Legislature(2007 - 2008)HOUSE FINANCE 519

03/11/2008 01:30 PM House FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Recessed to 08:30 am 03/12/08 --
*+ HB 311 BUDGET: CAPITAL, SUPP. & OTHER APPROPS TELECONFERENCED
Heard & Held
+ HB 54 CONSTRUCTION OF LEGISLATIVE HALL TELECONFERENCED
Heard & Held
+ HB 357 CLAIMS AGAINST REAL ESTATE LICENSEES TELECONFERENCED
Scheduled But Not Heard
+ HB 414 CRIME VICTIM COMPENSATION FUND TELECONFERENCED
Scheduled But Not Heard
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                      March 11, 2008                                                                                            
                         2:58 P.M.                                                                                              
                                                                                                                                
                        RECONVENED:                                                                                             
                      March 12, 2008                                                                                            
                        11:53:19 AM                                                                                           
                                                                                                                                
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair  Chenault   called  the  House   Finance  Committee                                                                    
meeting to order at 2:58:03 PM.                                                                                               
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Mike Chenault, Co-Chair                                                                                          
Representative Kevin Meyer, Co-Chair                                                                                            
Representative Bill Stoltze, Vice-Chair                                                                                         
Representative Harry Crawford                                                                                                   
Representative Les Gara                                                                                                         
Representative John Harris                                                                                                      
Representative Mike Hawker                                                                                                      
Representative Mike Kelly                                                                                                       
Representative Mary Nelson                                                                                                      
Representative Bill Thomas Jr.                                                                                                  
                                                                                                                                
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Reggie Joule                                                                                                     
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Representative Mark Neuman;  Karen Rehfeld, Director, Office                                                                    
of  Management and  Budget; Bruce  Botelho, Mayor,  City and                                                                    
Borough of  Juneau; Win  Gruening, Chair,  Alaska Committee,                                                                    
Juneau;  Thomas   Buzard,  Self,  Denali   Rose  Properties,                                                                    
Juneau;  Katherine  Eldemar,  Self,  Juneau;  Sharon  Kelly,                                                                    
Staff,  Representative Mike  Chenault; Pete  Ecklund, Staff,                                                                    
Representative Kevin Meyer;  Karen Rehfeld, Director, Office                                                                    
of Management and Budget                                                                                                        
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Paul Kendall, Energy For Our Homes, Anchorage                                                                                   
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 54     An Act  relating to construction of  a legislative                                                                    
          hall;   and  repealing   provisions  relating   to                                                                    
          relocating  the capital,  the legislature,  or any                                                                    
          of the present functions of state government.                                                                         
                                                                                                                                
          HB 54  was HEARD &  HELD in Committee  for further                                                                    
          consideration.                                                                                                        
                                                                                                                                
HB 311    An  Act making  appropriations, including  capital                                                                    
          appropriations,  supplemental appropriations,  and                                                                    
          appropriations to capitalize  funds; and providing                                                                    
          for an effective date.                                                                                                
                                                                                                                                
          HB 311 was  HEARD & HELD in  Committee for further                                                                    
          consideration.                                                                                                        
                                                                                                                                
CSSB 256(FIN) am(efd fld)                                                                                                       
          An   Act   making   supplemental   appropriations,                                                                    
          capital   appropriations,  reappropriations,   and                                                                    
          other appropriations;  making an  appropriation to                                                                    
          the  senior  benefits  payment  program;  amending                                                                    
          certain    appropriations;    ratifying    certain                                                                    
          expenditures;   and   making   appropriations   to                                                                    
          capitalize funds.                                                                                                     
                                                                                                                                
          HCS CS SB 256 (FIN)  was reported out of Committee                                                                    
          with a "do pass" recommendation.                                                                                      
                                                                                                                                
HOUSE BILL NO. 311                                                                                                            
                                                                                                                                
     An   Act  making   appropriations,  including   capital                                                                    
     appropriations,   supplemental    appropriations,   and                                                                    
     appropriations to  capitalize funds; and  providing for                                                                    
     an effective date.                                                                                                         
                                                                                                                                
2:59:51 PM                                                                                                                    
                                                                                                                                
Vice-Chair Stoltze  MOVED to ADOPT work  draft 25-GH12007\C,                                                                    
Kane,  3/8/08  as  the  version   of  the  bill  before  the                                                                    
Committee.  There being NO OBJECTION, it was adopted.                                                                           
                                                                                                                                
Co-Chair Meyer  commented that the  adopted work draft  is a                                                                    
stripped  down version  of the  Governor's proposed  capital                                                                    
projects  including federal  funds  and associated  matches.                                                                    
It will provide a base capital  budget.  He noted the Senate                                                                    
had  adopted a  companion bill  to HB  311.   Co-Chair Meyer                                                                    
invited  Ms. Rehfeld  to speak  to the  $42 million  dollars                                                                    
mostly for specified technology (IT) system-wide changes.                                                                       
                                                                                                                                
3:01:31 PM                                                                                                                    
                                                                                                                                
KAREN REHFELD,  DIRECTOR, OFFICE  OF MANAGEMENT  AND BUDGET,                                                                    
OFFICE  OF THE  GOVERNOR, discussed  how the  Administration                                                                    
arrived  at the  proposed  budget.   In  December 2007,  the                                                                    
Administration   rolled  out   a   two   year  plan,   which                                                                    
anticipated  additional expenditures  in FY08  to be  funded                                                                    
through  the supplemental  bills.    Additionally, they  had                                                                    
requested  the  use of  FY08  surplus  for additional  costs                                                                    
associated with  capital projects.  Overall,  the intent for                                                                    
the  FY09 budget  was  to keep  total  General Fund  dollars                                                                    
including  the  capital  & operating  expenditures  with  an                                                                    
increase over FY08 of about 4.5%.                                                                                               
                                                                                                                                
When the  Administration moved  through the  budget process,                                                                    
identifying  areas that  needed change  for FY09,  including                                                                    
some "must haves" even though,  all of the projects were not                                                                    
included.    There  were many  projects  the  Administration                                                                    
hoped  to include  in the  budget, but  simply did  not have                                                                    
adequate  General  Funds.     In  FY08,  the  Administration                                                                    
requested  a  total  of $34  million  General  Fund  surplus                                                                    
dollars.  She believed the  intention was clear and included                                                                    
                                          th                                                                                    
in the capital  budget bill with a June 30   effective date.                                                                    
The  total amounted  to $29  million  General Fund  dollars.                                                                    
For  FY09, there  are  twenty-seven  requested IT  projects,                                                                    
totaling  $24 million  of  which, $2  million  of which  are                                                                    
General Fund dollars.                                                                                                           
                                                                                                                                
3:05:30 PM                                                                                                                    
                                                                                                                                
Representative  Gara  questioned  if   even  though  the  IT                                                                    
expenses are  necessary, the  Administration decided  not to                                                                    
place them in  the operating budget because  then they could                                                                    
not  meet the  4.5% limit  funding  for FY09.   Ms.  Rehfeld                                                                    
clarified that the 4.5% increase  was a benchmark number the                                                                    
Administration  attempted to  achieve for  FY09 capital  and                                                                    
operating   budgets.     Additionally,  the   Administration                                                                    
requested  the use  of  $34 million  dollars  from the  FY08                                                                    
surplus.                                                                                                                        
                                                                                                                                
Representative  Gara   understood  that  the   Governor  was                                                                    
attempting to  reach a 4.5%  budget increase  projection and                                                                    
in  order to  meet  that  goal was  proposing  use of  funds                                                                    
outside FY09 dollars.  He  emphasized that action creates an                                                                    
artificial  budget goal.   Ms.  Rehfeld  countered that  the                                                                    
Administration has  attempted to  separate the two  years in                                                                    
isolation  but  rather  roll  out  a  comprehensive  package                                                                    
indicating expenditures and savings.   She acknowledged that                                                                    
clearly the  Legislature will  have opportunities  to change                                                                    
that plan.                                                                                                                      
                                                                                                                                
3:08:13 PM                                                                                                                    
                                                                                                                                
Representative Hawker  identified the $2.66  million federal                                                                    
fund sources & the $5.2  million IT funding source services.                                                                    
He asked where  those dollars originated from.   Ms. Rehfeld                                                                    
replied  that  fund  capitalization  occurred  in  the  past                                                                    
Enterprise Technology Services (ETS) fund.                                                                                      
                                                                                                                                
Representative  Hawker pointed  out that  the  other  funds                                                                     
had  not  been  reported  as General  Funds.    Ms.  Rehfeld                                                                    
thought it  could have originated  from other funds  used to                                                                    
pay agency  charge-backs.   She added  that a  discussion of                                                                    
the  Information Services  Fund  (ISF)  would require  other                                                                    
testimony.   She commented that the  capitalization had been                                                                    
included in the operating budget  and that the $5 million is                                                                    
a General  Fund expenditure.  Representative  Hawker pointed                                                                    
out that nearly all of  the $36.8 million dollars originated                                                                    
from the General Fund.  Ms. Rehfeld agreed.                                                                                     
                                                                                                                                
3:09:54 PM                                                                                                                    
                                                                                                                                
Co-Chair Chenault  asked if the Administration  had used the                                                                    
master  lease line  of credit  to pay  for the  IT projects.                                                                    
Ms.   Rehfeld    deferred   that   question    because   the                                                                    
Administration is not proposing to  use that for the budget.                                                                    
She did not know if it had  been used in the past.  Co-Chair                                                                    
Chenault stated that  the credit line is  an issue currently                                                                    
on the  table and he  wanted to know  if it was  intended to                                                                    
use for IT projects.                                                                                                            
                                                                                                                                
Representative Gara asked if the  Governor's proposal to pay                                                                    
down Teacher  Retirement System/Public  Employees Retirement                                                                    
System  (TRS/PERS)  debt  was   included  in  the  operating                                                                    
budget.  Ms. Rehfeld  responded that in the Administration's                                                                    
proposal that expenditure comes out of the FY08 surplus.                                                                        
                                                                                                                                
Representative  Gara  stressed  it   is  important  to  make                                                                    
payment  toward that  debt and  be included  in the  capital                                                                    
budget this year.   Ms. Rehfeld advised that the  plan is to                                                                    
pay down the  TRS portion of the unfunded  liability so that                                                                    
it  would  reduce  the  annual  contribution  by  about  $43                                                                    
million  dollars.   The Alaska  Retirement Management  (ARM)                                                                    
Board supports that choice.                                                                                                     
                                                                                                                                
Representative  Gara  questioned  if paying  down  the  debt                                                                    
could save  long-term dollars  for the  State.   Ms. Rehfeld                                                                    
stated the goal is intended  to relieve some of the pressure                                                                    
on  the  direct contribution  by  paying  down the  unfunded                                                                    
liability.  In order to pay  it down more quickly, the State                                                                    
will need to be more  aggressive, and some discussed options                                                                    
are using Pension Obligation (P.O.) bonds.                                                                                      
                                                                                                                                
