Service                                                                                                          
                Debt Retirement Fund                                                                                            
                Certificates of Participation                                                                                   
                School Debt Reimbursement                                                                                       
                Alaska Clean Water Fund Revenue Bonds                                                                           
                Alaska Drinking Water Fund Revenue Bonds                                                                        
                International Airport Revenue Bonds                                                                             
          Special Appropriations                                                                                                
                Anchorage Jail Lease                                                                                            
          Fund Transfers                                                                                                        
                Alaska Children's Trust                                                                                         
                Alaska Clean Water Fund                                                                                         
                Alaska Drinking Water Fund                                                                                      
                Disaster Relief Fund                                                                                            
                Fish and Game Fund                                                                                              
                Marine Highway Stabilization                                                                                    
                Municipal Capital Project Matching Grant Fund                                                                   
                Oil and Hazardous Substance Release Prevention                                                                  
                     Account                                                                                                    
                Oil and Hazardous Substance Release Response                                                                    
                     Account                                                                                                    
                Power Cost Equalization and Rural Electric                                                                      
                     Capitalization Fund                                                                                        
                Permanent Fund Dividend Fund                                                                                    
                Storage Tank Assistance Fund                                                                                    
                Unincorporated Community Capital Project Matching                                                               
                     Grant Fund                                                                                                 
                Power Project Fund                                                                                              
                                                                                                                                
Co-Chair Donley  explained this amendment would bifurcate  the FY 03                                                            
operating   budget  appropriations,   similar  to  the  bifurcation                                                             
approved in the House of Representatives budget legislation.                                                                    
                                                                                                                                
Senator Ward moved for adoption.                                                                                                
                                                                                                                                
Senator Hoffman objected for explanation.                                                                                       
                                                                                                                                
DAVID TEAL, Director, Division  of Legislative Finance, detailed the                                                            
amendment,  beginning with  the reporting  requirements inserted  to                                                            
Section  11,  which  he  said  would  provide   information  to  the                                                            
Legislature  that could  be used in  preparing the  FY 04  operating                                                            
budget. He  noted that the Division  of Legal and Research  Services                                                            
would  replace the  references  to Section  X and Section  Y in  the                                                            
amendment with  the pertinent bill  section numbers once  all of the                                                            
adopted amendments  are incorporated into the committee  substitute.                                                            
                                                                                                                                
Mr. Teal spoke  to the language changes to Section  12, pointing out                                                            
that the language  approved by the  House of Representatives  allows                                                            
for unrestricting  transferring  of funds  allocated for the  second                                                            
half  of the  fiscal year  to be  spent during  the  first half.  He                                                            
informed that  the language in this  amendment restricts  the amount                                                            
of funds that  could be transferred to "two percent  of the budget".                                                            
                                                                                                                                
Mr.  Teal   stated  that   programs  not   listed  as  exempt   from                                                            
bifurcation, would be subject to the bifurcation process.                                                                       
                                                                                                                                
Mr.  Teal  explained  that  the  ten  percent   reduction  from  the                                                            
bifurcated allocations,  stipulated in the amendment  to language in                                                            
Sections  4  and  5,  is transferred   to  an unallocated   increase                                                            
component for each agency  and would be available for expenditure at                                                            
the department's discretion.                                                                                                    
                                                                                                                                
AT EASE 11:43 PM / 11:49 PM                                                                                                     
                                                                                                                                
Ms. McConnell  expressed that she was unsure whether  the authors of                                                            
this  amendment   were  "hoping"   that  with  the  change   of  the                                                            
gubernatorial   administration,    the  political   party   of   the                                                            
administration  would  change  from Democratic  to  Republican.  She                                                            
informed  that  the  bifurcation   provisions  would  significantly                                                             
increase the  workload, in a year  in which the Legislature  is also                                                            
making large  budget reductions.  She remarked  this process  is not                                                            
"worthy" of the  American system, where smooth transitions  are made                                                            
between administrations.                                                                                                        
                                                                                                                                
Ms. McConnell  suggested that "human  nature" is such that  "we tend                                                            
to  ascribe  to  other  people,  the  motives  that  we  would  have                                                            
ourselves."  She expressed  that comments  made to  GOV #1,  "really                                                            
brought that  home to me," as the  comments indicated that  only the                                                            
new Administration would  "suffer" from the budget reductions to the                                                            
Governor's  Office. She stated  this is because  the Committee  made                                                            
the implication  that the current Administration would  expend "more                                                            
than its share"  of the appropriated  funds, thus providing  the new                                                            
Administration  with  less  than its  share.  On the  contrary,  she                                                            
emphasized   that  bifurcating   the  budget   would  restrict   the                                                            
flexibility   of   the  next   governor   in  establishing   a   new                                                            
administration.                                                                                                                 
                                                                                                                                
Ms. McConnell  asserted that  the current  Administration views  the                                                            
appropriations  as "the public's dollars  for State services  and we                                                            
feel a tremendous obligation"  to be responsible in implementing the                                                            
budget. She  pointed out  that, as represented  in the supplemental                                                             
budgets of  the last several years,  certain programs are  not fully                                                            
funded in the current year's  budget, and must be addressed the next                                                            
legislative session regardless of who is the new governor.                                                                      
                                                                                                                                
Ms. McConnell reiterated  testimony she gave before the Committee at                                                            
an  earlier  hearing, regarding  practical  and  legal  concerns  of                                                            
bifurcation.  She  stressed,  "I  really  can't  overemphasize   how                                                            
difficult  a job  I think  you are  creating for  an administration                                                             
that's  going  to come  in  with  lots  of new  people  taking  jobs                                                            
throughout  State government  with tremendous  responsibilities  for                                                            
establishing  their own administration."  She shared her  experience                                                            
when  she entered  her current  position 7  ½ years  prior, and  the                                                            
great amount  of work  required by  the new staff  in the Office  of                                                            
Management  and Budget, each department  and the governor's  office,                                                            
to  review  that year's  budget  and  prepare  supplemental  funding                                                            
requests  as well as proposing  a budget for  the next fiscal  year.                                                            
She noted  that  the next  administration  would have  less time  to                                                            
accomplish  this, due to deadline  changes made by the legislature.                                                             
                                                                                                                                
