Legislature(2003 - 2004)

05/09/2004 11:13 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                  HOUSE FINANCE COMMITTEE                                                                                       
                        May 09, 2004                                                                                            
                         11:13 A.M.                                                                                             
                                                                                                                                
TAPE HFC 04 - 110, Side A                                                                                                       
TAPE HFC 04 - 110, Side B                                                                                                       
TAPE HFC 04 - 111, Side A                                                                                                       
TAPE HFC 04 - 111, Side B (faulty)                                                                                              
TAPE HFC 04 - 112, Side A                                                                                                       
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Williams called the House  Finance Committee meeting                                                                   
to order at 11:13 A.M.                                                                                                          
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative John Harris, Co-Chair                                                                                            
Representative Bill Williams, Co-Chair                                                                                          
Representative Kevin Meyer, Vice-Chair                                                                                          
Representative Mike Chenault                                                                                                    
Representative Eric Croft                                                                                                       
Representative Hugh Fate                                                                                                        
Representative Richard Foster                                                                                                   
Representative Mike Hawker                                                                                                      
Representative Reggie Joule                                                                                                     
Representative Carl Moses                                                                                                       
Representative Bill Stoltze                                                                                                     
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Representative  Max Gruenberg;  Representative Mary  Kapsner;                                                                   
Representative  Carl   Morgan;  Senator  Lyda   Green;  Traci                                                                   
Carpenter,   Staff,  Senator   Lyda  Green;  Bryan   Butcher,                                                                   
Legislative  Liaison,  Alaska  Housing  Finance  Corporation,                                                                   
Department  of  Revenue,  Anchorage;   Paul  Fuhs,  Lobbyist,                                                                   
Technical  Expert to  Representative  Carl Moses,  Anchorage;                                                                   
Marc Antrim,  Commissioner, Department of  Corrections; Jerry                                                                   
Burnett,   Director,   Administrative    Services   Division,                                                                   
Department of  Corrections; Greg Winegar,  Director, Division                                                                   
of   Investments,   Department   of  Community   &   Economic                                                                   
Development;  Linda Hall, Division  of Insurance,  Department                                                                   
of Community and Economic Development;  Jody Simpson, Member,                                                                   
Mat  Su Borough  Assembly;  Ray Gillespie,  Lobbyist,  Mat-Su                                                                   
Borough; Vern  Jones, Chief  Procurement Officer,  Department                                                                   
of Administration; Jerry Rhinewald,  Lobbyist, Blue Cross and                                                                   
Blue Shield of  Alaska, Juneau; Zack Warwick,  Staff, Senator                                                                   
Gene Therriault                                                                                                                 
                                                                                                                                
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Rick Hohnbaum, City Manager, City of Whittier; Dee Hubbard,                                                                     
Citizen Activist, Sterling                                                                                                      
                                                                                                                                
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 562    An Act relating to the establishment of the                                                                           
          Interior Rivers  Port Authority; and  providing for                                                                   
          an effective date.                                                                                                    
                                                                                                                                
          CS HB 562 (FIN) was reported out of Committee with                                                                    
          a   "do  pass"  recommendation   and  with   a  new                                                                   
          indeterminate  note by the Department  of Community                                                                   
          & Economic Development.                                                                                               
                                                                                                                                
CS SB 65(FIN) am                                                                                                                
          An   Act   relating   to  the   qualifications   of                                                                   
          correctional   officers,   parole   officers,   and                                                                   
          probation  officers; authorizing the  Department of                                                                   
          Corrections   to   enter   into   lease-   purchase                                                                   
          agreements with municipalities  for new or expanded                                                                   
          public  correctional  facilities  in the  Fairbanks                                                                   
          North Star Borough,  the Matanuska-Susitna Borough,                                                                   
          Bethel,  the  Municipality  of Anchorage,  and  the                                                                   
          City  of Seward;  relating to  the development  and                                                                   
          financing   of  privately   operated   correctional                                                                   
          facility   space  and  services;   authorizing  the                                                                   
          Department  of Corrections to  enter into  a lease-                                                                   
          purchase  agreement with the  City of  Whittier for                                                                   
          the confinement and  care of prisoners in privately                                                                   
          operated correctional  facility space if  the state                                                                   
          cannot provide the same  level of services required                                                                   
          in  state law or  regulation for  the same  or less                                                                   
          cost;   giving  notice   of   and  approving,   and                                                                   
          authorizing   the  entry   into  and  issuance   of                                                                   
          certificates  of  participation for,  the  upgrade,                                                                   
          expansion,  and  replacement  of certain  jails  in                                                                   
          Dillingham   and  Kodiak;  and  providing   for  an                                                                   
          effective date.                                                                                                       
                                                                                                                                
          HCS CS  SB 65 (FIN)  was reported out  of Committee                                                                   
          with "individual"  recommendations and  with fiscal                                                                   
         note #2 by the Department of Corrections.                                                                              
                                                                                                                                
CS SB 224(STA)                                                                                                                  
          An  Act relating  to  a minor  operating a  vehicle                                                                   
          after  consuming alcohol,  to a  minor refusing  to                                                                   
          submit  to chemical  tests, and  to driving  during                                                                   
          the  24 hours after  being cited  for one  of those                                                                   
          offenses; and providing for an effective date.                                                                        
                                                                                                                                
          CS SB 224 (STA) was SCHEDULED but not HEARD.                                                                          
                                                                                                                                
CS SB 232(FIN)                                                                                                                  
          An  Act relating  to federal  tax requirements  for                                                                   
          and  other provisions  of the teachers'  retirement                                                                   
          system,  the public  employees' retirement  system,                                                                   
          and  the   judicial  retirement   system;  removing                                                                   
          village  public  safety  officers from  the  public                                                                   
          employees'   retirement  system;  eliminating   the                                                                   
          public  employees'  retirement  system  conditional                                                                   
          duty  to  refund  contributions   under  $1,000  to                                                                   
          inactive  employees;  limiting service  credit  for                                                                   
          village  public  safety   officer  service  in  the                                                                   
          public employees' retirement  system to five years;                                                                   
          and providing for an effective date.                                                                                  
                                                                                                                                
          CS SB 232 (FIN) was SCHEDULED but not HEARD.                                                                          
                                                                                                                                