3:12:49 PM                                                                                                                    
                                                                                                                                
Co-Chair  Meyer  stated  that  HB   311  would  be  HELD  in                                                                    
Committee for further consideration.                                                                                            
                                                                                                                                
3:13:03 PM                                                                                                                    
                                                                                                                                
HOUSE BILL NO. 54                                                                                                             
                                                                                                                                
     An Act relating to  construction of a legislative hall;                                                                    
     and  repealing provisions  relating  to relocating  the                                                                    
     capital,  the  legislature,  or   any  of  the  present                                                                    
     functions of state government.                                                                                             
                                                                                                                                
REPRESENTATIVE MARK  NEUMAN, SPONSOR, directed  his comments                                                                    
to the legislation.   He stated that  the relative isolation                                                                    
of Juneau from  the rest of the State is  of concern to many                                                                    
Alaskans, particularly  at a time  when the  legislature has                                                                    
come  under   increasing  public  scrutiny.     Due  to  the                                                                    
location, many  Alaskans are unable  to afford  the airfare,                                                                    
food and lodging  to travel to Juneau to  participate in the                                                                    
process.  He added, over 25%  of Alaskans do not have access                                                                    
to  media outlets  for watching  Gavel  to Gavel.   The  net                                                                    
effect is  that during the legislative  session, legislators                                                                    
remain isolated  from the vast  majority of  Alaskans, being                                                                    
accessible only to lobbyists and special interest groups.                                                                       
                                                                                                                                
HB  54  addresses  the concerns  voiced  by  Alaskans  about                                                                    
access.   The  legislation provides  an opportunity  for all                                                                    
interested Alaskan entities to  submit proposals to host the                                                                    
Alaska  State Legislature.   The  proposals will  compete on                                                                    
their  merit and  ability  to meet  the  present and  future                                                                    
needs of Alaska.                                                                                                                
                                                                                                                                
Representative Neuman  noted that  the bill does  not affect                                                                    
the  State  Capital, only  the  Legislature.   HB  54  would                                                                    
create an  environment, where the public  and private sector                                                                    
partner  together  to  share the  benefits  of  hosting  the                                                                    
legislature  and  the cost.    He  concluded his  testimony,                                                                    
indicating  that  the  bill  would  improve  access  to  the                                                                    
legislative process  for ordinary  Alaskans by  easing their                                                                    
physical access and improving the  serviceable nature of the                                                                    
facilities.                                                                                                                     
                                                                                                                                
3:16:47 PM                                                                                                                    
                                                                                                                                
Representative Nelson asked what  purpose Juneau would serve                                                                    
without the  Capital seat.  Representative  Neuman responded                                                                    
that even  if the Legislature  is not located in  Juneau, it                                                                    
would  still  stand as  the  State  Capitol.   Many  of  the                                                                    
current functions  would remain  in Juneau.   He  added that                                                                    
the proposal does not preclude  Juneau from participating in                                                                    
the process.                                                                                                                    
                                                                                                                                
Representative  Nelson  pointed   out  that  presently,  the                                                                    
majority of  the current Administration operates  outside of                                                                    
Juneau,  pointing out  that only  one commissioner  lives in                                                                    
Juneau.   Representative Neuman agreed, commenting  that was                                                                    
the Administration, not the Legislature.   As members of the                                                                    
Legislature, legislators  are responsible  to the  people of                                                                    
their districts.   To  allow access to  those people  in the                                                                    
public process is critical.                                                                                                     
                                                                                                                                
Representative Nelson noted support  for the public process.                                                                    
She indicated that the 90-day  session hinders that process.                                                                    
She inquired  the Mat-Su's participation rate  in their City                                                                    
Council and  school board  meetings.   Representative Neuman                                                                    
responded  that  there have  been  over  250 people  at  one                                                                    
meeting.                                                                                                                        
                                                                                                                                
Representative  Nelson  asked   about  the  weekly  assembly                                                                    
meetings.    Representative  Neuman responded  often  times,                                                                    
there is only standing room.                                                                                                    
                                                                                                                                
3:19:45 PM                                                                                                                    
                                                                                                                                
Representative   Gara  asked   how  many   people  comprises                                                                    
"standing room only".   Representative Neuman suggested that                                                                    
depends on  the issue  and that their  assembly hall  is not                                                                    
that large.                                                                                                                     
                                                                                                                                
Representative Gara  suggested that  Representative Neuman's                                                                    
response to  the number of  people attending  those meetings                                                                    
were for the issues that  are the most heated and emotional.                                                                    
The    question   was    how    many   "normally     attend.                                                                    
Representative Neuman  responded, it is  fair to say  a good                                                                    
amount  participates.   Representative  Gara reiterated  the                                                                    
question  of  how  many  people  attend  a  normal  assembly                                                                    
meeting.  He  noted that the question was asked  and that it                                                                    
was not answered.                                                                                                               
                                                                                                                                
Representative Gara  understood that the bill  proposed that                                                                    
communities that  want a bid  to build the  legislative hall                                                                    
would have to  offer a certain amount of acreage.   He asked                                                                    
where   in    the   bill   that   language    was   located.                                                                    
Representative Neuman  replied that there is  nothing in the                                                                    
bill  indicating that  specifically.   The  bill does  state                                                                    
that  if a  community  selects acreage  on  State land,  the                                                                    
State should attempt  to facilitate a transfer  of that land                                                                    
over to  that community.   He supported the provision  as it                                                                    
would help communities expand their land base.                                                                                  
                                                                                                                                
3:22:53 PM                                                                                                                    
                                                                                                                                
Representative  Gara  asked  where  the  verbiage  regarding                                                                    
acreage donation  was located in  the bill.   Representative                                                                    
Neuman referenced Section C, Page 4.                                                                                            
                                                                                                                                
Representative Gara  clarified that the bill  moves only the                                                                    
legislature not  the capitol.  Representative  Neuman stated                                                                    
that  the intent  of the  bill  is to  allow communities  to                                                                    
submit a proposal to the  Legislature for either approval of                                                                    
construction  for a  legislative hall.   The  bill does  not                                                                    
stipulate that the Legislature will move.                                                                                       
                                                                                                                                
Representative Gara asked  if there could be  a situation in                                                                    
which  Juneau proposes  another site  and the  capitol moves                                                                    
there.    Representative  Neuman responded  that  if  Juneau                                                                    
selected  a   different  site,   other  than   the  existing                                                                    
properties, it  would be  up to  the community  to undertake                                                                    
the  bidding procedure.   There  had  been consideration  of                                                                    
reconstruction or renovation of the existing site.                                                                              
                                                                                                                                
3:26:00 PM                                                                                                                    
                                                                                                                                
Representative  Gara questioned  if one  of the  purposes of                                                                    
the  bill was  to get  the  capital closer  to more  people.                                                                    
Representative Neuman  responded that the entire  purpose is                                                                    
to allow  communities to  submit proposals  for construction                                                                    
of a legislative  hall.  He hoped to see  a legislative hall                                                                    
located on  the road system.   There are 60  legislators who                                                                    
participate  in  that  process with  only  three  living  in                                                                    
Juneau.  He acknowledged that  the issue is popular with his                                                                    
constituents.                                                                                                                   
                                                                                                                                
3:27:40 PM                                                                                                                    
                                                                                                                                
Representative Gara  agreed that  one of  the considerations                                                                    
is better access; however, there  are arguments both pro and                                                                    
con for  moving the legislature.   One of the  pro arguments                                                                    
is better access  and that one could make  a convincing case                                                                    
for moving it to Anchorage  where the bulk of the population                                                                    
lives.   However,  moving it  40-miles  away from  Anchorage                                                                    
does not  give the majority  of Alaskans any  better access.                                                                    
The  bill  as  written  has   every  chance  of  moving  the                                                                    
legislation to  a place just  as unavailable to  the Alaskan                                                                    
citizens as it is now.                                                                                                          
                                                                                                                                
Representative Gara urged that  a determination be made that                                                                    
the legislature  not be  moved to  Eagle, Beaver  or Willow,                                                                    
because   there  is   no  better   access  to   those  small                                                                    
communities.   Representative  Neuman pointed  out that  the                                                                    
bill does  state "anywhere  on the  road system";  it allows                                                                    
communities to  come up with  a proposal, which they  can be                                                                    
submitted for  consideration.   Accessing Juneau  because of                                                                    
the weather  and ferry system  delays.  He added,  over half                                                                    
of all  high school students  reside in Anchorage  and those                                                                    
students  would like  to  participate  in their  legislative                                                                    
system.                                                                                                                         
                                                                                                                                
3:31:27 PM                                                                                                                    
                                                                                                                                
Representative Hawker  referenced the many comments  made by                                                                    
Representative  Neuman  as   the  legislation  providing  an                                                                    
"opportunity"  for communities  to prepare  proposals for  a                                                                    
legislative hall.   As he  [Representative Hawker]  read the                                                                    
bill, there  is no  language indicating  the    offering the                                                                    
right  to  propose  to  communities.     He  understood  the                                                                    
language  to  provide  the "solicitation  of  proposals  for                                                                    
construction of the  legislative hall".  He asked  if it was                                                                    
the  intent of  the  sponsor  that it  was  available to  an                                                                    
innovative   adventure-development   corporation   to   step                                                                    
forward with  a proposal.   Representative Neuman  said yes;                                                                    
he intended to provide a  proposal for any entity to partner                                                                    
with a community, to submit a proposal.                                                                                         
                                                                                                                                
3:33:06 PM                                                                                                                    
                                                                                                                                
Representative  Thomas  questioned   if  the  sponsor  would                                                                    
oppose  language  providing  "the right  of  first  refusal                                                                     
amendment.   He worried about the  already depressed economy                                                                    
in Southeast  Alaska.  He  questioned why the  sponsor would                                                                    
strip one  part of  the State's  economy to  enhance another                                                                    
area  that is  already thriving.    He pointed  out that  in                                                                    
Juneau,  there are  only three  legislators that  get to  go                                                                    
home at night and be with  their family.  Having the capitol                                                                    
in Juneau, creates  a "level playing field.    He urged that                                                                    
legislators take care of one another.                                                                                           
                                                                                                                                
Representative  Neuman  stated  that  the  bill  is  not  an                                                                    
attempt to place  hardship on any community.   He noted that                                                                    
Juneau has  over one million  tourists a year  pass through.                                                                    
Every community in the State has  its ups and downs and that                                                                    
Kenai also is suffering these days.   He questioned if it is                                                                    
the   Legislature's    obligation   to    insure   financial                                                                    
responsibility to any one community.                                                                                            
                                                                                                                                
3:36:54 PM                                                                                                                    
                                                                                                                                
Representative  Thomas responded  that  the Legislature  did                                                                    
that  when they  rallied behind  Anchorage and  Fairbanks by                                                                    
not  shutting down  the military  bases.   Those communities                                                                    
were   protected  through   actions   taken   by  the   full                                                                    
Legislature.                                                                                                                    
                                                                                                                                
