Legislature(1995 - 1996)

03/02/1995 01:47 PM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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                     HOUSE FINANCE COMMITTEE                                   
                          March 2, 1995                                        
                            1:30 P.M.                                          
                                                                               
  TAPE HFC 95-37, Side 1, #000 - end.                                          
  TAPE HFC 95-37, Side 2, #000 - end.                                          
  TAPE HFC 95-38, Side 1, #000 - end.                                          
  TAPE HFC 95-38, Side 2, #000 - #435.                                         
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Co-Chair  Mark  Hanley called  the  House  Finance Committee                 
  meeting to order at 1:47 p.m.                                                
                                                                               
  PRESENT                                                                      
                                                                               
  Co-Chair Hanley               Representative Martin                          
  Co-Chair Foster               Representative Mulder                          
  Representative Brown          Representative Navarre                         
  Representative Grussendorf    Representative Parnell                         
  Representative Kelly          Representative Therriault                      
  Representative Kohring                                                       
                                                                               
  ALSO PRESENT                                                                 
                                                                               
  Representative Alan Austerman; Representative Bill Williams;                 
  John Walsh,  Staff,  Representative  Foster;  Nancy  Slagle,                 
  Director,   Division  of  Budget   Review,  Office   of  the                 
  Management and Budget, Office of  the Governor; John Salemi,                 
  Director,    Public    Defender   Agency,    Department   of                 
  Administration;  Brant  McGee,  Director, Office  of  Public                 
  Advocacy, Department of  Administration; Wendy Redman,  Vice                 
  President, University of  Alaska;  Del Smith,  Department of                 
  Public Safety.                                                               
                                                                               
  SUMMARY                                                                      
                                                                               
  HB 137    An  Act  making  supplemental  appropriations  for                 
            operating expenses of state government for  fiscal                 
            year 1995; and providing for an effective date.                    
                                                                               
            CSHB 137 (FIN) was reported  out of Committee with                 
            a "do pass" recommendation.                                        
  HOUSE BILL NO. 137                                                           
                                                                               
       "An   Act   making   supplemental  appropriations   for                 
       operating expenses  of state government for fiscal year                 
       1995; and providing for an effective date."                             
                                                                               
                                                                               
                                1                                              
                                                                               
                                                                               
  DEPARTMENT OF CORRECTIONS                                                    
                                                                               
  Representative   Navarre   MOVED   to  adopt   Amendment   1                 
  (Attachment 1).   He explained that Amendment  1 would fully                 
  fund  the  request  of  the  Department of  Corrections  for                 
  Correctional Industries.  He stressed  that a reduction will                 
  result in the closure  of most of the  correctional industry                 
  programs for the remainder of the fiscal year.                               
                                                                               
  Representative Mulder  spoke in  opposition to  Amendment 1.                 
  He  asserted  that  the  Department  of Corrections  made  a                 
  conscious decision to exceed their  appropriation level.  He                 
  emphasized that two additional managers were approved at the                 
  Wildwood and Spring Creek facilities.                                        
                                                                               
  Representative   Navarre   shared   Representative  Mulder's                 
  frustration with the  Department of Corrections.   He argued                 
  that to  penalize the Department  forces undesired  impacts.                 
  He emphasized that  the Correctional  Industry program is  a                 
  good management tool.                                                        
                                                                               
  Representative Brown  spoke in  support of  funding for  the                 
  Correctional  Industry  program.    She  stressed  that  the                 
  private  sector  works  closely with  the  Department.   She                 
  accentuated  that  the  program  helps  to provide  jobs  to                 
  prisoners upon  release.  She  pointed out that  the State's                 
  prison system has been in crisis.  She suggested that a zero                 
  base approach be taken.                                                      
                                                                               
  A roll call vote was taken on the MOTION to  adopt Amendment                 
  1.                                                                           
                                                                               
  IN FAVOR: Brown, Grussendorf, Navarre, Foster                                
  OPPOSED:  Kelly,   Kohring,    Martin,   Mulder,    Parnell,                 
  Therriault,         Hanley                                                   
                                                                               
  The MOTION FAILED (4-7).                                                     
                                                                               
  Representative   Navarre   MOVED   to  adopt   Amendment   2                 
  (Attachment   2).       Representative   Mulder    OBJECTED.                 
  Representative  Navarre explained that Amendment 2 would add                 
  $2.0  million  dollars  for  Statewide   Institutions.    He                 
  acknowledged that the Department overspent their budget.  He                 
  argued that the Department cannot realize sufficient savings                 
  in the remainder  of the  fiscal year to  meet the  approved                 
  funding level.                                                               
                                                                               
  Representative  Mulder  argued against  the  amendment.   He                 
  pointed out  that many of the Commissioner's  FY 95 requests                 
  were funded in the operating budget.  He maintained that the                 
  Department  has  spent  more  than   was  requested  by  the                 
  Governor.                                                                    
                                                                               