CS SB 279(FIN)                                                                                                                  
          An Act authorizing and  relating to the issuance of                                                                   
          bonds  by the  Alaska  Housing Finance  Corporation                                                                   
          for  safe  and  clean  water  and  hygienic  sewage                                                                   
          disposal   facility  capital  projects   and  other                                                                   
          capital  projects; providing  for the repayment  of                                                                   
          the bonds and bond costs;  relating to the dividend                                                                   
          paid  to the  state by the  Alaska Housing  Finance                                                                   
          Corporation; and providing for an effective date.                                                                     
                                                                                                                                
          CS SB 279 (FIN) was  reported out of Committee with                                                                   
          "individual" recommendations  and with zero note #3                                                                   
          by the Department of Revenue.                                                                                         
                                                                                                                                
CS SB 302(FIN)                                                                                                                  
          An  Act relating  to the authority  to take  oaths,                                                                   
          affirmations, and acknowledgments  in the state, to                                                                   
          notarizations,       to      verifications,      to                                                                   
          acknowledgments,  to fees for issuing  certificates                                                                   
          with  the  seal  of   the  state  affixed,  and  to                                                                   
          notaries  public; and  providing  for an  effective                                                                   
          date.                                                                                                                 
                                                                                                                                
          CS SB 302 (FIN) was SCHEDULED but not HEARD.                                                                          
                                                                                                                                
CS SB 311(JUD)(efd fld)                                                                                                         
          An  Act   providing  for  a  special   deposit  for                                                                   
          workers'  compensation  insurers;  relating to  the                                                                   
          board   of  governors   of  the  Alaska   Insurance                                                                   
          Guaranty  Association;  stating the  intent of  the                                                                   
          legislature,    and   setting   out    limitations,                                                                   
          concerning  the interpretation,  construction,  and                                                                   
          implementation   of  workers'  compensation   laws;                                                                   
          relating  to  restructuring   the  Alaska  workers'                                                                   
          compensation   system;   eliminating   the   Alaska                                                                   
          Workers'   Compensation   Board;   establishing   a                                                                   
          division   of  workers'  compensation   within  the                                                                   
          Department  of Labor and Workforce  Development and                                                                   
          assigning  certain   Alaska  Workers'  Compensation                                                                   
          Board functions to the  division and the Department                                                                   
          of Labor and Workforce  Development; establishing a                                                                   
          Workers'    Compensation     Appeals    Commission;                                                                   
          assigning certain functions  of the Alaska Workers'                                                                   
          Compensation  Board  to the  Workers'  Compensation                                                                   
          Appeals  Commission and  the Workers'  Compensation                                                                   
          Hearings   Board;  relating   to  agreements   that                                                                   
          discharge    workers'    compensation    liability;                                                                   
          providing for hearing  examiners and hearing panels                                                                   
          in workers'  compensation proceedings;  relating to                                                                   
          workers'   compensation  awards;  relating   to  an                                                                   
          employer's  failure to insure  and keep  insured or                                                                   
          provide   security;  providing  for   appeals  from                                                                   
          compensation    orders;   relating    to   workers'                                                                   
          compensation  proceedings;  providing  for  supreme                                                                   
          court  jurisdiction  of appeals  from the  Workers'                                                                   
          Compensation  Appeals Commission;  providing  for a                                                                   
          maximum  amount for  the cost-of-living  adjustment                                                                   
          for workers'  compensation benefits;  providing for                                                                   
          administrative  penalties  for employers  uninsured                                                                   
          or   without   adequate   security   for   workers'                                                                   
          compensation;  and relating to assigned  risk pools                                                                   
          and insurers.                                                                                                         
                                                                                                                                
          CS  SB  311(JUD)(efd  fld) was  SCHEDULED  but  not                                                                   
          HEARD.                                                                                                                
                                                                                                                                
CS SB 357(FIN)                                                                                                                  
          An  Act relating  to the  regulation of  insurance,                                                                   
          insurance  licenses,  qualifications  of  insurance                                                                   
          producers,  surplus  lines,  fraud  investigations,                                                                   
          electronic   transactions,   and  compliance   with                                                                   
          federal law  and national standards;  and providing                                                                   
          for an effective date.                                                                                                
                                                                                                                                
          HCS CS  SB 357 (FIN) was reported  out of Committee                                                                   
          with a "no recommendation",  a Letter of Intent and                                                                   
          with zero note #1 by  the Department of Community &                                                                   
          Economic Development.                                                                                                 
                                                                                                                                
CS SB 364(HES)(EFD FLD)                                                                                                         
          An  Act  relating  to  liability  for  expenses  of                                                                   
          placement in certain  mental health facilities; and                                                                   
          relating to the mental  health treatment assistance                                                                   
          program.                                                                                                              
                                                                                                                                
          CS SB 364 (FIN) was SCHEDULED but not HEARD.                                                                          
                                                                                                                                
CS SB 368(FIN) am                                                                                                               
          An Act relating to taxes  on cigarettes and tobacco                                                                   
          products,   to  tax   stamps   on  cigarettes,   to                                                                   
          forfeiture  of cigarettes and  of property  used in                                                                   
          the   manufacture,  transportation,   or  sale   of                                                                   
          unstamped   cigarettes,   and   to   licenses   and                                                                   
          licensees   under  the   Cigarette  Tax   Act;  and                                                                   
          providing for an effective date.                                                                                      
                                                                                                                                
          CS SB 368(FIN) am was SCHEDULED but not HEARD.                                                                        
                                                                                                                                
SB 387    An Act authorizing the making of certain                                                                              
          commercial  fishing  loans  to  eligible  community                                                                   
          quota entities for the  purchase of certain fishing                                                                   
          quota shares; and providing  for an effective date.                                                                   
                                                                                                                                
          SB 387am was reported out of Committee with a "do                                                                     
          pass" recommendation  and with zero note  #1 by the                                                                   
          Department of Community  & Economic Development and                                                                   
          zero note #2 by the Department of Fish & Game.                                                                        
                                                                                                                                
SB 392    An Act relating to the expenses of investigation,                                                                     
          hearing, or  public advocacy before  the Regulatory                                                                   
          Commission   of  Alaska,  to  calculation   of  the                                                                   
          regulatory  cost charge  for  public utilities  and                                                                   
          pipeline  carriers  to  include the  Department  of                                                                   
          Law's  costs of  its public  advocacy function,  to                                                                   
          inspection  of  certain books  and  records by  the                                                                   
          attorney general  when participating as  a party in                                                                   
          a  matter  before  the   Regulatory  Commission  of                                                                   
          Alaska; and providing for an effective date.                                                                          
                                                                                                                                
          SB 392 was SCHEDULED but not HEARD.                                                                                   
                                                                                                                                