3:37:21 PM                                                                                                                    
                                                                                                                                
Representative Crawford read  the back-up material including                                                                    
a conversation the sponsor had  with a private developer and                                                                    
determination of a  location of 1,000 land acres.   He asked                                                                    
the profit  motives to build on  such a big and  remote area                                                                    
that would  only be occupied  for three  months a year.   He                                                                    
questioned the inclusion of a  judicial hall.  He reiterated                                                                    
his question regarding the profit motives of the developer.                                                                     
                                                                                                                                
Representative Neuman commented on  the need for legislators                                                                    
to introduce  legislation that is  reasonable".   Instead of                                                                    
just  introducing  the bill,  he  acknowledged  that he  had                                                                    
moved through the  steps to determine how  feasible the idea                                                                    
is.   He had  proposed the  idea to the  Mat-Su Mayor  & the                                                                    
community,  which determined  some  acreage  & proposed  the                                                                    
development rights  to a  developer, using  that land.   The                                                                    
investment  consideration was  around $200  million dollars,                                                                    
providing  enough  economic base  to  cover  the cost  of  a                                                                    
legislative  hall  for  an  economic  base  of  $70  million                                                                    
dollars.   The remainder  could go  into housing  projects &                                                                    
high-scale homes to help the  developer recoup their initial                                                                    
development.    The  State  would   be  able  to  lease  the                                                                    
legislative  hall.   It would  be  private investment  money                                                                    
going into  a community,  which could provide  assistance to                                                                    
the Mat-Su  Borough for  reduction in  property values.   He                                                                    
maintained that  there is a lot  of investment consideration                                                                    
for communities to utilize for a plan.                                                                                          
                                                                                                                                
Representative Neuman  pointed out  that the  Legislature is                                                                    
in charge of the recall process  and because of that, it was                                                                    
recommended that the proposal provide  for the capacity of a                                                                    
judicial  hall in  case those  types of  proceeding need  to                                                                    
move forward.                                                                                                                   
                                                                                                                                
3:42:28 PM                                                                                                                    
                                                                                                                                
Representative  Crawford   asked  clarification   about  the                                                                    
intended   community  that   would  be   built  around   the                                                                    
structured  legislative   hall  with   regard  to   how  the                                                                    
developer  would  recoup their  investment.    He asked  who                                                                    
would  be providing  the infrastructure,  roads &  the sewer                                                                    
systems.   He questioned where  the profit would  come from.                                                                    
Representative Neuman  did not know.   He only wanted  to be                                                                    
able  to  offer  communities  the  option  of  submitting  a                                                                    
proposal.                                                                                                                       
                                                                                                                                
Representative  Crawford assumed  that the  conversation has                                                                    
happened  in  which  the  developers  assumed  there  was  a                                                                    
proposal possibility  for this profitable option.   He asked                                                                    
where    that   that    possibility    currently   is    at.                                                                    
Representative Neuman  responded that  he had meet  with the                                                                    
Mat-Su Mayor and local developers in his district.                                                                              
                                                                                                                                
3:44:32 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Stoltze thanked  Representative  Neuman for  his                                                                    
work  on the  legislation.   He  mentioned  the history  and                                                                    
passion of Juneau's capital position.   He disputed comments                                                                    
made by  Representative Thomas.   He asked  if the  bill was                                                                    
proposing a plan like that  previously proposed by Jim Clark                                                                    
and  Mayor Botelho.   Representative  Neuman responded  that                                                                    
the money that was spent on  the previous plan came from the                                                                    
City & Borough  of Juneau and that he did  not know if those                                                                    
funds  had been  State subsidized.   The  bottom-line is  to                                                                    
determine if  communities can  come up with  a plan  to move                                                                    
forward with the proposal.                                                                                                      
                                                                                                                                
3:47:24 PM                                                                                                                    
                                                                                                                                
Representative  Kelly elaborated  on the  "death by  a 1,000                                                                    
cuts", indicating  that he was  not passionate  about moving                                                                    
the capital.   He  inquired if  members had  determined that                                                                    
the current building  is an inadequate space.   He mentioned                                                                    
the good merit of  the Fiscally Responsible Alaskans Needing                                                                    
Knowledge (FRANK) initiative.   He wanted to  see the entire                                                                    
issue and  prices associated  with a move.   He  pointed out                                                                    
that there  are many capitols  located in the  smaller towns                                                                    
and that by  placing it in the largest  population center is                                                                    
disconcerting because of the concentration of power.                                                                            
                                                                                                                                
Representative   Neuman  viewed   the   bill  as    Juneau's                                                                    
opportunity to  put the baby to  bed.   He pointed  out that                                                                    
the current building  does not meet fire codes  and that the                                                                    
building is  inadequate.  The  FRANK initiative  attempts to                                                                    
define and uncover the social  and economic deficiencies for                                                                    
the  cost of  moving  the legislature.    The proposed  bill                                                                    
recommends  that a  building be  built  by private  industry                                                                    
developers.   He emphasized that  the bill is  about Alaska,                                                                    
not about Juneau and/or the Legislature.                                                                                        
                                                                                                                                
3:53:16 PM                                                                                                                    
                                                                                                                                
Representative  Gara  advised  that the  issue  is  delicate                                                                    
because  moving  the capitol  will  destroy  the economy  in                                                                    
Juneau and  that is not addressed  in the bill.   One option                                                                    
would be to  insure for 20-years, all  State Office building                                                                    
functions stay in Juneau even  if the Legislature moves.  He                                                                    
questioned if  consideration had  been made  in the  bill on                                                                    
how  to   minimize  the  damage  to   the  local  community.                                                                    
Representative  Neuman  responded  that  maybe  it  wouldn't                                                                    
move.                                                                                                                           
                                                                                                                                
3:54:26 PM                                                                                                                    
                                                                                                                                
BRUCE BOTELHO, MAYOR, CITY AND  BOROUGH OF JUNEAU, testified                                                                    
on  behalf of  Juneau in  opposition to  HB 54.   He  listed                                                                    
issues in which,  he disagreed.  He clarified  that the bill                                                                    
is  not a  simple competition  for a  legislative hall.   As                                                                    
noted  by  Representative  Crawford,  the  bill  requires  a                                                                    
building that is designed to  house not only the Legislature                                                                    
but also the Judiciary Supreme Court including a chamber.                                                                       
                                                                                                                                
The another point of disagreement  is that Juneau could look                                                                    
at  renovation of  the  current building.    To examine  the                                                                    
specifications as  directed by  the Legislative  Counsel for                                                                    
the  building,   one  would  find   that  it  would   be  an                                                                    
impossibility to construct on  the present site.  Generally,                                                                    
for  any  community  to  have   the  capacity  to  fund  the                                                                    
construction   required  for   a   new  capitol,   virtually                                                                    
eliminates most  communities' ability to bond.   He compared                                                                    
the  proposed  bill  to  HB 60,  as  submitted  by  previous                                                                    
Representative  Rokeberg,  the  precursor  legislation  from                                                                    
which HB 54 was modeled.                                                                                                        
                                                                                                                                
3:57:57 PM                                                                                                                    
                                                                                                                                
Mayor Botelho  reported that HB  54, which purports to  be a                                                                    
competition  for  a  legislative hall,  is  actually  beyond                                                                    
that.   It achieves that  result by  what he assumes  is the                                                                    
most  difficult  part  of  the  bill,  repealing  the  FRANK                                                                    
initiative.    He  added,  37  states  have  their  capitols                                                                    
outside of the major populated areas of that state.                                                                             
                                                                                                                                
Mayor Botelho  commented on the  point of agreement  and the                                                                    
source  of commonality  with Representative  Neuman, quoting                                                                    
from  the Alaska  State Constitution,  Article  1, Sec.  2.,                                                                    
Source of Government.                                                                                                           
                                                                                                                                
      All political  power is inherent  in the people.   All                                                                    
     government originates  with the people is  founded upon                                                                    
     their will only, and is  instituted solely for the good                                                                    
     of the people as a whole."                                                                                                 
                                                                                                                                
Mayor  Botelho elaborated  that  language is  the source  of                                                                    
commonality in when Representative  Neuman declares that all                                                                    
parts  of the  State should  be able  to participate  in the                                                                    
legislative process.   The difficult issue is  the repeal of                                                                    
the FRANK initiative.   The point is that there  is no issue                                                                    
in the State's history over  which the people of Alaska have                                                                    
been called upon to exercise  their sovereign power found in                                                                    
the above listed  section of the Constitution  than over the                                                                    
question of  where their  government should  be seated.   It                                                                    
has been reaffirmed repeatedly, a three part proposition.                                                                       
                                                                                                                                
   •    The people have the right to know and approve in                                                                      
        advance, all costs of relocating the  capitol or the                                                                    
        legislature;                                                                                                            
   •    The people must be given the opportunity to make an                                                                   
        informed &  objective  decision  on  relocating  the                                                                    
        capitol or the  Legislature with all  pertinent data                                                                    
        concerning the costs to the State; and                                                                                  
   •    The costs of relocating the capitol or legislature                                                                    
        will not  be  incurred  by  the  State  without  the                                                                    
        approval of the electorate.                                                                                             
                                                                                                                                
Mayor  Botelho   advised  that  HB  54   repeals  the  FRANK                                                                    
initiative.  He  maintained that there will be  costs to the                                                                    
State and if the sponsor believes  there will be no costs to                                                                    
the State, why does the bill seek to repeal the initiative.                                                                     
                                                                                                                                
4:01:35 PM                                                                                                                    
                                                                                                                                
Mayor Botelho  discussed the reasons that  the bill attempts                                                                    
to repeal the FRANK initiative:                                                                                                 
                                                                                                                                
   •    While Section 2 of the bill does propose that the                                                                     
        option not  require a  lease payment,  the provision                                                                    
        can be repealed or amended by any future legislature                                                                    
        or  simply  circumvented  by   using  any  financing                                                                    
        mechanism, which does not obligate the State through                                                                    
        lease payments.                                                                                                         
   •    The bill authorizes the transfer of an unlimited                                                                      
        amount of State land to a  municipality, at no cost,                                                                    
        as long as the selected  proposal includes language:                                                                    
        "A site wholly or partially on State land".                                                                             
                                                                                                                                
Mayor  Botelho  noted that  a  transfer  of State  land  for                                                                    
relocation   of   the   capitol   or   legislature   is   an                                                                    
appropriation and  will be a  cost to  the State, just  as a                                                                    
direct appropriation of money.                                                                                                  
                                                                                                                                
Mayor Botelho  raised the question  regarding that  the true                                                                    
cost of the  proposal is withheld from the  people until the                                                                    
project  is  complete.    He asked  if  Alaskans  should  be                                                                    
deprived of  an impartial  review of what  the costs  are of                                                                    
the move.  He stated that  the message being conveyed by the                                                                    
bill is  that the  people should not  be entrusted  with the                                                                    
power to know the costs.                                                                                                        
                                                                                                                                