                                2                                              
                                                                               
                                                                               
  Representative  Brown  observed  that  the  vacancy   factor                 
  approved in the FY 95 operating budget was higher than could                 
  be achieved.  She emphasized that correctional  institutions                 
  require 24 hour supervision.   She questioned the effect  of                 
  relocating  prisoners  on the  State's  public safety.   She                 
  emphasized that the Department's management has changed.                     
                                                                               
  Representative Navarre observed  that the  FY 95 budget  for                 
  the Department of Corrections was  built on the Department's                 
  ability to  realize savings from  changes in operation.   He                 
  noted  that  the  Department  was not  able  to  achieve the                 
  budgeted   vacancy  factor.     He  acknowledged   that  the                 
  Department  did  not   make  changes   recommended  by   the                 
  Legislature.   He stressed  that the  new Administration  is                 
  willing to implement  some of  the proposed  solutions.   He                 
  noted that the Department is requesting $3.0 million dollars                 
  for  the rest of  FY 95.   He  stressed that  the Department                 
  would still have to realize a $1.0 million dollar savings.                   
                                                                               
  Representative  Mulder  pointed out  that  a  realignment of                 
  prisoners was funded  by the Subcommittee.   He argued  that                 
  the  Department  did  not take  the  opportunity  to utilize                 
  efficiencies.                                                                
                                                                               
  Representative Navarre acknowledged  that efficiencies  were                 
  not  achieved.   He  observed that  there  was a  11 percent                 
  growth  factor.   He stressed  that savings  for  empty beds                 
  cannot be realized  if additional prisoners are  expected to                 
  fill the beds.                                                               
                                                                               
  A roll call  vote was taken on the MOTION to adopt Amendment                 
  2.                                                                           
                                                                               
  IN FAVOR: Brown, Grussendorf, Navarre, Foster                                
  OPPOSED:  Kelly,   Kohring,    Martin,   Mulder,    Parnell,                 
  Therriault,         Hanley                                                   
                                                                               
  The MOTION FAILED (4-7).                                                     
                                                                               
  Representative  Navarre urged  the Committee to  provide the                 
  opportunity for the Department to receive funding in another                 
  vehicle if they can clearly  justify the alternatives taken.                 
                                                                               
                                                                               
  DEPARTMENT OF ADMINISTRATION                                                 
                                                                               
  Representative  Brown MOVED to adopt Amendment 3 (Attachment                 
  3).                                                                          
  Co-Chair Hanley  OBJECTED.   Representative Brown  explained                 
  that Amendment  3 would  fully fund  the FY  95 supplemental                 
  request by the  Office of Public  Advocacy.  She  emphasized                 
                                                                               
                                3                                              
                                                                               
                                                                               
  that  the Office of Public  Advocacy and the Public Defender                 
  Agency  are  part  of  the criminal  justice  system.    She                 
  observed  that  the   Constitution  requires  court  ordered                 
  representation  be  provided.    She  accentuated  that  the                 
  inability to  provide  representation  interferes  with  the                 
  adjudication system and hampers law enforcement efforts.                     
                                                                               
  BRANT MCGEE, DIRECTOR, OFFICE OF PUBLIC ADVOCACY, DEPARTMENT                 
  OF ADMINISTRATION  stated  that the  supplement  request  is                 
  needed to pay  bills to contractors and  other professionals                 
  who  provide  legal  services.    He emphasized  that  cases                 
  appointee by  the  court to  the Office  of Public  Advocacy                 
  cannot be refused.   He emphasized that the Agency  may have                 
  to  delay cases until  FY 96.   He observed that  abused and                 
  neglected  children will  be  adversely  affected  if  cases                 
  cannot  be  continued.   If  cases  are  continued a  $333.0                 
  million dollar shortfall would result.                                       
                                                                               
  Representative Grussendorf  noted that  the Legislature  has                 
  increased law enforcement  efforts.  He maintained  that all                 
  individuals deserve representation.  He  spoke in support of                 
  Amendments 3 and 4.                                                          
                                                                               
  Representative Kohring spoke against Amendments 3 and 4.  He                 
  acknowledged  that  the Office  of  Public Advocacy  and the                 
  Public Defender Agency are working  with minimal dollars and                 
  have  a  large backlog  of cases.    He emphasized  that the                 
  situation  is  not  unanticipated  or   an  emergency.    He                 
  maintained that the problem is on going and requires changes                 
  in budgeting.    He noted  that  additional funding  can  be                 
  achieved  through  collections.   He  accentuated  that  the                 
  emphasize should  be placed on other receipts and sources of                 
  revenues.                                                                    
                                                                               
  Representative  Brown  noted  that  receipts  for   services                 
  rendered  are  included in  the budget.    She noted  that a                 
  report  in 1990 by the  Ombudsman found that the Legislature                 
  has failed  to fund  the Office  of Public  Advocacy's (OPA)                 
  basic  budget request for  three years, even  though OPA has                 
  documented an on going increase in work load and  associated                 
  costs.                                                                       
                                                                               