CS SB 395(FIN) am                                                                                                               
          An Act authorizing the  Alaska Railroad Corporation                                                                   
          to extend  its rail  line to Fort Greeley,  Alaska,                                                                   
          and  relating to  that  extension; authorizing  the                                                                   
          corporation  to issue bonds to finance  the cost of                                                                   
          the   extension   and  necessary   facilities   and                                                                   
          equipment;  relating   to  the  Railroad  Planning,                                                                   
          Platting, and  Land Use Regulation Task  Force; and                                                                   
          providing for an effective date.                                                                                      
                                                                                                                                
          CS SB 395 (FIN)am was HEARD and HELD in Committee                                                                     
          for further consideration.                                                                                            
                                                                                                                                
CS FOR SENATE BILL NO. 65(FIN) am                                                                                             
                                                                                                                                
     An Act  relating to  the qualifications of  correctional                                                                   
     officers,  parole  officers,   and  probation  officers;                                                                   
     authorizing the Department  of Corrections to enter into                                                                   
     lease- purchase  agreements with municipalities  for new                                                                   
     or  expanded  public  correctional   facilities  in  the                                                                   
     Fairbanks  North  Star  Borough,  the  Matanuska-Susitna                                                                   
     Borough, Bethel, the Municipality  of Anchorage, and the                                                                   
     City  of   Seward;  relating  to  the   development  and                                                                   
     financing  of privately  operated correctional  facility                                                                   
     space  and  services;  authorizing   the  Department  of                                                                   
     Corrections  to enter  into  a lease-purchase  agreement                                                                   
     with the City  of Whittier for the confinement  and care                                                                   
     of   prisoners   in  privately   operated   correctional                                                                   
     facility  space if  the state  cannot  provide the  same                                                                   
     level of  services required  in state law  or regulation                                                                   
     for  the  same  or  less  cost;  giving  notice  of  and                                                                   
     approving, and  authorizing the entry into  and issuance                                                                   
     of  certificates  of  participation  for,  the  upgrade,                                                                   
     expansion,   and  replacement   of   certain  jails   in                                                                   
     Dillingham  and Kodiak; and  providing for an  effective                                                                   
     date.                                                                                                                      
                                                                                                                                
SENATOR  LYDA  GREEN,  SPONSOR,   explained  that  the  State                                                                   
suffers from overcrowding in statewide  prison facilities and                                                                   
that Alaska  needs a  responsible solution  to address  these                                                                   
serious   issues,   which  arise   from   the   overcrowding,                                                                   
deteriorating  physical  plants  and  anticipated  growth  in                                                                   
prisoner  populations.   SB 65 is  the resulting  legislation                                                                   
from numerous conversations, revealing  a need for compromise                                                                   
in  order to  pass  a comprehensive,  long-term  correctional                                                                   
facility plan  that adequately addresses public  safety.  The                                                                   
bill would:                                                                                                                     
                                                                                                                                
   ·    Ensure local involvement in the process and                                                                             
        guarantees open and fair competition;                                                                                   
   ·    Creates a level playing field between the public and                                                                    
        private sectors; and                                                                                                    
   ·    Requires the use of the State procurement process, a                                                                    
        feasibility study, and approval of facility designs                                                                     
        by   the   Commissioner   of   the    Department   of                                                                   
        Corrections.                                                                                                            
                                                                                                                                
Senator  Green   believed  that  the  end  result   would  be                                                                   
consistency  in  facility design  and  operation.   The  bill                                                                   
additionally, allows  the State of Alaska to  bring prisoners                                                                   
back  from  Arizona,  directing  that money  into  the  State                                                                   
economy.                                                                                                                        
                                                                                                                                
Senator Green provided a sectional analysis of the bill.                                                                        
                                                                                                                                
Co-Chair  Harris inquired  if the fiscal  note cost  included                                                                   
bringing  prisoners   back  from  Arizona.     Senator  Green                                                                   
acknowledged that  it did and requested her  staff to address                                                                   
the  concern.   She  advised that  the  Department of  Public                                                                   
Safety would be transporting the  prisoners across the State.                                                                   
She  added  that  there  would  be  an  increase  as  numbers                                                                   
continue to rise with the current trend continuing.                                                                             
                                                                                                                                
Co-Chair Harris pointed  out that the bill indicates  a "cost                                                                   
not  to exceed"  $14,600 dollars  per  year, per  bed in  the                                                                   
Fairbanks  and Mat-Su  areas.   He asked  the current  yearly                                                                   
costs for incarcerating the Arizona prisoners.                                                                                  
                                                                                                                                
TRACI CARPENTER,  STAFF, SENATOR LYDA GREEN,  stated that the                                                                   
current total  amount is $14.154  million dollars for  out of                                                                   
state  contracts.     Senator  Green  interjected   that  the                                                                   
calculations  could be  "no  more than"  as  included in  the                                                                   
note.   The  costs  have been  calculated  over  the past  15                                                                   
years.   Ms. Carpenter added  that the language  indicates 25                                                                   
years,  but for  purposes  of  calculation, the  fiscal  note                                                                   
allows for 15 years.  Senator  Green added that at the end of                                                                   
the  15-year period,  the bed  space could  not exceed  $14.6                                                                   
million dollars.                                                                                                                
                                                                                                                                
Co-Chair Harris  understood that the bill would  allow listed                                                                   
communities  such  as  Seward  and Anchorage  and  a  federal                                                                   
issue, Bethel,  Mat-Su, and Fairbanks  North Star  Borough to                                                                   
agree to  a bond based  upon a State  contact to  house beds.                                                                   
Senator Green  clarified that it  would not only  house those                                                                   
beds but also construct the facility.                                                                                           
                                                                                                                                
Co-Chair Harris  noted that the  bill provided a  maximum and                                                                   
"not to  exceed" capital costs  of $135 thousand  dollars for                                                                   
urban areas  and $155  thousand dollars  in Bethel.   Senator                                                                   
Green affirmed that information.                                                                                                
                                                                                                                                
Co-Chair  Harris questioned  Senator Green's  intent for  the                                                                   
Whittier  concern.   Senator Green  responded that  following                                                                   
passage  of  the  bill,  the City  of  Whittier  could  begin                                                                   
discussions  with  the  State about  bonding  and  continuing                                                                   
contract  service  costs  with   the  State  by  housing  the                                                                   
prisoners with continued care.   The bill requires that it be                                                                   
an  open  and competitive  process  according  to  the  State                                                                   
procurement  codes.    She  pointed  out  the  need  for  the                                                                   
feasibility study.                                                                                                              
                                                                                                                                