Mayor  Botelho urged  members  to  determine any  compelling                                                                    
reason, to  override the repeated expressions  of the people                                                                    
of the State through the FRANK Initiative.                                                                                      
                                                                                                                                
Co-Chair  Meyer mentioned  that  he  preferred the  proposal                                                                    
over  his own  legislation as  it offers  any community  the                                                                    
option  to  participate  in  the  process.    He  referenced                                                                    
comments about the  number of states that do  not have their                                                                    
capitol city in the largest  populated areas of their state;                                                                    
noting that in all states  except Hawaii, citizens can drive                                                                    
to  their capitol  city and  that makes  Alaska unique.   He                                                                    
disputed the message of the  "cost to the State", explaining                                                                    
that this is the "people's  government" & wanted to know the                                                                    
cost to  the people,  when airfare cost  over $500  for each                                                                    
trip out of Juneau.  Most  citizens of Alaska can not afford                                                                    
that seat fare.                                                                                                                 
                                                                                                                                
4:05:14 PM                                                                                                                    
                                                                                                                                
Vice-Chair Stoltze  asked clarification  between the  City &                                                                    
Borough of  Juneau, the taxpayers and  the Alaska Committee.                                                                    
Mayor Botelho responded that the  City and Borough of Juneau                                                                    
(CBJ)  has regularly  funded the  Alaska  Committee and  the                                                                    
activities  undertaken by  that Committee  such as  Gavel to                                                                    
Gavel.                                                                                                                          
                                                                                                                                
Vice-Chair  Stoltze  believed  that   some  of  the  general                                                                    
election ballot  expenditures exceeded costs of  running the                                                                    
Gavel to  Gavel program.   Mayor Botelho responded  that was                                                                    
true during election campaigns in 2002.                                                                                         
                                                                                                                                
Vice-Chair  Stoltze argued  that in  2004, CBJ  attempted to                                                                    
facilitate  passage   of  measures   that  would   make  the                                                                    
initiative  process  more  difficult  to put  forward.    He                                                                    
mentioned  the   costs  associated  with  the   Cruise  Ship                                                                    
Initiative  costing  around  $35 thousand  dollars.    Mayor                                                                    
Botelho responded  that the expenditures for  Gavel to Gavel                                                                    
far exceeds that amount every year.                                                                                             
                                                                                                                                
Vice-Chair Stoltze  questioned if  CBJ had been  involved in                                                                    
the  2004  ballot  measure to  change  the  rules  regarding                                                                    
petitions.   Mayor Botelho requested that  Mr. Gruening from                                                                    
the   Alaska   Committee   answer  questions   about   those                                                                    
expenditures.   The CBJ does  make yearly  appropriations to                                                                    
the Alaska Committee.                                                                                                           
                                                                                                                                
Co-Chair  Meyer asked  if Alaska  Airlines still  offers the                                                                    
Constituency  Fare.   Mayor Botelho  replied they  do.   Co-                                                                    
Chair Meyer  asked if it was  for only one trip  per person.                                                                    
Mayor Botelho understood that was correct.                                                                                      
                                                                                                                                
Vice-Chair Stoltze  stated that there had  previously been a                                                                    
measure   proposed    that   would   require    more   voter                                                                    
participation  &  major  expenditures  on  capitol  location                                                                    
initiatives.    Mayor Botelho advised that the  voice of the                                                                    
people came through  in the FRANK Initiative.   That measure                                                                    
was again  before the  voters in  2002 and  that 77%  of the                                                                    
electorate turned the proposal down.                                                                                            
                                                                                                                                
Vice-Chair Stoltze  emphasized that the people  of the State                                                                    
opposed  a  measure  to  expand  the  FRANK  Initiative  for                                                                    
applying   to  any   major  expenditure.     Mayor   Botelho                                                                    
acknowledged that the City and  Borough of Juneau thought it                                                                    
made no  sense to  require a  vote of  the people  to decide                                                                    
whether the building should be relocated.                                                                                       
                                                                                                                                
4:09:42 PM                                                                                                                    
                                                                                                                                
Representative  Thomas asked  if  the  building designed  in                                                                    
Juneau  several  years  ago,   would  met  the  requirements                                                                    
proposed in  HB 54.  Mayor  Botelho replied it would  not as                                                                    
it did  not provide for the  Supreme Court to be  located in                                                                    
the same building.                                                                                                              
                                                                                                                                
Representative  Thomas inquired  the  costs associated  with                                                                    
that  that  building.   Mayor  Botelho  noted that  CBJ  had                                                                    
directed the design  consultants to look at  a building that                                                                    
would cost  approximately $100 million dollars  and that was                                                                    
costs from three  years ago.  At that  time, the consultants                                                                    
anticipated that  the cost  of design  & building  in Alaska                                                                    
would supersede those costs.                                                                                                    
                                                                                                                                
In  response   to  comments  made  by   Vice-Chair  Stoltze,                                                                    
Representative Gara  noted that  if someone attempted  to do                                                                    
something as  proposed in the bill,  decimating a community,                                                                    
he  would expect  that community  to spend  local monies  to                                                                    
protect it from  happening.  He applauded  the actions taken                                                                    
by  Juneau in  the  past.   He  maintained,  it  would be  a                                                                    
mistake   to  take   a  capitol   that   has  been   labeled                                                                    
inaccessible  and  move   it  to  a  place   that  is  still                                                                    
inaccessible and  requesting money  to do  that.   There are                                                                    
many arguments  for and against  moving the  legislature but                                                                    
the  biggest argument  against it  is  the dislocation  that                                                                    
would happen to Juneau.                                                                                                         
                                                                                                                                
Mayor Botelho added, it is important  to look at this as not                                                                    
only Juneau  but the entire  Southeast region.  Much  of the                                                                    
activity that  happens in Southeast  Alaska has  direct ties                                                                    
to Juneau.                                                                                                                      
                                                                                                                                
4:12:49 PM                                                                                                                    
                                                                                                                                
Representative  Gara  asked the  history  of  votes for  and                                                                    
against the move of the capitol.                                                                                                
                                                                                                                                
Mayor Botelho  relied on information provided  by the Alaska                                                                    
Division of Elections:                                                                                                          
                                                                                                                                
   • 1960  votes for 18,865, opposed 23,972                                                                                   
   • 1962  votes for 26,542, opposed 32,325                                                                                   
   • 1974 - calling for the construction of a new Alaskan                                                                     
     city, which passed for 46,659, opposed 35,683                                                                              
   • 1976  That vote presented the question of where the                                                                      
     capitol should be moved, choosing Willow and received                                                                      
     56,219 votes                                                                                                               
   • 1978 - General election, the FRANK initiative arose.                                                                     
     The proposition was that there  should be a termination                                                                    
     of  all bondable  costs presented  and approved  by the                                                                    
     voters.   The  requirement passed,  for 69,414,  oppose                                                                    
     55,253                                                                                                                     
   • Simultaneously, there was the general obligation (GO)                                                                    
     bond before the voters, which was rejected with                                                                            
     supporting votes of 31,491 & opposing 88,783                                                                               
   • 1982  The issue to relocate & considering the costs,                                                                     
     determining if the capitol should be moved to Willow.                                                                      
     The vote for was 91,049, oppose 102,083                                                                                    
   • 1994 - The initiative called to move the State Capitol                                                                   
     from Juneau to Wasilla.  The votes for were 96,398,                                                                        
     opposing 116,277.                                                                                                          
                                                                                                                                
Co-Chair Meyer  asked that  a copy  of the  above referenced                                                                    
material be submitted to Committee members.                                                                                     
                                                                                                                                
4:17:02 PM                                                                                                                    
                                                                                                                                
WIN GRUENING,  CHAIR, ALASKA COMMITTEE, spoke  in opposition                                                                    
to HB 54.  The Alaska Committee, which is  a volunteer, non-                                                                    
profit group,  has been dedicated  to improving  & enhancing                                                                    
Juneau as Alaska's  capitol city.  He  recognized that while                                                                    
citizens  of Alaska  have repeatedly  voted down  efforts to                                                                    
move the capitol  or legislature, the issue in  the minds of                                                                    
some,  still has  not been  settled.   The Alaska  Committee                                                                    
does  take seriously  the issue  of capitol  access.   Those                                                                    
efforts  are the  reason  for many  of  the improvements  to                                                                    
access  and  facilities.   He  acknowledged  that there  are                                                                    
additional improvements  that can be  made to make  Juneau a                                                                    
more attractive capitol.  He  noted that CBJ has funded many                                                                    
initiatives that  have improved access to  the State Capitol                                                                    
such as  Gavel to Gavel,  discounted air fares, pier  & port                                                                    
improvements,  as  well  as donations  of  real  estate  and                                                                    
buildings for use by the Legislature.                                                                                           
                                                                                                                                
Mr. Gruening  maintained that technology  has been  and will                                                                    
continue to  be the most  efficient and least  expensive way                                                                    
for  constituents to  have access.    That is  why Gavel  to                                                                    
Gavel  coverage has  continued to  be the  flag-ship program                                                                    
for accessing  the capitol.   Approximately 60% of  the $535                                                                    
thousand dollars  spent on the  program is supported  by the                                                                    
community of Juneau; no State  funds are used.  Mr. Gruening                                                                    
stated that technology, not relocation  of buildings, is the                                                                    
key.  The  intent is to begin  video-streaming all committee                                                                    
hearings,  which  will  require  fixed cameras  in  all  the                                                                    
committee rooms.   Unfortunately,  HB 54 takes  the opposite                                                                    
view and  purports to relocate  government & the  capitol by                                                                    
relocating  the  capitol  building   &  all  the  government                                                                    
functions associated  with it.  The  sponsor's stated intent                                                                    
is  to "address  the concerns  expressed by  Alaskan's about                                                                    
access  &  the  relative  isolation   of  Juneau".    It  is                                                                    
difficult to see how Juneau could possibly win the bid.                                                                         
                                                                                                                                
4:22:45 PM                                                                                                                    
                                                                                                                                
Mr. Gruening noted that the  operation and maintenance costs                                                                    
of funding  a new  building have not  been identified.   The                                                                    
decision  on something  of this  magnitude, will  be decided                                                                    
under the  bill by  a small  committee of  14 people  in the                                                                    
legislature  with no  opportunity for  the public  to review                                                                    
the  true  costs.   The  people's  right  is seeking  to  be                                                                    
repealed in  HB 54.   He stated the  bill was a  blank check                                                                    
for   a  full   capitol  move   and  that   ultimately,  the                                                                    
legislation   would  economically   impoverish  Juneau   and                                                                    
Southeast Alaska.   The issue  is divisive  & controversial.                                                                    
He urged  that the bill  be held  in Committee and  that the                                                                    
Committee instead consider  less expensive alternatives that                                                                    
are available.                                                                                                                  
                                                                                                                                