  Mr. McGee observed that OPA's  budget has traditionally been                 
  short-funded  by approximately $500.0  thousand dollars.  He                 
  clarified  that  there  are   no  opportunities  to  collect                 
  receipts that  are  not  already included  in  OPA's  FY  95                 
  operating budget.                                                            
                                                                               
  Representative  Kohring  pointed  out  that $200.0  thousand                 
  dollars of OPA's request is being funded.                                    
                                                                               
  A roll call vote was taken on the MOTION to  adopt Amendment                 
                                                                               
                                4                                              
                                                                               
                                                                               
  3.                                                                           
                                                                               
  IN FAVOR: Brown, Grussendorf, Navarre                                        
  OPPOSED:  Kelly,   Kohring,    Martin,   Mulder,    Parnell,                 
  Therriault,         Foster, Hanley                                           
                                                                               
  The MOTION FAILED (3-8).                                                     
                                                                               
  Representative Brown MOVED to adopt Amendment  4 (Attachment                 
  4).  She  observed that the  Public Defender Agency  handles                 
  17,000 cases with 57  lawyers that work and average  of 56.5                 
  hours a week.  She maintained that the public will be harmed                 
  by the failure to fund the request.  She observed that cases                 
  will be delayed.                                                             
                                                                               
  Representative Navarre spoke in support of  Amendment 4.  He                 
  stressed  that  a  class action  lawsuit  could  result from                 
  caseloads  that  do  not  allow  adequate  representation as                 
  required by the Constitution.                                                
                                                                               
  JOHN SALEMI, DIRECTOR, PUBLIC DEFENDER AGENCY, DEPARTMENT OF                 
  ADMINISTRATION observed that the Agency handles 17,000 cases                 
  of which the  majority are criminal.   He observed that  the                 
  Agency is already short by 10  lawyers, as determined by the                 
  National  Standards  Association.    He  stressed  that  the                 
  supplemental request will only keep  the 13 regional offices                 
  open  to the  end of  the  year.   He noted  the  expense of                 
  representation in rural areas of the State.                                  
                                                                               
  (Tape Change, HFC 95-37, Side 2)                                             
                                                                               
  Mr. Salemi stated that if funding  is denied that cases will                 
  be delayed.  He  observed that defendants have the  right to                 
  have their cases processed  within 120 days.   Defendants or                 
  the court can insist that cases continue.                                    
                                                                               
  A roll call vote was taken on the MOTION.                                    
                                                                               
  IN FAVOR: Brown, Grussendorf, Navarre                                        
  OPPOSED:  Kelly,   Kohring,    Martin,   Mulder,    Parnell,                 
  Therriault,         Foster, Hanley                                           
                                                                               
  The MOTION FAILED (3-8).                                                     
                                                                               
  DEPARTMENT OF HEALTH AND SOCIAL SERVICES                                     
                                                                               
  Representative Brown MOVED to  adopt Amendment 5 (Attachment                 
  5).  She noted that the  amendment would fund adult Medicaid                 
  services such as  optometrists and eyeglasses, dental  care,                 
  treatment of speech, occupational  therapy, and hearing  and                 
  language disorders.   The  loss of  these services  impacted                 
  more than 16,000 Alaskans.                                                   
                                                                               
                                5                                              
                                                                               
                                                                               
  Co-Chair Hanley observed  that the decision was  made not to                 
  fund the last 10 optional Medicaid services.   He emphasized                 
  that it is  not appropriate to  restore this funding in  the                 
  middle of the fiscal  year.  He stated that the Committee is                 
  working with the Department to prioritize services.                          
                                                                               
  Representative Therriault  stressed that  a policy call  was                 
  made.  He  expressed the hope  that a proposal be  developed                 
  for the next fiscal year.                                                    
                                                                               
  A roll call vote was taken on the MOTION Amendment 5.                        
                                                                               
  IN FAVOR: Brown, Grussendorf, Foster                                         
  OPPOSED:  Kelly,   Kohring,    Martin,   Mulder,    Parnell,                 
  Therriault,         Hanley                                                   
                                                                               
  The MOTION FAILED (3-7).                                                     
                                                                               
  Representative  Brown MOVED to adopt Amendment 6 (attachment                 
  6).  Co-Chair Hanley OBJECTED for purpose of discussion.  He                 
  observed his  intention of restoring $310.0 thousand dollars                 
  in federal  receipts for the  Department of Health  & Social                 
  Services, Division of Family and Youth Services.                             
                                                                               
  Representative Brown WITHDREW Amendment 6.                                   
                                                                               
  Co-Chair  Hanley MOVED to adopt  Amendment 6A.  He explained                 
  that the amendment would restore  $310.0 thousand dollars in                 
  federal  receipts  for  the Department  of  Health  & Social                 
  Services, Division of Family and Youth Services.                             
                                                                               