Co-Chair  Harris asked  if  the feasibility  study  indicated                                                                   
that private  prison care  would be  cheaper, would  there be                                                                   
language included  to indicate  that other facilities  should                                                                   
contract out.     Senator Green  explained that the  language                                                                   
deals only with the Whittier concern.   Co-Chair Harris asked                                                                   
if there could  be a "mandate" on the Department  to contract                                                                   
with  the  private  sector  when   costs  could  be  lowered.                                                                   
Senator Green did not know.                                                                                                     
                                                                                                                                
Representative  Hawker   referenced  the  Whittier   proposal                                                                   
feasibility   study,  asking   if  it   would  be   conducted                                                                   
internally or by  an independent third party.   Senator Green                                                                   
understood  that there  would  be an  independent  contractor                                                                   
hired.                                                                                                                          
                                                                                                                                
Co-Chair  Harris asked  if the  referenced  facility was  the                                                                   
Sutton Prison.  Senator Green affirmed it is.                                                                                   
                                                                                                                                
Representative  Chenault  noted  that  the  indicated  annual                                                                   
lease costs shows the facility  at the Anchorage Correctional                                                                   
Center @ $1.76 million dollars  and the Spring Creek Center @                                                                   
$1.76 million  dollars.  Ms.  Carpenter explained  that those                                                                   
numbers  are based on  actual best  estimates of  anticipated                                                                   
costs and are less than what is allocated in the bill.                                                                          
                                                                                                                                
Representative  Croft  asked about  the  competitive  bidding                                                                   
process and  if the RFP  determined that the  feasibility was                                                                   
competitively bid.   Senator Green  responded that an  RFP or                                                                   
bid provides  a feasibility  study, first  and intended  that                                                                   
any   statewide  contractors   would  be   allowed  to   bid.                                                                   
Representative  Croft  questioned  if  they  "all"  would  be                                                                   
competitive.   Senator Green replied  that in the  process, a                                                                   
competitive  bid is required  and that  the language  mirrors                                                                   
that.                                                                                                                           
                                                                                                                                
Representative  Croft agreed  that it  was covered under  the                                                                   
feasibility study,  however, pointed out language  on Page 4,                                                                   
Lines 11-12,  indicating that  the Department of  Corrections                                                                   
would be required to agree with  the City of Whittier.  There                                                                   
is already  an agreement  between the  City of Whittier  with                                                                   
companies wanting  the work.   He did not see  any discretion                                                                   
that after  the study  was done,  it would  be cheaper  to do                                                                   
anything  but a  predefined contract.    Senator Green  noted                                                                   
language  on   Page  4,  Line   23.    Representative   Croft                                                                   
questioned the effect  with the City of Whittier  for design,                                                                   
construction  and operations  of a facility.   Senator  Green                                                                   
explained  that the  intent was  for those  projects only  to                                                                   
come and the others would be "grandfathered" in.                                                                                
                                                                                                                                
Representative  Hawker  mentioned   that  there  were  people                                                                   
present who  could testify  on the  bidding process  the city                                                                   
went through.                                                                                                                   
                                                                                                                                
Representative  Chenault asked  if  other municipalities  had                                                                   
been required to follow the State  Procurement Code.  Senator                                                                   
Green affirmed,  because they would be dealing  directly with                                                                   
the State on the design and approval of the facilities.                                                                         
                                                                                                                                
Representative Chenault  reiterated concerns with  the annual                                                                   
lease  costs.    He  pointed  out  that  Fairbanks  indicates                                                                   
maximum-security  costs while  others  mention only  minimum-                                                                   
security costs.   Ms. Carpenter  stated that under  the bill,                                                                   
the annual total  lease cost for the City of  Seward would be                                                                   
$2.1 million dollars, however,  the estimate is $1.76 million                                                                   
dollars.  She noted there is leeway for errors.                                                                                 
                                                                                                                                
Representative  Hawker referenced  commentary  in the  fiscal                                                                   
analysis,  indicating  no  consideration  of  an  independent                                                                   
facility  in Whittier  and asked  what that  meant.   Senator                                                                   
Green  did  not know  and  requested  that someone  from  the                                                                   
Department respond.                                                                                                             
                                                                                                                                
Representative  Fate asked  where the  projected numbers  for                                                                   
the Anchorage expansion originated.   Senator Green explained                                                                   
that was a separate federal issue  and that those funds would                                                                   
expand  the Anchorage  facility  for the  housing of  federal                                                                   
prisoners.  That money would only  be an authorization by the                                                                   
State  for  use.   She  added  that  Governor  Murkowski  has                                                                   
indicated  that  Alaska  needs   a  large,  central  location                                                                   
facility to  house prisoners who  stay from a medium  to long                                                                   
period of  time.  There needs  to be an expansion  in Bethel,                                                                   
as during  the process,  the State  currently transfers  from                                                                   
the  overcrowded Bethel  facility  to the  one in  Anchorage.                                                                   
The Fairbanks  facility  also has needs  for additional  beds                                                                   
also, which  could be balanced  out by a large  South-central                                                                   
facility, designed  for long-term use.  It  currently, houses                                                                   
those  prisoners being  sent to  Arizona,  creating a  ripple                                                                   
effect without enough statewide prison beds.                                                                                    
                                                                                                                                
Representative  Joule noted  that he  was happy  to see  that                                                                   
some  of  the contract  jails  had  been  included,  however,                                                                   
pointed  out  that  the bill  does  not  indicate  "contract"                                                                   
concerns.   Senator  Green responded  that  at present  time,                                                                   
there is ongoing litigation to address that concern.                                                                            
                                                                                                                                
Co-Chair Harris  inquired if  the bill  covers the  rural hub                                                                   
areas.   Senator  Green  responded that  all  areas with  the                                                                   
greatest needs are covered.  She  added that local government                                                                   
must  agree   to  accept  the   process  of  advocating   and                                                                   
willingness to  assume the bonding  burden on that  there are                                                                   
many communities  not  interested in  doing that.   SB  65 is                                                                   
designed  as  a  lease/purchase;   the  State  will  own  the                                                                   
facility  and  the  community  will be  involved  in  design,                                                                   
construction, maintenance and  use of it.  In response to Co-                                                                   
Chair Harris, Senator  Green added that is the  same with the                                                                   
Whittier  facility and  that the State  would ultimately  own                                                                   
it.                                                                                                                             
                                                                                                                                