Ms.  McConnell stated  that  the budgets  for  each  program do  not                                                            
necessarily  "fit  neatly  into six  month  categories"  giving  the                                                            
unpredictable  timing and  amounts of  snowfall as  an example.  She                                                            
spoke of the annual  purchases of gravel, sand and  road salt by the                                                            
Department of  Transportation and Public Facilities  as well as fuel                                                            
purchased  by all departments  and transported  to locations  across                                                            
the  State to  be "in  position  for the  winter activities."  As  a                                                            
result, she  stressed that a disproportionate  amount of  the budget                                                            
must be  expended in the  first portion of  the fiscal year  to take                                                            
advantage of  bulk purchase prices.  She predicted that the  cost of                                                            
these supplies  could increase  if the  departments were  prohibited                                                            
from making large purchases.                                                                                                    
                                                                                                                                
Ms. McConnell  pointed out  that current statutes  do not allow  the                                                            
Legislative  Budget  and  Audit  Committee  to  appropriate  general                                                            
funds;  therefore,  the  provision  in  the  amendment  calling  for                                                            
transfer of funds  allocated to the second six months  of the fiscal                                                            
year in the event  of a special need, could not be  implemented. She                                                            
also  expected  the members  of  the Legislative  Budget  and  Audit                                                            
Committee  would be  busy during the  interim and  unable to  attend                                                            
additional meetings.                                                                                                            
                                                                                                                                
Ms. McConnell  added  that quarterly  payments  to grant  recipients                                                            
normally  made during the  month of December  would not occur  until                                                            
January, causing  cash-flow problems  for non-profit organizations.                                                             
                                                                                                                                
Ms. McConnell spoke to  the provision in the amendment requiring the                                                            
Administration  to issue a comparison report of expenditures  in the                                                            
first six  months of  FY 03 to the  same time  period in FY  02. She                                                            
informed  that  this  data  would   be  of  little  benefit  if  the                                                            
departments were not given  adequate time to include explanations of                                                            
the expenditures,  such  as the amount  of snowfall,  the number  of                                                            
prisoners,  etc.  She stated  that changes  in  expenditure  amounts                                                            
would otherwise be "taken out of context."                                                                                      
                                                                                                                                
Ms. McConnell  opined that of greater  concern than the bifurcation                                                             
proposal  is  the  inadequate  funding  to  many  service  programs.                                                            
However, she asked the  Committee to not adopt this amendment, as it                                                            
would require "unproductive" work.                                                                                              
                                                                                                                                
Senator  Hoffman   asked  if  the  list  of  programs   exempt  from                                                            
bifurcation  is   identical  to  that  approved   by  the  House  of                                                            
Representatives.                                                                                                                
                                                                                                                                
Co-Chair Donley  noted the Western Interstate Commission  for Higher                                                            
Education (WICHE)  program is included in this list  but was omitted                                                            
from the House of Representatives exemption.                                                                                    
                                                                                                                                
Mr. Teal  explained that  the WHICHE  program must  pay dues  to the                                                            
cooperative  organization   "up  front";  therefore,   all  of  this                                                            
program's expenses  occur within the first six months  of the fiscal                                                            
year. He  also noted that  the amendment  states "all formulas"  are                                                            
included  in the exemption  list, although  the PCE program  is not,                                                            
nor  is  it  exempted  in  the  budget  approved  by  the  House  of                                                            
Representatives.                                                                                                                
                                                                                                                                
Senator Hoffman asked why the PCE program is not included.                                                                      
                                                                                                                                
Mr. Teal did not know.                                                                                                          
                                                                                                                                
AT EASE 12:01 AM / 12:05 AM                                                                                                     
                                                                                                                                
Co-Chair  Donley stated  the PCE program  was not  exempted in  this                                                            
amendment because the House  of Representative did not exempt it. He                                                            
did not object to adding it to the exclusion list.                                                                              
                                                                                                                                
Senator  Hoffman moved  to amend  the amendment  to  exempt the  PCE                                                            
program from bifurcation.                                                                                                       
                                                                                                                                
Without objection LANG #3 was AMENDED.                                                                                          
                                                                                                                                
A roll call was taken on the motion to adopt LANG #3 as amended.                                                                
                                                                                                                                
IN  FAVOR: Senator  Leman,  Senator  Ward, Senator  Wilken,  Senator                                                            
Green, Co-Chair Kelly and Co-Chair Donley                                                                                       
                                                                                                                                
OPPOSED: Senator Hoffman, Senator Olson and Senator Austerman,                                                                  
                                                                                                                                
The motion PASSED (6-3)                                                                                                         
                                                                                                                                
The amended amendment was ADOPTED.                                                                                              
                                                                                                                                
Co-Chair Kelly moved "House Bill 403 from Committee with individual                                                             
recommendations, as amended, with accompanying intent language."                                                                
                                                                                                                                
There was no objection.                                                                                                         
                                                                                                                                
Co-Chair Donley thanked staff members of the Committee and the                                                                  
Division of Legislative Finance for their efforts in preparing this                                                             
budget.                                                                                                                         
                                                                                                                                
Without objection SCS CS HB 403 (FIN), 22-LS1295\R, as amended                                                                  
MOVED from Committee.                                                                                                           
                                                                                                                                

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