  Representative  Martin  spoke  against  Amendment  6A.    He                 
  stressed that the State  should not take federal  money just                 
  be cause it is available.                                                    
                                                                               
  A roll call vote was taken on the MOTION.                                    
                                                                               
  IN FAVOR: Brown,  Grussendorf,   Navarre,  Kelly,   Kohring,                 
  Mulder, Parnell, Therriault, Foster, Hanley                                  
  OPPOSED:  Martin                                                             
                                                                               
  The MOTION PASSED (10-1).                                                    
                                                                               
  Representative Brown MOVED to  adopt Amendment 7 (Attachment                 
  7).  Co-Chair  Hanley OBJECTED.  Representative  Brown spoke                 
  in support of the amendment.  The amendment would fully fund                 
  the  FY 95 supplemental  request for the  Division of Family                 
  and  Youth  Services, for  operational  costs  at Mclaughlin                 
  Youth Center.  She maintained that  the funding is needed to                 
  maintain security.                                                           
                                                                               
                                                                               
                                6                                              
                                                                               
                                                                               
  Co-Chair Hanley noted  that $460.0  thousand dollars of  the                 
  $580,500 thousand dollar request was approved.                               
                                                                               
  A roll call vote was taken on the MOTION.                                    
                                                                               
  IN FAVOR: Brown, Grussendorf, Navarre                                        
  OPPOSED:  Kelly,   Kohring,    Martin,   Mulder,    Parnell,                 
  Therriault,         Foster, Hanley                                           
                                                                               
  The MOTION FAILED (3-8).                                                     
                                                                               
  DEPARTMENT OF LABOR                                                          
                                                                               
  Representative Martin MOVED to adopt Amendment 8 (Attachment                 
  8).  Representative Parnell OBJECTED.  Representative Martin                 
  explained  that  the   amendment  would  appropriate   $55.6                 
  thousand  dollars  to  the Department  of  Labor  for census                 
  mapping.    He  spoke  in  support  of the  amendment.    He                 
  clarified that  no funding  has been  appropriated for  this                 
  item by the Division of Election.                                            
                                                                               
  Representative  Mulder   noted  that  his  support  for  the                 
  amendment  was  continent  on  the  Division  of  Election's                 
  willingness to transfer funding to  the Department of Labor.                 
  Representative Martin  noted that the  Division of Elections                 
  has agreed to transfer funding in FY 96.                                     
                                                                               
  A roll call vote was taken  on the MOTION to adopt Amendment                 
  8.                                                                           
                                                                               
  IN FAVOR: Navarre, Brown, Grussendorf, Martin                                
  OPPOSED:  Kelly,  Kohring,   Mulder,  Parnell,   Therriault,                 
  Foster,        Hanley                                                        
                                                                               
  The MOTION FAILED (4-7).                                                     
                                                                               
  DEPARTMENT OF PUBLIC SAFETY                                                  
                                                                               
  Representative  Grussendorf  MOVED   to  adopt  Amendment  9                 
  (Attachment   9).      Representative    Parnell   OBJECTED.                 
  Representative  Grussendorf  explained  that  the  amendment                 
  would  appropriate  $682.4 thousand  dollars to  support the                 
  Community Jails Program.  He  maintained that 17 communities                 
  containing  contract  jails were  lead  to believe  that the                 
  Governor's Task Force  on the Community Jails  Program would                 
  make adjustments for the current year.                                       
                                                                               
  Representative Parnell  stressed that adjustments  should be                 
  made in the FY 96 budget.  He argued that the Task Force did                 
  not mislead communities.   He noted that the Department  can                 
  transfer funds.                                                              
                                                                               
                                                                               
                                7                                              
                                                                               
                                                                               
  DEL SMITH,  DEPUTY COMMISSIONER,  DEPARTMENT OF  CORRECTIONS                 
  stated that he is not aware of funding within the Department                 
  that can be transferred  to cover community jail costs.   He                 
  acknowledged  that the  Department  indicated that  it would                 
  honor the Task Force's recommendations.                                      
                                                                               
  A roll call vote was taken on the  MOTION to adopt Amendment                 
  9.                                                                           
                                                                               
  IN FAVOR: Brown, Grussendorf, Navarre, Foster                                
  OPPOSED:  Kelly,   Kohring,    Martin,   Mulder,    Parnell,                 
  Therriault,         Hanley                                                   
                                                                               
  The MOTION FAILED (4-7).                                                     
                                                                               
  DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES                           
                                                                               
  Co-Chair Foster MOVED to adopt Amendment 10 (Attachment 10).                 
  He explained that  the amendment  would combine sections  27                 
  and 34  into one to  allow the Department  more flexibility.                 
  Co-Chair Hanley  noted that  the funding  remains the  same.                 
  There being NO OBJECTION, it was so ordered.                                 
                                                                               