4:24:28 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Stoltze  asked   about  the  Alaska  Committee's                                                                    
involvement  on  Ballot  Issue  1 in  2004.    Mr.  Gruening                                                                    
responded that the  amount of money spent on  that issue was                                                                    
not large.   He noted  that the Committee took  the position                                                                    
that getting  signatures in only downtown  Anchorage was not                                                                    
representing the  views of the entire  State when attempting                                                                    
to pass an initiative.  A  belief continues to exist that it                                                                    
would  be  more  democratic  to  guarantee  signatures  were                                                                    
gathered from  all over the State,  not just one area.   The                                                                    
Alaska Committee did back that legislation.                                                                                     
                                                                                                                                
Vice-Chair Stoltze  expounded that the dollars  submitted by                                                                    
the  Alaska  Committee was  the  "only  real money"  in  the                                                                    
campaign and that it was not  a small amount.  He maintained                                                                    
that there was  involvement by the Alaska  Committee in that                                                                    
vote,  now making  it  more difficult  for  citizens to  "do                                                                    
initiatives".     Mr.  Gruening   argued  that   the  Alaska                                                                    
Committee made the process more democratic.                                                                                     
                                                                                                                                
4:26:49 PM                                                                                                                    
                                                                                                                                
Representative  Gara deliberated  that the  amount of  money                                                                    
that the  City & Borough of  Juneau has to spend  every time                                                                    
the capitol move issue comes  up, is substantial.  He agreed                                                                    
that the stronger  the public access is in  Juneau, the less                                                                    
often the issue  will come forward.   He urged consideration                                                                    
of  changing   the  Gavel  to  Gavel   program  in  offering                                                                    
interviews during the  quiet times to make  the process more                                                                    
educational.  He did not  think enough people watch the show                                                                    
and that it could be improved.                                                                                                  
                                                                                                                                
Mr. Gruening pointed  out that recently Gavel  to Gavel went                                                                    
into full coverage with the advent  of 360 North.  It is now                                                                    
a full time station, year-round.   The program coverage will                                                                    
be  expanded   and  other  things  will   be  shown  besides                                                                    
legislative coverage.   He explained  that coverage  must be                                                                    
a-political.                                                                                                                    
                                                                                                                                
Representative   Gara  hoped   to  see   it  becoming   more                                                                    
educational,   addressing  politics   in  the   Legislature,                                                                    
helping to make the capitol process more accessible.                                                                            
                                                                                                                                
 4:30:48 PM                                                                                                                   
                                                                                                                                
THOMAS  BUZARD,  SELF,   DENALI  ROSE  PROPERITIES,  JUNEAU,                                                                    
testified in  opposition of HB 54.   He stated that  it does                                                                    
not make  sense to bolster  the economy of one  community at                                                                    
the expense of another.                                                                                                         
                                                                                                                                
Mr. Buzard encouraged  that the focus of  the Legislature be                                                                    
on the development for the State  of Alaska.  He pointed out                                                                    
that access  to Juneau  is better  than ever.   If  the true                                                                    
concern is  about access, he  urged that the road  be built.                                                                    
The health  of Southeast  Alaska continues  to erode  as the                                                                    
issues of  moving the capitol  arise and real  estate values                                                                    
drop each time.   The people that come on  cruise ships only                                                                    
provide  a small  fraction of  the economy.   He  maintained                                                                    
that  the vote  has come  before the  people and  time after                                                                    
time, they  vote not to  spend State dollars for  moving the                                                                    
capitol;  over  77% of  the  electorate  indicated that  the                                                                    
FRANK initiative be left in place.                                                                                              
                                                                                                                                
4:35:09 PM                                                                                                                    
                                                                                                                                
Representative Gara  reiterated that  he was  sympathetic to                                                                    
the argument of moving the  capitol.  He identified that the                                                                    
access to  Juneau is not  good and  that the road  would not                                                                    
help that.  No one will drive  that road in the winter.  The                                                                    
point to  making the  capitol accessible  is Gavel  to Gavel                                                                    
and vibrant telecommunications.   He maintained that driving                                                                    
24 hours will  not make Juneau more accessible.   Getting in                                                                    
and out  of Juneau is  difficult.  There are  more important                                                                    
issues that  need to be  addressed but access should  not be                                                                    
minimized.    Mr.  Buzard  understood  the  difficulty  that                                                                    
legislators  go  through  to  maintain  a  life  outside  of                                                                    
Anchorage.  Juneau is not blind  to that.  The argument does                                                                    
remain  with  a established  economic  base  because of  the                                                                    
hundreds  of millions  of dollars  that the  State would  be                                                                    
spending.   He concluded, many  people already do  not trust                                                                    
government and would be appalled  eliminating the law of the                                                                    
FRANK initiative.                                                                                                               
                                                                                                                                
4:39:19 PM                                                                                                                    
                                                                                                                                
KATHERINE  ELDEMAR, SELF,  JUNEAU, testified  that she  does                                                                    
watch  Gavel  to  Gavel  every  day.    She  suggested  that                                                                    
government  be   here  for   the  people,   commenting  that                                                                    
individual  responsibilities and  family obligations  do not                                                                    
permit her to be at the  Capitol everyday, so she depends on                                                                    
Gavel  to  Gavel.   She  agreed  that Alaskans  should  have                                                                    
access  to  government.    She  recommended  increasing  the                                                                    
coverage.    She maintained  that  moving  the capitol  from                                                                    
Juneau, would break up families  and communities.  She urged                                                                    
that  the video-conferencing  capabilities  be increased  in                                                                    
the rural communities.                                                                                                          
                                                                                                                                
Ms. Eldemar  pointed out  that HB 54  does not  identify the                                                                    
resources that will be utilized  with passage.  She stressed                                                                    
that the State's  resources" are  finite and should be spent                                                                    
on more  pressing issues.   In the rural  communities, there                                                                    
are people just  attempting to stay warm  during the winter.                                                                    
She urged that all  Alaskan children have adequate education                                                                    
instead  of neglected  buildings and  insufficient staffing.                                                                    
She  urged the  use of   Alaska's  resources being  spent on                                                                    
something other than HB 54.                                                                                                     
                                                                                                                                
4:44:58 PM                                                                                                                    
                                                                                                                                
Ms. Eldemar recommended setting aside  the drive to move the                                                                    
capitol  and sit  quietly as  a parent  & member  of all  of                                                                    
Alaska.  The challenge rests  with the leadership to address                                                                    
needs in the rural communities  throughout the State.  HB 54                                                                    
would  take the  State  off  the course  of  helping all  of                                                                    
Alaska.                                                                                                                         
                                                                                                                                
4:47:05 PM                                                                                                                    
                                                                                                                                
PAUL  KENDALL,  ANCHORAGE  (Testified  via  teleconference),                                                                    
requested  that his  concern be  addressed with  the obvious                                                                    
problems  for everyone.   He  emphasized that  technology is                                                                    
not the  answer &  that access  should not  be divided.   He                                                                    
pointed out  that the 15% of  the population in Juneau  is a                                                                    
small  microcosm  of  the entire  State's  population.    He                                                                    
claimed  that the  State has  taken care  of Juneau  for too                                                                    
many  years,  which  he  believes   is  a   self  indulgent                                                                     
community.   He  attempted to  contain his  discontent.   He                                                                    
stated that Juneau does not  have the dignity to satisfy the                                                                    
statewide needs  for accessibility.   Mr.  Kendall continued                                                                    
testimony in support of moving  the capitol out of Juneau to                                                                    
an Anchorage  area, which he  maintains has over 85%  of the                                                                    
State's population.                                                                                                             
                                                                                                                                
4:54:46 PM                                                                                                                    
                                                                                                                                
PUBLIC TESTIMONY CLOSED                                                                                                         
                                                                                                                                
HB 54 was HELD in Committee.                                                                                                    
                                                                                                                                
                                                                                                                                
RECESSED:      4:57:11 PM          March 11, 2008                                                                             
RECONVENED:    11:53:19 AM    March 12, 2008                                                                                  
                                                                                                                                
11:53:55 AM                                                                                                                   
                                                                                                                                
CS FOR SENATE BILL NO. 256(FIN) am(efd fld)                                                                                   
                                                                                                                                
     An  Act  making  supplemental  appropriations,  capital                                                                    
     appropriations,      expropriations,     and      other                                                                    
     appropriations; making  an appropriation to  the senior                                                                    
     benefits    payment     program;    amending    certain                                                                    
     appropriations;  ratifying  certain  expenditures;  and                                                                    
     making appropriations to capitalize funds.                                                                                 
                                                                                                                                
Co-Chair Meyer MOVED to ADOPT  work draft 25-GS2009\W, Kane,                                                                    
3/10/08 as  the version  of the  bill before  the Committee.                                                                    
There being NO OBJECTION, it was adopted.                                                                                       
                                                                                                                                
11:54:54 AM                                                                                                                   
                                                                                                                                
SHARON  KELLY, STAFF,  REPRESENTATIVE MIKE  CHENAULT, stated                                                                    
that the  House draft  contains $4.415 billion  general fund                                                                    
dollars, a  reduction of $5.313  million dollars  in federal                                                                    
funds  and  a reduction  of  $40.868  million dollars  other                                                                    
funds.                                                                                                                          
                                                                                                                                
11:56:05 AM                                                                                                                   
                                                                                                                                
Ms.  Kelly   pointed  out  the  two   packets  of  available                                                                    
information, one  labeled Total  House changes,  including a                                                                  
summary  sheet  of the  bill  and  changes from  Sec.  1-32,                                                                    
excluding Sec.  13-15.  There  is a separate  packet showing                                                                    
Sec. 13-15.  (Copies on File).                                                                                                  
                                                                                                                                
There  are five  changes  to the  operating  section of  the                                                                    
bill.                                                                                                                           
                                                                                                                                
   •    Sec. 1-3    Salary contract funding.  The draft                                                                       
        adds  appropriations  to   cover  the   Non  Covered                                                                    
        employees in the Executive, Judicial and Legislative                                                                    
        branches.  Those increases are normally  tied to the                                                                    
        Supervisory Unit.   The  increased amount  to $9.986                                                                    
        million general fund dollars.                                                                                           
   •    Sec. 4-6    Enterprise Technology Services (ETS)                                                                      
        adjustments, no changes were made in the work draft.                                                                    
   •    Sec. 7-9     The House draft adds:                                                                                    
        (A)  - Department  of  Revenue  adds  $100  thousand                                                                    
             dollars for  implementation of  HB  2001.   The                                                                    
             Department's  requested   amount  was   reduced                                                                    
             because the master auditors have not been hired                                                                    
             yet.                                                                                                               
        (B)  Department   of   Transportation   and   Public                                                                    
             Facilities requested dollars to cover increased                                                                    
             fuel utilities, lease and commodity costs.  The                                                                    
             funding amount was $1.875 million dollars.                                                                         
        (C)  Department   of   Transportation   and   Public                                                                    
             Facilities requested $393.9 thousand dollars to                                                                    
             cover arbitration settlements.                                                                                     
        (D)  University  of  Alaska  was  funded  at  $1.390                                                                    
             million dollars to cover  increased fuel costs.                                                                    
             The University requested general funds to cover                                                                    
             100% of fuel increases,  however, the increment                                                                    
             funds  60%  of  the  amount  requested  in  the                                                                    
             supplemental and funds  80% of the  fuel costs.                                                                    
             The FY09 funding requests will fund fuel at the                                                                    
             appropriate  ratio  between  General  Fund  and                                                                    
             other University fund sources.                                                                                     
                                                                                                                                