JODY  SIMPSON,  MEMBER,  MAT   SU  BOROUGH  ASSEMBLY,  voiced                                                                   
support  for SB  65.   She  noted  that the  Mat-Su  Assembly                                                                   
adopted a resolution  supporting the concept  of establishing                                                                   
State-operated prisons for the following reasons:                                                                               
                                                                                                                                
   ·    Pressing need to reduce overcrowding in Alaska                                                                          
        prisons;                                                                                                                
   ·    Bringing home prisoners currently housed out of                                                                         
        State;                                                                                                                  
   ·    Providing needed construction and year-round jobs;                                                                      
        and that                                                                                                                
   ·    Maintaining prisoners in-state, allows them to be                                                                       
        closer to their families and culture, enhancing                                                                         
        rehabilitation.                                                                                                         
                                                                                                                                
Representative  Stoltze  mentioned  the Valley  Hospital  and                                                                   
other new triads.   He asked their ability  to provide secure                                                                   
beds.  Ms. Simpson did not understand  the connection between                                                                   
the two facilities.                                                                                                             
                                                                                                                                
RAY  GILLESPIE,  LOBBYIST,  MAT SU  BOROUGH,  explained  that                                                                   
there  had been  extensive discussions  with Triad  regarding                                                                   
the need  for bed security  in the event  that the  prison is                                                                   
built.   It is understood  that it would  be provided  by the                                                                   
Valley Hospital.                                                                                                                
                                                                                                                                
MARC   ANTRIM,  COMMISSIONER,   DEPARTMENT  OF   CORRECTIONS,                                                                   
indicated  that the Department  and the  Governor support  SB                                                                   
65,  allowing  the  Department   of  Corrections  to  address                                                                   
longstanding  capacity  issues.    At  any  given  time,  the                                                                   
Department  is  at  100%  capacity with  750+  out  of  State                                                                   
prisoners.  SB  65 provides a vehicle for  the Administration                                                                   
to address these concerns.  The  bill has a bonding component                                                                   
built  into it, so  that the  State can  only fund  projects,                                                                   
which will not negatively affect credit rating.                                                                                 
                                                                                                                                
Representative  Stoltze  inquired  about  the status  of  the                                                                   
Correction  Corporation from Florence.   Commissioner  Antrim                                                                   
responded that the  Department currently has an  RFP for out-                                                                   
of-state contract  beds and that the Corrections  Corporation                                                                   
of  America  is   the  contractor  that  the   Department  is                                                                   
currently working with.                                                                                                         
                                                                                                                                
Representative Stoltze asked if  the Department anticipates a                                                                   
large savings  during the  next round of  RFP's.   Mr. Antrim                                                                   
advised  the  Department  is  attempting  to  determine  that                                                                   
through negotiations.                                                                                                           
                                                                                                                                
JERRY  BURNETT, DIRECTOR,  ADMINISTRATIVE SERVICES  DIVISION,                                                                   
DEPARTMENT OF CORRECTIONS, noted  "worse fear" scenarios.  He                                                                   
thought it would  be surprising if future prices  were lower.                                                                   
The State is currently in active negotiations on price.                                                                         
                                                                                                                                
Representative  Hawker spoke  to concerns  of the  long-term,                                                                   
down-range costs.   No  one has challenged  the need  for the                                                                   
facilities   but  he   questioned   the  long-term   deferred                                                                   
maintenance  costs.   He  inquired  if  the option  had  been                                                                   
considered for  the City  of Whittier to  cover the  debt for                                                                   
operations of the facility.  Mr.  Burnett said there has been                                                                   
no  cost analysis  of that  issue  and that  without one,  he                                                                   
would not know  the answer.  Commissioner  Antrim interjected                                                                   
that  in either  case, the  State will  see costs  associated                                                                   
with the facility.                                                                                                              
                                                                                                                                
RICK HOHNBAUM, (TESTIFIED VIA  TELECONFERENCE), CITY MANAGER,                                                                   
CITY OF WHITTIER,  reaffirmed Whittier's interest  and desire                                                                   
to establish a city-owned and  contractually operated private                                                                   
prison.  The economic benefits  would be significant for that                                                                   
small community.   The  community and  the City Council  have                                                                   
continually  supported the  project.   He noted  that he  had                                                                   
been  encouraged  by  the  City   to  make  sure  that  every                                                                   
opportunity was taken to guarantee  success.  He spoke of the                                                                   
bidding process  and the selection  of the firm  partnership,                                                                   
providing:                                                                                                                      
                                                                                                                                
   ·    Economic benefit to the City of Whittier,                                                                               
   ·    Financial benefit of cost savings for a private                                                                         
        prison for the State, and                                                                                               
   ·    Social benefit of housing prisoners in the same                                                                         
        State as family with cultural connections for the                                                                       
        long-term benefit of prisoners and families of                                                                          
        prisoners.                                                                                                              
                                                                                                                                
                                                                                                                                
TAPE HFC 04 - 110, Side B                                                                                                     
                                                                                                                                
                                                                                                                                
Mr.  Hohnbaum  offered to  answer  further questions  of  the                                                                   
Committee.                                                                                                                    
                                                                                                                                
DEE    HUBBARD,     CITIZEN    ACTIVIST     (TESTIFIED    VIA                                                                   
TELECONFERENCE), STERLING,  noted that she supports  SB 65 as                                                                   
it came  over from  the Senate,  especially the inclusion  of                                                                   
the training  requirements.   She pointed out  Representative                                                                   
Croft's  Amendment #3,  which would  delete Section  5.   She                                                                   
questioned Representative  Hawker's Amendment #1,  to Line 9,                                                                   
and asked about a feasibility  study extending over a 25-year                                                                   
period.  Ms.  Hubbard asked why the Office  of Management and                                                                   
Budget (OMB) had  been selected instead of the  Department of                                                                   
Corrections and  the Department of Administration  to fulfill                                                                   
the contract.   Ms. Hubbard continued addressing  concerns of                                                                   
the amendments.  (Copies of All Amendments on File).                                                                            
                                                                                                                                
Ms. Hubbard identified  concerns regarding use  for the State                                                                   
procurement  code.    She  recommended   that  an  audit  for                                                                   
contract  monitoring compliance  be placed  in statute.   She                                                                   
added that  there should  be a use  of fines for  non-payment                                                                   
and a  specific list  of "powers and  non powers"  granted to                                                                   
contractors.                                                                                                                    
                                                                                                                                
Representative   Stoltze    recommended   that    the   State                                                                   
procurement officer address Ms. Hubbard's questions.                                                                            
                                                                                                                                