  Representative  Grussendorf  MOVED  to  adopt  Amendment  11                 
  (Attachment   11).      Representative   Parnell   OBJECTED.                 
  Amendment 11  would appropriate  $739,836 thousand  dollars,                 
  attributable to interest earned on the Alaska Marine Highway                 
  System  Fund, from  the general  fund to  the  Alaska Marine                 
  Highway System  Fund.  He  emphasized the importance  of the                 
  Alaska Marine Highway to residents of Southeast Alaska.                      
                                                                               
  In  response   to  a  question   by  Representative  Mulder,                 
  Representative Grussendorf noted that  the Columbia would be                 
  held  in  dry  dock  until   June.    Representative  Mulder                 
  questioned if $175.0 thousand dollars would be sufficient to                 
  keep the Columbia on  schedule.  Representative  Grussendorf                 
  did not think $175.0 thousand dollars would be sufficient.                   
                                                                               
  Representative Martin noted that revenues  were reduced as a                 
  result   of  a   decline  of   ridership.     Representative                 
  Grussendorf stressed that  the Alaska Marine  Highway System                 
  pays for a portion of its cost.                                              
                                                                               
  Representative Navarre noted that the  Tustumena will be dry                 
  docked  an  additional eight  weeks  during the  busy summer                 
  months if the request is not approved.                                       
                                                                               
  Representative Therriault  maintained that the  shortfall is                 
  the  result  of policy  calls  by management  of  the Alaska                 
  Marine Highway System.                                                       
                                                                               
  Representative Mulder  noted that  the FY  95 House  Finance                 
                                                                               
                                8                                              
                                                                               
                                                                               
  Subcommittee recommended  that the Alaska Marine Highways be                 
  held   harmless from  serious reductions.   He  acknowledged                 
  that there were factors that were  beyond the control of the                 
  Department.  He  MOVED to  AMEND Amendment 11  to a  reduced                 
  funding level  of $250.0  thousand dollars.   Representative                 
  Grussendorf argued that $250.0 thousand dollars would not be                 
  sufficient to allow ships to operate on schedule.                            
                                                                               
  Representative  Navarre  spoke   in  support  of  sufficient                 
  funding to allow  the Tustumena which serves Kodiak to begin                 
  service on schedule.                                                         
                                                                               
  REPRESENTATIVE BILL  WILLIAMS noted  the  importance of  the                 
  ferry  system  on his  district.   He  ask the  Committee to                 
  support the  request for additional funding.  Representative                 
  Grussendorf argued in favor of increasing the funding amount                 
  in the amendment to the amendment.                                           
                                                                               
  REPRESENTATIVE ALAN AUSTERMAN stated that he did not support                 
  the  supplemental  request for  additional  funding for  the                 
  ferry system.  He maintained that the  Alaska Marine Highway                 
  System can live within its budget.                                           
                                                                               
  Representative Navarre pointed out that service will have to                 
  be reduced if  a supplemental  request is not  granted.   He                 
  stressed  that   communities  will   be  penalized   because                 
  committee members are "mad at the Department."                               
                                                                               
  (Tape Change, HFC 95-38, Side 1)                                             
                                                                               
  Representative Martin alleged that  any supplemental request                 
  granted will be  added to the future base.  He stressed that                 
  agencies must live within their appropriations.                              
                                                                               
  Representative Grussendorf stressed that 17,000 residents in                 
  13 communities in Southeast Alaska  depend on ferry service.                 
  He conceded that bad management decisions resulted in a loss                 
  of  $500.0  thousand  dollars.     He  emphasized  that  the                 
  reduction in service will occur during peak weeks.                           
                                                                               
  Representative  Austerman asserted  that  the Department  is                 
  using the  reduction of  service as  a threat  to get  extra                 
  funds.  He  stressed that the  Department must be forced  to                 
  take responsibility for their own budgets.                                   
                                                                               
  Representative  Navarre  disagreed  that  the Department  is                 
  using a reduction  of services as  a threat.  He  emphasized                 
  that the decision to keep ships in dry dock is the result of                 
  a lack  of options.   He  stressed that  the Committee  must                 
  weight the cost  to communities  and the public.   He  noted                 
  that changes implemented by the Alaska Marine Highway System                 
  have increased revenues  in an effort  to cover the cost  of                 
                                                                               
                                9                                              
                                                                               
                                                                               
  operations.                                                                  
                                                                               
  Representative  Kelly  in  response   to  comments  made  by                 
  Representative Austerman, noted that a highway that  suffers                 
  maintenance  can  be driven  on.   He  noted that  without a                 
  supplemental  appropriation  a  major portion  of  Southeast                 
  Alaska's transportation system will be shut  down.  He spoke                 
  in support of additional funding.                                            
                                                                               
  Representative  Austerman  maintained that  Kodiak residents                 
  accept that the Alaska Marine  Highway System saves money by                 
  tying up ships.                                                              
                                                                               