11:57:46 AM                                                                                                                   
                                                                                                                                
Representative   Kelly  questioned   the  numbers   used  to                                                                    
determine  University fuel  costs.   Ms. Kelly  advised they                                                                    
are  about   $1  million  dollars  short   on  the  request.                                                                    
Representative Kelly  asked if that was  the final decision.                                                                    
Ms.  Kelly explained  that was  the determination;  however,                                                                    
there are other supplemental items  coming up in the capital                                                                    
budget.                                                                                                                         
                                                                                                                                
11:59:24 AM                                                                                                                   
                                                                                                                                
PETE ECKLUND, STAFF, REPRESENTATIVE KEVIN MEYER, addressed                                                                      
the capital portions of the bill.                                                                                               
                                                                                                                                
   •    Sec. 10-12 A $1.1 million dollar addition to                                                                          
        Department  of  Commerce,  Community   and  Economic                                                                    
        Development for climate  change grants  ranging from                                                                    
        $50-$100 thousand dollars  to help  communities plan                                                                    
        for erosion problems.                                                                                                   
   •    A similar request for $230 thousand dollars was made                                                                  
        by Department of Environmental  Conservation to help                                                                    
        fund the  Governor's  climate  sub-cabinet,  created                                                                    
        through an  executive  order  (EO).   The  House  is                                                                    
        working with the  Senate to  have them  include $184                                                                    
        thousand dollars to be  added to the  operating bill                                                                    
        as a one time item.                                                                                                     
                                                                                                                                
12:00:12 PM                                                                                                                   
                                                                                                                                
Mr. Ecklund  continued the  overview of  capital items.   He                                                                    
explained  that  Co-Chair  Meyer's   office  went  over  the                                                                    
criteria and  guidelines the Governor used  to determine the                                                                    
vetoes  made in  last year's  capital budget  from a  letter                                                                    
dated 2/8/08.  All items were  reviewed from that veto.  The                                                                    
office  attempted  to  be  as   consistent  as  possible  in                                                                    
applying the  guidelines to the  vetoed projects.   A narrow                                                                    
and conservative view was taken  on the projects being added                                                                    
to the  draft to guarantee  that they met  those guidelines.                                                                    
He admitted the exercise was subjective.                                                                                        
                                                                                                                                
Mr. Ecklund  continued.  All  House members were  invited to                                                                    
discuss  projects in  their  districts &  how  they met  the                                                                    
Governor's guidelines.   Some  project titles  were slightly                                                                    
modified  &  changed  the   recipients  of  school  district                                                                    
projects.   Some  dollar amounts  were modified  downward as                                                                    
appropriate.  From that point,  the committee substitute was                                                                    
drafted.                                                                                                                        
                                                                                                                                
The  total added  by the  House is  $69.227 million  general                                                                    
fund dollars and $750 thousand federal funds.                                                                                   
                                                                                                                                
12:02:54 PM                                                                                                                   
                                                                                                                                
Mr.  Ecklund  pointed  out additional  funds  added  to  the                                                                    
following departments:                                                                                                          
                                                                                                                                
   •    Department     of     Environmental     Conservation                                                                  
        reappropriation requested by the Governor for $17.19                                                                    
        million dollars for village safe water funds.  A new                                                                    
        account was established, sweeping  the General Fund,                                                                    
        federal  funds  and   the  Alaska   Housing  Finance                                                                    
        Corporation (AHFC)  funds  from  projects that  have                                                                    
        been completed or cancelled.     The Department will                                                                    
        use  the  following  method  to  redistribute  those                                                                    
        funds, with  previously  legislatively  appropriated                                                                    
        projects, with no change in scope.   The oldest came                                                                    
      first & prioritized in the same year as before.                                                                           
   •    The effective dates have been added back into the                                                                     
        bill in Sec. 36-38.                                                                                                     
                                                                                                                                
12:03:42 PM                                                                                                                   
                                                                                                                                
Representative  Gara  summarized  that  the  capital  budget                                                                    
items listed  in the proposed  budget total  $69.977 million                                                                    
dollars.  He asked how much  more that amounted to from what                                                                    
the Senate  had proposed.   Mr. Ecklund replied that  it was                                                                    
$17.5 million dollars higher than the Senate number.                                                                            
                                                                                                                                
Representative Gara  inquired if  that information  had been                                                                    
listed in  the packet.   Mr. Ecklund stated in  was included                                                                    
in the distributed handout.  (Copies on File).                                                                                  
                                                                                                                                
Representative  Gara  asked  if  there  was  a  list.    Mr.                                                                    
Ecklund  explained that  the packet  contains three  various                                                                    
scenarios.   The information  sought by  Representative Gara                                                                    
is  contained in  the "House  Changes" material,  indicating                                                                    
all projects added by the House.                                                                                                
                                                                                                                                
12:04:31 PM                                                                                                                   
                                                                                                                                
Co-Chair  Meyer noted  through Page  14, includes  the House                                                                    
additions; after Page 14 are House & Senate combined.                                                                           
                                                                                                                                
Representative Gara asked if there  was a comparison between                                                                    
what  the Senate  proposed and  that of  the Governor.   Mr.                                                                    
Ecklund advised  that the  Governor did  not propose  any of                                                                    
the listed  items.  Discussion followed  between Mr. Ecklund                                                                    
and Representative Gara regarding the crafted projects.                                                                         
                                                                                                                                
12:06:15 PM                                                                                                                   
                                                                                                                                
Co-Chair  Meyer  clarified the  approach  taken.   The  only                                                                    
items being reconsidered in those  sections are items vetoed                                                                    
by the Governor  last year.  Last year,  the Governor vetoed                                                                    
about $200 million dollars of  projects.  Of that, the major                                                                    
portion was from  the Rail belt Energy Fund monies.   Of the                                                                    
$69  million,  $50 million  were  projects  vetoed that  the                                                                    
Senate  also   supports  reconsideration  of.     The  House                                                                    
determined other  projects not  included by the  Senate, but                                                                    
still meting the Governor's guidelines.   The House proposed                                                                    
draft does include those items.                                                                                                 
                                                                                                                                
12:07:51 PM                                                                                                                   
                                                                                                                                
PUBLIC TESTIMONY CLOSED                                                                                                         
                                                                                                                                
12:08:32 PM                                                                                                                   
                                                                                                                                
Representative Gara  discussed inclusion of the  $10 million                                                                    
dollar port  expansion project.   He  asked how  that number                                                                    
had been  determined.  Co-Chair  Meyer noted the  amount had                                                                    
been submitted  by the Municipality  of Anchorage  (MOA) and                                                                    
that  it had  been vetoed  last year  by the  Governor.   He                                                                    
emphasized the  importance of the  Port of Anchorage  to the                                                                    
entire  State,  pointing out  that  80%  of the  goods  sold                                                                    
throughout Alaska  come through  the port.   The  program is                                                                    
matched through the  federal government.  The  port needs to                                                                    
be prepared in order to be  able to address the pipe for the                                                                    
Gas Pipeline.                                                                                                                   
                                                                                                                                
Representative Gara  reiterated how the specific  amount had                                                                    
been determined.   He  pointed out that  there have  been no                                                                    
hearings  since the  project  was vetoed.    He requested  a                                                                    
determination  of the  actual amount  before it  is awarded.                                                                    
Co-Chair Meyer  reiterated it would  be a  federally matched                                                                    
option.  He  had faith that Mayor Beguich  and the Anchorage                                                                    
Assembly had  placed the item  as their  #1 priority.   He e                                                                    
did not question  the request.  The project  is important to                                                                    
the entire State.                                                                                                               
                                                                                                                                
12:11:52 PM                                                                                                                   
                                                                                                                                
Vice-Chair Stoltze  recalled that after the  veto, the Mayor                                                                    
commented that the funding is  a critical part of supporting                                                                    
the war  effort & our  national security.  The  port project                                                                    
was   ratified in agreement  and was included in  the Senate                                                                    
approach.                                                                                                                       
                                                                                                                                
12:13:11 PM                                                                                                                   
                                                                                                                                
Representative  Gara reiterated  the question  regarding the                                                                    
correct funding  amount for the  port project.   He realized                                                                    
the port  is an important  project; however, there  has been                                                                    
no  analysis that  the $10  million dollars  is the  correct                                                                    
amount.   He voiced  concern when  comparing that  number to                                                                    
other necessary State funding projects.                                                                                         
                                                                                                                                
Co-Chair Meyer  argued that  an email had  been sent  to all                                                                    
member's  for submitting  their considerations  of important                                                                    
issues.   He stipulated  that the  concern should  have been                                                                    
discussed last week.                                                                                                            
                                                                                                                                
Representative Gara  maintained that  budget issues  must be                                                                    
discussed  publically  rather  than  inside  the  Chairman's                                                                    
office.  Co-Chair Meyer fully  supported the request by MOA,                                                                    
emphasizing that  the issue  has had  public hearings.   All                                                                    
the office  meetings had been scheduled  to review projects.                                                                    
He  elaborated   that  the  Committee  should   not  now  be                                                                    
dissecting this issue.   He did not want to  see the process                                                                    
held  up.   He  added  the  blue  book, distributed  to  all                                                                    
members's,  highlights  all  the   detailed  items  for  the                                                                    
Anchorage projects.                                                                                                             
                                                                                                                                
12:15:59 PM                                                                                                                   
                                                                                                                                
Representative Gara ascertained that  the requested item had                                                                    
not shown  up in any  public forum  this year; he  wanted to                                                                    
see  a  hearing  on  the  issue.   The  item  had  not  been                                                                    
presented  in  a House  Finance  Committee  bill or  meeting                                                                    
until today.   He realized that it is a  priority of MOA and                                                                    
that he does support the project.   He pointed out that when                                                                    
he requests  money for projects, they  are analyzed closely,                                                                    
and he maintained  that all project requests  should also be                                                                    
as closely considered.                                                                                                          
                                                                                                                                
12:17:26 PM                                                                                                                   
                                                                                                                                
KAREN REHFELD,  DIRECTOR, OFFICE  OF MANAGEMENT  AND BUDGET,                                                                    
noted  that  there  are  many  pieces  to  the  supplemental                                                                    
program,  particularly  the   Senior  Benefits  Program  and                                                                    
requested  by the  Administration  for early  consideration.                                                                    
She indicated the Administration's  concern with last year's                                                                    
vetoed projects  being included  in the  current bill.   The                                                                    
Administration has  attempted to  work diligently  with both                                                                    
bodies  to come  up with  an overall  spending plan  for the                                                                    
next two fiscal years.                                                                                                          
                                                                                                                                