Representative  Hawker  MOVED  to ADOPT  Amendment  #1,  #23-                                                                   
LS0392\NA.8, Luckhaupt,  5/8/04.  (Copy on File).    Co-Chair                                                                   
Williams OBJECTED for discussions purposes.                                                                                     
                                                                                                                                
Representative Hawker  explained that Amendment  #1 clarifies                                                                   
the Whittier component:                                                                                                         
                                                                                                                                
   ·    The first section, Page 4, Line 4, mirrors language                                                                     
        for authorization of other municipal  facilities with                                                                   
        intent  to relieve  overcrowding  for  the  statewide                                                                   
        correctional facilities.                                                                                                
   ·    Page 4, Line 9, language clarifies that when the                                                                        
        contract is signed,  there should be a  cost analysis                                                                   
        study defined  before the  State moves  forward.   An                                                                   
        outside study would be mandated.                                                                                        
   ·    Page 4, Line 10 specifies that the study shall be                                                                       
        contracted in an out-source basis.                                                                                      
   ·    Page 4, Line 12, language defines what the                                                                              
        feasibility study  should  determine and  that it  be                                                                   
        completed by October 1, 2004.   Representative Hawker                                                                   
        requested to amend that section by  changing the date                                                                   
        to January 1,  2005.  There  being NO OBJECTION,  the                                                                   
        date was changed.                                                                                                       
   ·    Page 4, Line 15, provides language to guarantee that                                                                    
        comparisons are equal.                                                                                                  
                                                                                                                                
Senator Green agreed to most of  the amendment except for the                                                                   
feasibility  completion date.   She admitted  that there  are                                                                   
many steps  that need to  be addressed before  the completion                                                                   
date; not  knowing when the  request will move  forward would                                                                   
make that difficult.                                                                                                            
                                                                                                                                
Representative  Hawker  asked  if it  would  relieve  Senator                                                                   
Green's concerns  to add language that it be  complete within                                                                   
six months  of the proposed receipt  from the city.   Senator                                                                   
Green replied  that if everything  was complete by  2006 that                                                                   
would be the  end date.  She  did not know how long  it would                                                                   
take and requested that the Department address that.                                                                            
                                                                                                                                
Co-Chair Harris asked if there  had been a required timeframe                                                                   
for  the  feasibility  study  related  to  other  facilities.                                                                   
Senator Green  stated that  none had  been required  and that                                                                   
the  requirement  did  address   contracts  and  labor  force                                                                   
development.   A feasibility study  would be required  if the                                                                   
intent  were to  use anything  by  the State  labor force  in                                                                   
order  to build a  facility.   A method  for outsourcing  and                                                                   
privatization could be provided.   Therefore, that would make                                                                   
a feasibility  study a  requirement.   She admitted  that she                                                                   
did not know  time constraints associated on  the feasibility                                                                   
studies.                                                                                                                        
                                                                                                                                
Co-Chair Williams  recommended that each  community establish                                                                   
the  date.   Representative  Hawker  mentioned  concern  with                                                                   
providing a date  certain.  If the Department  of Corrections                                                                   
had everything  in place by a  certain time, they  would have                                                                   
to  enter into  a lease  agreement.   He  thought that  there                                                                   
needed  to  be  protection  for   communities  and  that  the                                                                   
completion date or the date certain  could be eliminated.  He                                                                   
stressed that the community deserves  certainty that there is                                                                   
a level playing field.                                                                                                          
                                                                                                                                
Senator Green replied that there  is "no certainty" in any of                                                                   
the bill.  Any  city or group that comes to  the commissioner                                                                   
and indicates  that their city  was willing to go  into debt,                                                                   
there still  would be no assurance  that they would  be given                                                                   
permission.   She stressed  that there was  no intent  in the                                                                   
bill to provide  assurance.  The bill is permissive  with in-                                                                   
dates for private & other facilities around the State.                                                                          
                                                                                                                                
Co-Chair Williams asked Representative  Hawker if it would be                                                                   
okay to  make the  appropriate  changes in  that area of  the                                                                   
amendment.     Representative   Hawker  requested   that  the                                                                   
Department of Corrections testify regarding any change.                                                                         
                                                                                                                                
                                                                                                                                
Recess:        12:25 P.M.                                                                                                     
Reconvene:     12:40 P.M.                                                                                                     
                                                                                                                                
                                                                                                                                
Representative  Hawker  MOVED   to  change  Amendment  #1  by                                                                   
deleting language  on Lines 14 & 15:  "The  feasibility study                                                                   
shall be  completed by  October 1,  2004".  Additionally,  it                                                                   
would need  to include changing the  date on Page 4,  Line 5,                                                                   
from July  1, 2006  to July  1, 2007.   Representative  Croft                                                                   
OBJECTED   for   further  clarification.      Following   the                                                                   
Department providing  that information, Representative  Croft                                                                   
WITHDREW his  OBJECTION.  There  being NO further  OBJECTION,                                                                   
Amendment #1 as amended was adopted.                                                                                            
                                                                                                                                
Representative  Hawker MOVED to  WITHDRAW Amendment  #2, #23-                                                                   
LS0392\N.A.10, Luckhaupt, 5/8/04.   (Copy on File).  He noted                                                                   
that #2  would be replaced by  Amendment #5.  There  being NO                                                                   
OBJECTION, Amendment #2 was withdrawn.                                                                                          
                                                                                                                                
Representative Croft  MOVED to ADOPT Amendment #3.   (Copy on                                                                   
File).  Co-Chair Williams OBJECTED.                                                                                             
                                                                                                                                
Representative Croft explained  the amendment.  He emphasized                                                                   
that the  privatization of  the prison  system bill  has been                                                                   
around   for  many  years.     He   recounted  the   numerous                                                                   
communities who have  attempted to get that  proposal and how                                                                   
devastating  it was to  each of  them.  Representative  Croft                                                                   
objected to the litany of "sole  source projects".  There has                                                                   
never been a clean proposal presented  to the Committee.  The                                                                   
proposals  are always  sole source,  with  heavy money  deals                                                                   
directed to  one contractor.   It  is always prearranged  and                                                                   
never clean.   He believed that the legislation  would result                                                                   
in sole  sourcing being  prearranged with political  pressure                                                                   
through construction and continued operations.                                                                                  
                                                                                                                                