  REPRESENTATIVE  JERRY  MACKIE  pointed  out that  the  ferry                 
  system  is the  highway  system for  37  communities in  his                 
  district.  He  added that  his constituents  pay to  support                 
  their highway.   He noted that  the extent of state  support                 
  has been reduced.   He observed that his communities  do not                 
  have jet service and are dependent on the ferry system.                      
                                                                               
  Co-Chair Hanley observed  that a  poor management  decisions                 
  contributed to the need for a supplemental.                                  
                                                                               
  Representative Navarre noted  that the original supplemental                 
  request  was  for $2.3  million  dollars.   The  request was                 
  reduced  by  Office  of Management  and  Budget  to $739,836                 
  thousand dollars.   He maintained that the  Department needs                 
  to have the flexibility to manage the system.                                
                                                                               
  There being NO OBJECTION, the  motion to amend Amendment  11                 
  to $250.0 thousand dollars was adopted.                                      
                                                                               
  Representative Navarre MOVED to AMEND Amendment 11 to $500.0                 
  thousand   dollars.      Representative   Martin   OBJECTED.                 
  Representative  Navarre   WITHDREW  his   motion  to   amend                 
  Amendment 11.                                                                
                                                                               
  Representative Navarre MOVED to AMEND Amendment 11 to $400.0                 
  thousand dollars.  A roll call vote was taken on the MOTION.                 
                                                                               
  IN FAVOR: Kelly,  Navarre,  Therriault,  Brown, Grussendorf,                 
  Foster                                                                       
  OPPOSED:  Kohring, Martin, Mulder, Parnell, Hanley                           
                                                                               
  The MOTION PASSED (6-5).                                                     
                                                                               
  A  roll call  vote was  taken  on the  main MOTION  to adopt                 
  Amendment  11  at  the  amended  level  of  $400.0  thousand                 
  dollars.                                                                     
                                                                               
  IN FAVOR: Kelly,  Navarre,  Therriault,  Brown, Grussendorf,                 
  Foster                                                                       
                                                                               
                               10                                              
                                                                               
                                                                               
  OPPOSED:  Kohring, Martin, Mulder, Parnell, Hanley                           
                                                                               
  The MOTION PASSED (6-5).                                                     
                                                                               
  Representative Navarre WITHDREW Amendment 12.                                
                                                                               
  Representative  Brown  MOVED  to adopt  Amendment  13  at an                 
  amended level  of $110.0  thousand dollars (Attachment  12).                 
  The amendment would appropriate $110.0 thousand  dollars for                 
  snow  removal  at the  University  of Alaska,  Anchorage and                 
  Prince William Sound campuses.   Co-Chair Hanley pointed out                 
  that the University  will have  to absorb some  of the  snow                 
  removal costs.  There being NO OBJECTION, it was so ordered.                 
                                                                               
  ALASKA COURT SYSTEM                                                          
                                                                               
  Representative   Navarre  MOVED   to   adopt  Amendment   14                 
  (Attachment  13).  He explained that the amendment would add                 
  $158.6 thousand dollars for costs associated with the Arctic                 
  North Slope royalty case.  There  being NO OBJECTION, it was                 
  so ordered.                                                                  
                                                                               
  DEPARTMENT OF REVENUE                                                        
                                                                               
  Co-Chair Foster MOVED to adopt Amendment 15 (Attachment 14).                 
  He explained that the amendment would reinstate $1.8 million                 
  dollars in corporate receipts to  the Department of Revenue,                 
  Alaska Housing Finance  Corporation (AHFC) to match  federal                 
  HUD funds.   He  noted that  the appropriation  will provide                 
  necessary  improvements  for  rural  housing  projects.   He                 
  emphasized  that  housing  is desperately  needed  in  rural                 
  Alaska.                                                                      
                                                                               
  JOHN  WALSH,  STAFF,  REPRESENTATIVE  FOSTER  explained,  in                 
  response  to concerns  expressed  by Representative  Martin,                 
  that the amendment will not impact the transfer of corporate                 
  receipts.  He  noted that corporate receipts are not subject                 
  to the default provisions.                                                   
                                                                               
  Representative Martin OBJECTED.   Co-Chair Foster noted that                 
  the  appropriation  will bring  in  $9.0 million  dollars in                 
  federal matching funds.                                                      
                                                                               
  Representative Kohring  reiterated that  the amendment  will                 
  leverage a large sum for the state of Alaska.  He noted that                 
  private  funding is  not available  for rural  housing.   He                 
  noted  that there  is  chronic overcrowding  and  a lack  of                 
  weatherization in rural Alaska.                                              
                                                                               
  Co-Chair  Hanley  expressed  concern with  actions  taken by                 
  AHFC.  He repeated that AHFC has indicated that if the State                 
  takes a dividend  from their  corporate receipts that  their                 
                                                                               