Ms. Rehfeld understood the  legislative frustration with the                                                                    
Governor's   vetoes  last   summer   and   hoped  that   the                                                                    
Legislature  and   the  Governor  could  continue   to  work                                                                    
together on determining an overall level of spending.                                                                           
                                                                                                                                
Co-Chair Chenault noted the  Legislature has been attempting                                                                    
to  work with  the Administration  and will  continue to  do                                                                    
that through the process.                                                                                                       
                                                                                                                                
12:19:33 PM                                                                                                                   
                                                                                                                                
Representative Gara  inquired if  each project had  been run                                                                    
individually  through the  Governor's Office.   Ms.  Rehfeld                                                                    
responded   that  the   Administration  had   not  addressed                                                                    
specifics of  any project &  whether or not they  would meet                                                                    
the Governor's  criteria.  The Administration  is attempting                                                                    
to determine  the appropriate  level of  spending &  if that                                                                    
can be agreed  upon, they realize there will  be changes and                                                                    
additions to the  Governor's proposed budget.   She hoped to                                                                    
come to agreement on the overall  size of the budget and not                                                                    
the individual projects.                                                                                                        
                                                                                                                                
Representative Gara addressed  identifying the overall level                                                                    
of spending and how much  the Governor would accept in terms                                                                    
of the extra  capital projects.  Ms.  Rehfeld responded that                                                                    
there has  been no  discussion about specific  dollar amount                                                                    
of legislative  discretionary projects.  She  maintained the                                                                    
need to determine an overall budget target.                                                                                     
                                                                                                                                
12:22:08 PM                                                                                                                   
                                                                                                                                
Representative  Gara   asked  if   the  Governor   had  been                                                                    
presented information  on the port expansion  since the veto                                                                    
was made.   Ms.  Rehfeld noted  that the  request originated                                                                    
from  Governor  Sheffield  and  was in  the  amount  of  $20                                                                    
million  dollars a  year, for  five years.   Governor  Palin                                                                    
included  $10 million  general bond  dollar proposal  in the                                                                    
FY09  budget.   She  did  not know  if  the Legislature  had                                                                    
determined from where to take the funding.                                                                                      
                                                                                                                                
12:23:25 PM                                                                                                                   
                                                                                                                                
Representative  Nelson  noted   she  supports  the  proposed                                                                    
supplemental bill,  which she believes is  appropriate.  The                                                                    
bill  includes  a large  amount  of  money for  the  Revenue                                                                    
Sharing Program,  the weatherization  program and  money for                                                                    
the  heros   list  to those  communities  needing  to  cover                                                                    
increased  retirement costs.   The  vetoed capital  projects                                                                    
from   last    year's   budget   were    unanticipated   and                                                                    
consequently, the proposed  supplemental is an unanticipated                                                                    
budget dealing  with unforeseen costs  and disasters.   Many                                                                    
communities have  bedded the recommendations  out, including                                                                    
public  hearings, prioritizing  their requests.   She  added                                                                    
that  for many  of  the  projects, time  is  of the  essence                                                                    
especially for those in remote Alaska.                                                                                          
                                                                                                                                
Representative Nelson added  that the current Administration                                                                    
is on  of the most  powerful by Constitution in  the Nation.                                                                    
Currently,  the  Legislature  is  in a  90-day  session  and                                                                    
constitutionally,  the  Legislature   is  the  appropriating                                                                    
body.   The  Legislature recognizes  that there  is a  large                                                                    
surplus  and that  the State  has a  lot of  unmet needs  in                                                                    
terms  of major  maintenance and  capital projects.   It  is                                                                    
appropriate  to  spend some  of  that  money for  the  life,                                                                    
health, education  and safety needs  within the State.   She                                                                    
reiterated her support for the proposed bill.                                                                                   
                                                                                                                                
12:26:36 PM                                                                                                                   
                                                                                                                                
Representative  Hawker addressed  the  changes  made in  the                                                                    
Senate version  adding $3.6 billion dollars  into the budget                                                                    
reserve  accounts.    He asked  if  the  Administration  was                                                                    
supportive  of  those  appropriations  into  savings.    Ms.                                                                    
Rehfeld commented that the Governor  is comfortable with the                                                                    
idea of  saving.   The CBR  is an  important element  to any                                                                    
savings  plan.   The Governor  proposed last  year that  the                                                                    
entire surplus go into the  CBR; however, there is a broader                                                                    
issue with the  addition of many significant  pieces.  There                                                                    
exists a lot of dynamics within the legislation.                                                                                
                                                                                                                                
12:28:42 PM                                                                                                                   
                                                                                                                                
In response to Representative  Hawker, Ms. Rehfeld clarified                                                                    
that the $2.6  billion dollar appropriation into  the CBR is                                                                    
an area  she believed the  Governor would be  supportive of.                                                                    
They  had not  discussed  the use  of  the Statutory  Budget                                                                    
Reserve.                                                                                                                        
                                                                                                                                
Representative  Hawker inquired  about the  Administration's                                                                    
position  on the  $300 million  dollar appropriation  to the                                                                    
Weatherization  Program   through  Alaska   Housing  Finance                                                                    
Corporation.   Ms. Rehfeld  advised that  the Administration                                                                    
has   had   conversations   with  Alaska   Housing   Finance                                                                    
Corporation and  that there is  a great deal of  support for                                                                    
increasing funding available for  those programs.  She could                                                                    
not guarantee that  $300 million dollars is  the number that                                                                    
the Governor would support.                                                                                                     
                                                                                                                                
12:31:04 PM                                                                                                                   
                                                                                                                                
Representative Kelly noted that  the combination of the $300                                                                    
million weatherization  in addition  to the  annuity revenue                                                                    
sharing, brings  the State close  to ½ billion dollars.   He                                                                    
asked if  the Administration  would prefer that  the savings                                                                    
be  increased by  that amount.   Ms.  Rehfeld clarified  the                                                                    
need for  a "bigger picture  discussion".  Energy is  one of                                                                    
the  big  considerations including  the  Energy  Fund and  a                                                                    
funding  source  for Revenue  Sharing.    The Governor  does                                                                    
support the  pieces of  the bill, but  wants to  address the                                                                    
overall procedure.                                                                                                              
                                                                                                                                
12:32:58 PM                                                                                                                   
                                                                                                                                
Co-Chair Meyer  agreed with comments made  by Representative                                                                    
Nelson  that  the  supplemental  request  is  large  @  $4.3                                                                    
billion dollars,  noting that  the key  is the  $3.6 billion                                                                    
dollars appointed  for savings.   He  added that  last year,                                                                    
when the capital  items were vetoed, the State  did not have                                                                    
the extra oil tax dollars.   The State now is in a different                                                                    
environment.                                                                                                                    
                                                                                                                                
Representative   Thomas   echoed   the  comments   made   by                                                                    
Representative  Nelson.   He  identified  the surplus  money                                                                    
available to  the State.  He  reiterated the inconsistencies                                                                    
where vetoes  were made last  year.   The State is  ahead of                                                                    
revenue expectations.                                                                                                           
                                                                                                                                
12:36:28 PM                                                                                                                   
                                                                                                                                
Representative Nelson understood that  the proposal is large                                                                    
and  that   the  State   is  constitutionally   required  to                                                                    
reimburse  the CBR.   In  previous  comments, she  expressed                                                                    
that the  Legislative Branch is the  appropriating body; she                                                                    
hoped that the  two bodies could get  past the disagreements                                                                    
and be  non-adversarial.  The  House has been the  Body that                                                                    
takes a more temperate approach to resolving conflicts.                                                                         
                                                                                                                                
12:37:40 PM                                                                                                                   
                                                                                                                                
Representative  Gara agreed  that  there  are projects  that                                                                    
meet  the  health  and  safety   guidelines  issued  by  the                                                                    
Governor,  but  that  there  are  some  that  do  not.    He                                                                    
maintained that  there is  a disconnect  in the  budget when                                                                    
not funding  certain operating budget  items and  then over-                                                                    
funding  in the  capital  budget.   He  maintained that  the                                                                    
decisions  are  a  matter of  leadership,  emphasizing  that                                                                    
there are  important projects in  the State that do  not get                                                                    
funded.  He urged that priorities be ranked.                                                                                    
                                                                                                                                
12:39:15 PM                                                                                                                   
                                                                                                                                
Representative Nelson MOVED to  ADOPT Amendment 1.  Co-Chair                                                                    
Chenault OBJECTED.                                                                                                              
                                                                                                                                
     Agency:   Department   of   Commerce,   Community   and                                                                    
    Economic Development Municipal Grants AS 37.05.315                                                                          
                                                                                                                                
     Project: Platinum Solid Waste Landfill Design & Build                                                                      
                                                                                                                                
     Amount:   $732,000                                                                                                         
                                                                                                                                
     Funding Source:          General Funds                                                                                     
                                                                                                                                
Representative   Nelson  noted   that   the  Department   of                                                                    
Commerce,  Community and  Economic  Development, Project  of                                                                    
Platinum  Solid Waste  landfill design  and build  (HD38) in                                                                    
the  amount of  $732  thousand general  fund  dollars.   She                                                                    
explained that the new landfill  is needed to serve both the                                                                    
community and  the new $30 million  seafood processing plant                                                                    
that  coastal Villages  Region Fund  (CVRF)  is building  in                                                                    
Platinum  construction of  the  plant  is already  underway,                                                                    
with the facility for 126  processing employees completed in                                                                    
2007.   The new plant is  expected to open for  operation in                                                                    
2009.  The  plant is largest capital project  in the 15-year                                                                    
history of  the Western  Alaska community  Development Quota                                                                    
(CDQ) Program, funded entirely by CVRF.                                                                                         
                                                                                                                                
Representative Nelson WITHDREW Amendment 1.                                                                                     
                                                                                                                                
Co-Chair  Chenault  realized  that  the issue  needs  to  be                                                                    
addressed as  it provides an  opportunity for jobs  in rural                                                                    
Alaska.  He offered to  continue to work with Representative                                                                    
Nelson.                                                                                                                         
                                                                                                                                
12:41:27 PM                                                                                                                   
                                                                                                                                
Representative Nelson MOVED to  ADOPT Amendment 2.  Co-Chair                                                                    
Chenault OBJECTED.                                                                                                              
                                                                                                                                
Representative Nelson explained the amendment.                                                                                  
                                                                                                                                
Co-Chair Chenault  pointed out  that there  are a  number of                                                                    
communities  that are  having  similar  problems; there  are                                                                    
discussions  happening  with  the  Corps  of  Engineers  for                                                                    
federal   funding.      He  noted   he   is   working   with                                                                    
Representative Joule at this time.                                                                                              
                                                                                                                                