Representative Croft warned that  the State would see someone                                                                   
indicted and likely sent to prison  over the proposed series.                                                                   
He stressed that he "hates" this  type of proposal because of                                                                   
what  it  does to  the  integrity  of  the Legislature.    He                                                                   
disliked  the   "high  money   and  motives  money   and  the                                                                   
legislators".    These  proposals historically  have  left  a                                                                   
trail of  damaged communities.   Representative  Croft warned                                                                   
that Whittier would regret it at some point.                                                                                    
                                                                                                                                
Senator Green  interjected that the amendment  language would                                                                   
return the  legislation to  the original  bill.  She  pointed                                                                   
out  that the  Whittier language  had been  added with  great                                                                   
deliberation.   All  the language  is  "futuristic" and  will                                                                   
result  in  a  lease-purchase   owned  by  the  State.    She                                                                   
acknowledged it would be a policy call.                                                                                         
                                                                                                                                
Representative  Stoltze   commented  that  Amendment   #3  is                                                                   
important and  requested an analysis.   He inquired  if there                                                                   
had been  an overview  of the  contract between  the City  of                                                                   
Whittier and that contracting group.                                                                                            
                                                                                                                                
VERN  JONES,   CHIEF  PROCUREMENT   OFFICER,  DEPARTMENT   OF                                                                   
ADMINISTRATION,  indicated that the  Department had  not read                                                                   
the contract, but  had read the City of Whittier's  RFP.  The                                                                   
procurement process  for the City of Whittier  did not comply                                                                   
with  the  State's  contract  process.    Whittier  would  be                                                                   
subjected  to their own  ordinances.   Without Amendment  #3,                                                                   
the bill  requires the City  of Whittier procurement  process                                                                   
to  comply  with   the  State's.    He  offered   to  provide                                                                   
technicalities regarding negotiation costs.                                                                                     
                                                                                                                                
Representative  Hawker  acknowledged   that  the  bill  could                                                                   
resolve concerns raised by Representative  Croft.  He said he                                                                   
opposed Amendment #3.                                                                                                           
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR:      Croft, Stoltze                                                                                                   
OPPOSED:       Fate, Foster, Hawker, Joule, Meyer, Moses,                                                                       
               Chenalut, Williams, Harris                                                                                       
                                                                                                                                
The MOTION FAILED (2-9).                                                                                                        
                                                                                                                                
Representative  Stoltze  MOVED to  ADOPT  Amendment #4,  #23-                                                                   
LS0392\NA.4, Luckhaupt,  5/4/04.   (Copy on File).   Co-Chair                                                                   
Williams OBJECTED.                                                                                                              
                                                                                                                                
Representative  Stoltze advised  that  the sponsor  submitted                                                                   
the amendment in order to provide clean up language.                                                                            
                                                                                                                                
Senator  Green   said  it  was  obvious  that   a  provision,                                                                   
addressing  the qualification  concerns  of the  correctional                                                                   
officers,  needed  language  for  all  the hard  beds.    The                                                                   
amendment  would add  new language  highlighting the  intent.                                                                   
Co-Chair  Williams WITHDREW  his OBJECTION.   There  being No                                                                   
further OBJECTION, Amendment #4 was adopted.                                                                                    
                                                                                                                                
Representative   Hawker    WITHDREW   Amendment    #5,   #23-                                                                   
LS0392\NA.11, Luckhaupt, 5/09/04.  (Copy on File).                                                                              
                                                                                                                                
Representative  Croft  MOVED  to  ADOPT  Amendment  #6,  #23-                                                                   
LSO392,NA.6, Luckhaupt,  5/07/04.  (Copy on  File).  Co-Chair                                                                   
Williams OBJECTED.                                                                                                              
                                                                                                                                
Representative Croft  explained that the amendment  would add                                                                   
a "small amount  of competitive nature" to the  proposal.  He                                                                   
reiterated    his    concerns   regarding    sole    sourcing                                                                   
"privatization",  creating   a  combination  for   the  worst                                                                   
aspects of government and business.                                                                                             
                                                                                                                                
Senator  Green  noted   that  she  did  not   object  to  the                                                                   
amendment.  Co-Chair Williams WITHDREW his OBJECTION.                                                                           
                                                                                                                                
Representative   Fate   questioned    the   powers   of   the                                                                   
Department's  commissioner  to   select  the  facility  site.                                                                   
Representative Croft responded  that language was included in                                                                   
the section about the Whittier  proposal and intended to be a                                                                   
contemplated site.   He stated  that the key aspect  was that                                                                   
it be open  for bid on a  non-preferential basis and  that it                                                                   
was  included in  the  authorization list  with  the City  of                                                                   
Whittier.                                                                                                                       
                                                                                                                                
Representative Stoltze asked if  the proposed amendment would                                                                   
improve the  Department's "comfort  level with the  process".                                                                   
Mr.  Jones  responded  that the  language  of  the  amendment                                                                   
requires  the  competitive process  and  that  made him  more                                                                   
comfortable.                                                                                                                    
                                                                                                                                
                                                                                                                                
TAPE HFC 04 - 111, Side A                                                                                                     
                                                                                                                                
                                                                                                                                
Representative Hawker thought  the bill delineated a "forward                                                                   
looking  process"  and  provides   an  alignment  with  State                                                                   
statute.  He added that the amendment serves no function.                                                                       
                                                                                                                                
Co-Chair  Harris  pointed  out   that  the  language  of  the                                                                   
amendment provides  a mandatory  "shall".  He  commented that                                                                   
the Department  of Corrections  commissioner had  no business                                                                   
selecting the site.  The determination  should be left to the                                                                   
party given the proposal.                                                                                                       
                                                                                                                                
Representative Hawker  advised that there is  language in the                                                                   
bill that the commissioner "shall"  approve the design of the                                                                   
facility.                                                                                                                       
                                                                                                                                
Representative Stoltze maintained  that the commissioner, the                                                                   
Department  and the State  should have  interest in  the site                                                                   
selection process.   The placement of prisons  and the manner                                                                   
in which they  interface with those communities  is relevant.                                                                   
The amendment would provide good benefit.                                                                                       
                                                                                                                                
Co-Chair  Harris took  issue with  the  possibility of  there                                                                   
being opposition  between the State and the  public regarding                                                                   
the chosen  area.  He believed  that the language  should not                                                                   
be included, as the public should determine that policy.                                                                        
                                                                                                                                
A  roll call  vote  was  taken on  the  motion  to adopt  the                                                                   
amendment.                                                                                                                      
                                                                                                                                
IN FAVOR:      Stoltze, Croft                                                                                                   
OPPOSED:       Fate, Foster, Hawker, Joule, Meyer, Moses,                                                                       
               Chenalut, Harris, Williams                                                                                       
                                                                                                                                