                               11                                              
                                                                               
                                                                               
  bond rating will be adversely effected.                                      
                                                                               
  Co-Chair  Hanley  clarified  in response  to  a  question by                 
  Representative  Parnell, that  this  item was  not discussed                 
  during the FY 95 budget deliberations.  Representative Brown                 
  summarized  that there are new unanticipated federal dollars                 
  that will be lost if a state match is not provided.                          
                                                                               
  Mr. Walsh observed that there has been a continual effort by                 
  congressional leaders to provide  funding for improvement of                 
  Alaska's rural housing.                                                      
                                                                               
  A roll call vote was taken on the MOTION  to adopt Amendment                 
  15.                                                                          
                                                                               
  IN FAVOR: Mulder,  Navarre,  Parnell,   Brown,  Grussendorf,                 
  Kelly,         Kohring, Foster                                               
  OPPOSED:  Martin, Therriault, Hanley                                         
                                                                               
  The MOTION PASSED (8-3).                                                     
                                                                               
  UNIVERSITY OF ALASKA                                                         
                                                                               
  Representative  Therriault  MOVED   to  adopt  Amendment  16                 
  (Attachment  15).    He explained  that  the  amendment will                 
  provide funding for  replacement of panels in  the Butrovich                 
  Building  in the University  of Alaska.   He emphasized that                 
  the panels must  be ordered in this fiscal year  in order to                 
  be available before winter.                                                  
                                                                               
  Representative Mulder  questioned the  cost to  purchase the                 
  panels.                                                                      
                                                                               
  WENDY REDMAN, VICE  PRESIDENT, UNIVERSITY OF ALASKA  did not                 
  know the exact amount needed for the purchase of the panels.                 
                                                                               
                                                                               
  Co-Chair Hanley spoke in support of funding for the purchase                 
  of the  needed  panels.   He suggested  that the  additional                 
  funding could be appropriated in the FY 96 budget.                           
                                                                               
  Amendment 16 was HELD in Committee for further discussion.                   
                                                                               
  DEPARTMENT OF ADMINISTRATION                                                 
                                                                               
  Representative Brown MOVED to adopt Amendment 17 (Attachment                 
  16).  She noted that the amendment would fund $48.0 thousand                 
  dollars for the  continuation of  the Citizen's Foster  Care                 
  Review Board in the Department of Administration.                            
                                                                               
  Co-Chair Hanley  spoke in opposition  of the amendment.   He                 
  maintained that the need was not unanticipated.                              
                                                                               
                               12                                              
                                                                               
                                                                               
  A roll call vote was taken on the MOTION.                                    
                                                                               
  IN FAVOR: Brown, Grussendorf, Navarre, Foster                                
  OPPOSED:  Kelly,   Kohring,    Martin,   Mulder,    Parnell,                 
  Therriault,         Hanley                                                   
                                                                               
  The MOTION FAILED (4-7).                                                     
                                                                               
  MISCELLANEOUS                                                                
                                                                               
  Representative   Martin   MOVED   to  adopt   Amendment   18                 
  (Attachment  17).   He  explained  that the  amendment would                 
  transfer the unappropriated balance of  the Earnings Reserve                 
  Account into the principle of the Permanent Fund.                            
                                                                               
  Co-Chair  Hanley   felt  that   the  issue   needed  further                 
  discussion.   He noted  that there were  some estimates that                 
  permanent fund dividends  would be reduced by  the transfer.                 
  He clarified that the Earnings  Reserve Account would not be                 
  subject to the Constitutional Budget  Reserve sweep since it                 
  is established in the Permanent Fund.                                        
                                                                               
  Discussion ensued in  regards to the effect  of the transfer                 
  on  permanent fund  dividends.   Representative  Brown spoke                 
  against  adoption of  Amendment 18.   Representative  Martin                 
  maintained that the only  way to ensure that the  money will                 
  be saved for future  legislatures is by placing it  into the                 
  principle of the Permanent Fund.                                             
                                                                               
  Representative Parnell stated that  he supports the concept,                 
  but feels there needs to be more discussion.                                 
                                                                               
  A roll call vote was taken on the MOTION.                                    
                                                                               
  IN FAVOR: Navarre, Kelly, Martin, Mulder                                     
  OPPOSED:  Parnell, Therriault, Grussendorf, Kohring, Hanley,                 
  Foster                                                                       
                                                                               
  The MOTION FAILED (4-7).                                                     
                                                                               
  DEPARTMENT OF NATURAL RESOURCES                                              
                                                                               
  Co-Chair Hanley MOVED to adopt Amendment 19 (Attachment 18).                 
  He  explained  that  the amendment  would  appropriate  $1.5                 
  million dollars to the Disaster Relief Fund.  There being NO                 
  OBJECTION, it was so ordered.                                                
                                                                               