Representative  Harris  agreed that  the  bill  was not  the                                                                    
appropriate  vehicle  for  addressing   the  problem.    The                                                                    
Legislature has  attempted to deal  with the  erosion issues                                                                    
for quite  a period of  time.  He  stated that the  Corps of                                                                    
Engineers is putting  the project out to bid  and is looking                                                                    
for matching  funds.   Evacuation of  the areas  will happen                                                                    
sooner or  later.  He  recommended inclusion of  the concern                                                                    
in the capital budget.                                                                                                          
                                                                                                                                
Representative  Nelson stated  that  recognizing the  strong                                                                    
sense  of   cooperation  and  the  money   placed  into  the                                                                    
supplemental  for  Department  of  Commerce,  Community  and                                                                    
Economic Development grant, she WITHDREW Amendment 2.                                                                           
                                                                                                                                
12:46:10 PM                                                                                                                   
                                                                                                                                
Representative  Crawford MOVED  to  ADOPT  Amendment 3,  25-                                                                    
GS2009\VA.1, Kane, 3/11/08.  Co-Chair Chenault OBJECTED.                                                                        
                                                                                                                                
Representative  Crawford explained  the  amendment would  do                                                                    
away with the appropriation  to the Statutory Budget Reserve                                                                    
and  places  it  instead   into  the  Constitutional  Budget                                                                    
Reserve (CBR).                                                                                                                  
                                                                                                                                
12:48:56 PM                                                                                                                   
                                                                                                                                
Representative   Crawford  read   from   the  statute   that                                                                    
establishes the budget reserve fund:                                                                                            
                                                                                                                                
     "There  is established  as a  separate fund,  the State                                                                    
     treasury, the budget reserve fund.   The budget reserve                                                                    
     fund  consists of  appropriations  to  the fund,  money                                                                    
     received  by   the  State  that   is  subject   to  the                                                                    
     appropriation  limit  under  (b) of  this  section  and                                                                    
     exceeds that  limit may be  appropriated to  the budget                                                                    
     reserve fund."                                                                                                             
                                                                                                                                
Representative  Crawford maintained  that  the proper  place                                                                    
for those funds  is the CBR and encouraged  that the dollars                                                                    
be  placed  into that  fund.    Additionally, he  added  his                                                                    
support  to  the   legislation  proposed  by  Representative                                                                    
Samuels.                                                                                                                        
                                                                                                                                
Co-Chair  Chenault clarified  that it  has been  proposed to                                                                    
place  the  $1 billion  dollars  into  the Statutory  Budget                                                                    
Reserve  and  $2.6  billion  dollars  in to  the  CBR.    He                                                                    
maintained that any dollars not  spent through the budgeting                                                                    
process   are    true   savings.       He   understood   the                                                                    
complications of withdrawing  money from the CBR  with the ¾                                                                    
voting  system.    He  stated that  there  are  two  savings                                                                    
accounts within the  CBR; one short term and  one long term,                                                                    
which allows the opportunity to  look further forward in the                                                                    
budget process.  Co-Chair  Chenault maintained his OBJECTION                                                                    
to Amendment 3.                                                                                                                 
                                                                                                                                
12:54:54 PM                                                                                                                   
                                                                                                                                
Representative   Crawford   hoped   there  could   be   more                                                                    
discussion because  of the long  term effect for  the State.                                                                    
He characterized the Statutory  Budget Reserve (SBR) fund as                                                                    
a deferred spending account.   He emphasized that the CBR is                                                                    
a fund that  is better thought-out in how  to administer the                                                                    
fund.  Only  taking 25% a year is problematic.   He asked if                                                                    
the fund would continue infinitely.                                                                                             
                                                                                                                                
Co-Chair  Chenault pointed  out that  if the  Legislature is                                                                    
only able  to withdraw 25% of  the SBR in one  year, perhaps                                                                    
the entire amount  should be placed into  that fund, because                                                                    
if left in the CBR, 100% can be accessed in any given year.                                                                     
                                                                                                                                
Representative  Gara advised  that it  does not  matter what                                                                    
the SBR  states, it  is a  statute and no  one can  tell the                                                                    
Legislature  how  to  spend  their money  next  year.    Any                                                                    
account  is only  advisory and  is non-binding.   He  stated                                                                    
that  Amendment 3  is correct,  which proposes  placing $3.6                                                                    
billion dollars into  the CBR, which is where  it would stay                                                                    
because it  could not be  accessed without a  super majority                                                                    
vote.   By  placing those  dollars into  the SBR,  the money                                                                    
could   be  withdrawn   next  year.      He  supported   the                                                                    
recommendation made by Representative Crawford.                                                                                 
                                                                                                                                
12:58:28 PM                                                                                                                   
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR:      Nelson, Crawford, Gara                                                                                           
OPPOSED:       Stoltze,   Thomas,  Harris,   Hawker,  Kelly,                                                                    
               Chenault, Meyer                                                                                                  
                                                                                                                                
Representative Joule was not present for the vote.                                                                              
                                                                                                                                
The MOTION FAILED (3-7).                                                                                                        
                                                                                                                                
12:59:14 PM                                                                                                                   
                                                                                                                                
Representative Gara  MOVED to ADOPT  Amendment 4.   Co-Chair                                                                    
Meyer OBJECTED.                                                                                                                 
                                                                                                                                
Representative  Gara explained  that the  amendment emphasis                                                                    
the previous point made that  there are a lot more important                                                                    
things  that  the  State   could  accomplish  with  directed                                                                    
dollars in  the capital budget.   He pointed out  that there                                                                    
are  48  other  states  that  provide  more  aid  to  people                                                                    
attempting  to get  vocational education  than Alaska  does.                                                                    
Roughly  70% of  Alaska  kids  do not  go  to  college.   He                                                                    
believed that some  of the surplus money should  be used for                                                                    
creating  opportunity instead  of  putting  it into  capital                                                                    
projects.  He maintained that  some of the proposed projects                                                                    
are not public safety, health or education related.                                                                             
                                                                                                                                
The  amendment proposes  deleting $2.5  million dollars  for                                                                    
the Port  of Anchorage  expansion and placing  those dollars                                                                    
into  the Department  of  Education  and Early  Development,                                                                    
Alaska  Postsecondary  Education  Commission,  (new)  Alaska                                                                    
Advantage  Education  grants.    He added  that  the  Alaska                                                                    
Student  Loan   program  provides  a  $2.5   million  dollar                                                                    
dividend  that  should  stay   within  the  corporation  for                                                                    
financial  aid for  Alaska students.    That is  how it  was                                                                    
proposed by  the Governor.   He   pointed out  that Co-Chair                                                                    
Meyer's  maintains those  dollars should  instead be  placed                                                                    
into the Capital budget.                                                                                                        
                                                                                                                                
1:01:14 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer responded  that ASLC dividend as  well as the                                                                    
dividends form  the other  statewide corporations  have been                                                                    
placed  into  the  capital budget  versus  operating  budget                                                                    
because once they  are in the operating  budget, they become                                                                    
ongoing funding  obligations.  The dividend  amounts are not                                                                    
known from year to year &  are typically used in the Capital                                                                    
budget.   Amendment  4 places  them into  the Department  of                                                                    
Education and Early  Development, Alaska Advantage Education                                                                    
grants.  Representative Gara pointed  out that Alaska is the                                                                    
only  state  that  does  not provide  money  to  low  income                                                                    
students.   Co-Chair Meyer  argued that  Alaska is  the only                                                                    
state that pays  a Permanent Fund Dividend  (PFD), which can                                                                    
be  applied  to  State  tuition,  which  [Alaska  University                                                                    
tuition] is in the lower third nationwide.                                                                                      
                                                                                                                                
Co-Chair Meyer  mentioned the  top-ten scholars  program, an                                                                    
incentive  program   not  discriminating   between  economic                                                                    
classes.   He maintained that  keeping the dividends  in the                                                                    
capital budget was appropriate.                                                                                                 
                                                                                                                                
1:03:31 PM                                                                                                                    
                                                                                                                                
Representative Nelson noted that  she supports the intent of                                                                    
the  amendment,   but  maintained  that  the   budget  under                                                                    
consideration is  the supplemental budget  for unanticipated                                                                    
costs of the  State.  She stated  she would be a  no vote on                                                                    
the amendment.                                                                                                                  
                                                                                                                                
Co-Chair  Chenault  noted  that  he had  been  working  with                                                                    
Representative Gara on  the issue.  He pointed  out that 300                                                                    
low income  college students did  receive funding,  which is                                                                    
24%  of the  money spent  in  that program.   The  remaining                                                                    
dollars went to  students over 25 years old.   He noted that                                                                    
his original  intent of  the advantage  program was  for the                                                                    
younger  students, not  those  over  25 years  of  age.   He                                                                    
agreed  that the  program is  worth discussing  and probably                                                                    
worth funding through a different vehicle.                                                                                      
                                                                                                                                
1:06:39 PM                                                                                                                    
                                                                                                                                
Representative  Crawford  agreed  that   both  young  &  old                                                                    
students  need help  in  pursuing  their college  education.                                                                    
Every year there  are students in the  scholars program that                                                                    
have to  drop out because it  only pays the tuition  and not                                                                    
other living  costs.   He concurred that  it is  not correct                                                                    
that  a State  such as  Alaska, does  not do  more than  any                                                                    
other  state in  the Union  for their  student's educational                                                                    
concerns.                                                                                                                       
                                                                                                                                
1:09:08 PM                                                                                                                    
                                                                                                                                
Representative Gara addressed the  dividends coming from the                                                                    
Alaska Student Loan Program, which  have always totaled more                                                                    
than $1  million dollars; that is  not a reason to  place it                                                                    
in the capital  budget every year.  He pointed  out that 90%                                                                    
of the  students that qualified  for the low income  aid did                                                                    
not get it.   There is not the funding  available to provide                                                                    
an  education  option  to  most low  income  students.    He                                                                    
maintained that a $2.5 million  dollars grant dedicated to a                                                                    
specific  class of  students would  be a  great enhancement.                                                                    
He added that  75% of the vocational education  in the State                                                                    
is provided at the University.                                                                                                  
                                                                                                                                
Representative Gara WITHDREW Amendment 4.                                                                                       
                                                                                                                                
                                                                                                                                
AT EASE:       1:11:45 PM                                                                                                     
RECONVENE:          1:12:20 PM                                                                                                
                                                                                                                                
                                                                                                                                
Co-Chair Meyer MOVED to REPORT HCS CS SB 256(FIN) out of                                                                        
Committee with individuals recommendations.  There being NO                                                                     
OBJECTIONS, it was so ordered.                                                                                                  
                                                                                                                                
HCS CS SB 256 (FIN) was reported out of Committee with a                                                                        
"do pass" recommendation.                                                                                                       
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 1:12 P.M.                                                                                          

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