  DEPARTMENT OF LAW                                                            
                                                                               
  Co-Chair Hanley MOVED to adopt Amendment 20 (Attachment 19).                 
  He explained that  the amendment  would fully fund  payments                 
                                                                               
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  for judgments against  the State.  There being NO OBJECTION,                 
  it was so ordered.                                                           
                                                                               
  DEPARTMENT OF CORRECTIONS                                                    
                                                                               
  Co-Chair Hanley MOVED to adopt Amendment 21 (Attachment 20).                 
  He  explained  that the  amendment would  add a  new section                 
  regarding the effective date for  payments by the Department                 
  of  Corrections for contempt  of court fines.   He explained                 
  that the section was inadvertently removed when the bill was                 
  redrafted.                                                                   
                                                                               
  Representative  Brown  OBJECTED for  purpose  of discussion.                 
  She  observed  that   the  amendment   indicates  that   the                 
  appropriation is effective  only if  the Court deposits  the                 
  money   into   the  general   fund.     She  asked   if  the                 
  Administration supports the amendment.                                       
                                                                               
  Co-Chair  Hanley  explained  that  the  amendment  asks  the                 
  Attorney General  to notify  the Governor  that there  is no                 
  court order  that  would prevent  the  money from  going  to                 
  general  fund.    Representative  Brown  questioned  if  the                 
  amendment prevents the Court from making any dispositions of                 
  the money other than to the general fund.                                    
                                                                               
  Ms.  Slagle stated that the appropriation  would be null and                 
  void if  the Court  decided to  do anything  with the  money                 
  other than  to place it  into the  general fund.   She noted                 
  that  there has been  a request that money  be placed into a                 
  trust fund for the prisoners.  She observed that the request                 
  was drafted by the Department of Law.                                        
                                                                               
  Representative   Grussendorf  spoke   in   support  of   the                 
  amendment.                                                                   
                                                                               
  There  being  NO  OBJECTION,   Amendment  21  was   adopted.                 
  Representative Navarre stated that he felt the amendment was                 
  unnecessary.    Representative  Brown  expressed  objections                 
  based on her belief that the amendment was unnecessary.                      
                                                                               
  DEPARTMENT OF ADMINISTRATION                                                 
                                                                               
  Representative  Navarre  MOVED  to  RESCIND the  Committee's                 
  action in failing to adopt Amendment 4.  THe amendment would                 
  fund the Public Defender Agency  at $125.0 thousand dollars.                 
  He  explained that  the  Public Defender  Agency anticipates                 
  program receipts  from permanent  fund dividend  collections                 
  which cannot be  spent without authorization.   He suggested                 
  that  the  general fund  amount  could be  reduced  to $36.0                 
  thousand dollars.                                                            
                                                                               
  Co-Chair Hanley pointed out that  the $89.0 thousand dollars                 
                                                                               
                               14                                              
                                                                               
                                                                               
  from permanent fund  collections will be deposited  into the                 
  general fund.                                                                
                                                                               
  A roll call vote was taken on the MOTION to rescind.                         
                                                                               
  IN FAVOR: Brown, Grussendorf, Navarre                                        
  OPPOSED:  Kelly,   Kohring,    Martin,   Mulder,    Parnell,                 
  Therriault,         Foster, Hanley                                           
                                                                               
  The MOTION FAILED (3-7).                                                     
                                                                               
  DEPARTMENT OF REVENUE                                                        
                                                                               
  Representative  Martin MOVED  to adopt  old section 15.   He                 
  explained  that the  amendment  would  add  $259.5  thousand                 
  dollars  for  additional  safekeeping  and  debt  management                 
  advisor fees.  There being NO OBJECTION, it was so ordered.                  
                                                                               
  UNIVERSITY OF ALASKA                                                         
                                                                               
  Co-Chair Hanley referred to Amendment 16.                                    
                                                                               
  Ms. Redman  observed that  the University  is negotiating  a                 
  construction  bid  for  replacement  of  the panels  on  the                 
  Butrovich Building.  She explained that  the funding must be                 
  available when  the bid  is granted.   She  stated that  the                 
  amount  needed  in FY  95  general  fund  dollars is  $989.0                 
  thousand dollars.                                                            
                                                                               
  Representative  Therriault amended  Amendment 16  to reflect                 
  $989.0   thousand   dollars   in   general   fund   dollars.                 
  Representative Therriault  MOVED to adopt  amended Amendment                 
  16.    Representative  Navarre  spoke   in  support  of  the                 
  amendment.  There being NO OBJECTION, it was so ordered.                     
                                                                               
  Representative  Mulder MOVED to report CSHB 137 (FIN) out of                 
  Committee with individual recommendations.                                   
                                                                               
  CSHB 137  (FIN) was  reported out  of Committee  with a  "do                 
  pass" recommendation.                                                        
  ADJOURNMENT                                                                  
                                                                               
  The meeting adjourned at 4:25 p.m.                                           
                                                                               
                                                                               
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