The MOTION FAILED (2-9).                                                                                                        
                                                                                                                                
Representative Foster MOVED to  report HCS CS SB 65 (FIN) out                                                                   
of Committee  with  individual recommendations  and with  the                                                                   
accompanying fiscal note.                                                                                                       
                                                                                                                                
Representative Croft OBJECTED.                                                                                                  
                                                                                                                                
Representative  Croft  referred  to  all  previous  statewide                                                                   
lawsuits resulting from such a choice.                                                                                          
                                                                                                                                
Co-Chair    Harris   objected    to   comments   voiced    by                                                                   
Representative Croft.  He claimed  that the bill as currently                                                                   
written  makes it difficult  for any  Administration  to move                                                                   
forward.  He added that most of the bill is good.                                                                               
                                                                                                                                
Representative  Hawker   agreed  that  the  bill   was  good,                                                                   
suggesting   that  most   concerns   had  been   thoughtfully                                                                   
advocated throughout the bill.                                                                                                  
                                                                                                                                
A roll  call vote was  taken on the  motion to move  the bill                                                                   
from Committee.                                                                                                                 
                                                                                                                                
IN FAVOR:      Foster, Hawker, Joule, Meyer, Stoltze,                                                                           
               Chenault, Fate, Williams, Harris                                                                                 
OPPOSED:       Moses, Croft                                                                                                     
                                                                                                                                
The MOTION PASSED (9-2).                                                                                                        
                                                                                                                                
HCS  CS  SB 65  (FIN)  was  reported  out of  Committee  with                                                                   
"individual" recommendations  and with fiscal note  #2 by the                                                                   
Department of Corrections.                                                                                                      
                                                                                                                                
HOUSE BILL NO. 562                                                                                                            
                                                                                                                                
     An Act relating to the establishment of the Interior                                                                       
     Rivers Port Authority; and providing for an effective                                                                      
     date.                                                                                                                      
                                                                                                                                
Co-Chair  Harris  MOVED  to ADOPT  work  draft  version  #23-                                                                   
LS1951\Q,  Utermohle,  5/6/04, as  the  version  of the  bill                                                                   
before  the Committee.    (Copy  on File).    There being  NO                                                                   
OBJECTION, it was adopted.                                                                                                      
                                                                                                                                
CARL MORGAN,  SPONSOR, explained  that the legislation  would                                                                   
create  an  Interior  Rivers   Port  Authority,  which  would                                                                   
regionalize planning  for the small, unorganized  communities                                                                   
in  rural  Alaska.   The  Port  Authority  would  include  25                                                                   
communities.  He added that landowners  of the region with an                                                                   
eleven-member  board would represent  the Authority  with six                                                                   
living physically in the areas  and then three public members                                                                   
including   the   commissioners    of   the   Department   of                                                                   
Transportation  & Public  Facilities  and  the Department  of                                                                   
Community & Economic Development.                                                                                               
                                                                                                                                
Representative  Morgan  explained  that  the  Port  Authority                                                                   
would have  power to  accept private,  municipal, State,  and                                                                   
federal funds, issue tax exempt  revenue bonds and enter into                                                                   
non-lease  acquisitions.    It   is  not  intended  that  the                                                                   
Authority will create a financial obligation to the State.                                                                      
                                                                                                                                
Representative  Morgan acknowledged  skepticism with  the new                                                                   
legislation.  He  listed the many supporters  and pointed out                                                                   
the main  opposition comes from  concerns of eminent  domain.                                                                   
Native tribes in Alaska do not  own land, whether or not, the                                                                   
Native    and   Village    Corporations    own   the    land.                                                                   
Representative Morgan  commented that Native  Corporations in                                                                   
the proposed areas support the bill.                                                                                            
                                                                                                                                
Representative  Fate  noted  support  for the  concept.    He                                                                   
questioned   the   eminent  power   domain   and   safeguards                                                                   
associated with other allotment areas.                                                                                          
                                                                                                                                
PAUL FUHS,  LOBBYIST &  TECHNICAL EXPERT  TO SENATOR  MORGAN,                                                                   
ANCHORAGE,  explained that  the only  property that  could be                                                                   
taken  would  have  to  be  within   the  boundaries  of  the                                                                   
authority itself.   The  language would be  like that  of the                                                                   
Department of Transportation &  Public Facilities, indicating                                                                   
that it  is for a  public purpose.   Native corporations  are                                                                   
primarily the  private landowners and they have  accepted the                                                                   
proposal.   On a regional  level, they  would be giving  up a                                                                   
portion  of autoimmunity.    He commented  that  it has  been                                                                   
specifically  noted that  it could  only be  within the  port                                                                   
authority boundaries.                                                                                                           
                                                                                                                                
Responding to  Representative Fate,  Mr. Fuhs explained  that                                                                   
he did not believe it could be  within the pipeline corridor.                                                                   
Regardless, there  is no way they could use  those properties                                                                   
for any public purpose.                                                                                                         
                                                                                                                                
Representative  Hawker  MOVED   to  ADOPT  Amendment  #1,  as                                                                   
requested  by Senator  Morgan.   (Copy  on  File).   Co-Chair                                                                   
Williams OBJECTED.                                                                                                              
                                                                                                                                
Mr. Fuhs  advised that Amendment  #1 would bring  the bonding                                                                   
authority  in-line with Alaska  Development Export  Authority                                                                   
(ADEA) and  Alaska Energy  Authority (AEA)  in the  amount of                                                                   
ten million dollars.                                                                                                            
                                                                                                                                
Co-Chair  Harris inquired  if it would  affect other  natural                                                                   
gas  projects along  the coast.    Mr. Fuhs  stated that  the                                                                   
"energy is  contemplated for that  area only" and  other than                                                                   
that, it would be a different issue.                                                                                            
                                                                                                                                
Representative  Fate  reminded   members  that  the  new  gas                                                                   
pipeline would come across the  Yukon area, and questioned if                                                                   
$10 million would  be sufficient.  Mr. Fuhs  admitted that it                                                                   
probably would not be enough and  that they would likely have                                                                   
to come for further authorization.                                                                                              
                                                                                                                                
Representative Foster MOVED to  report CS HB 562 (FIN) out of                                                                   
Committee  with  individual  recommendations   and  with  the                                                                   
accompanying fiscal  note.  There being NO  OBJECTION, it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
CS HB  562 (FIN)  was reported  out of  Committee with  a "do                                                                   
pass" recommendation  and  with a new  indeterminate  note by                                                                   
the Department of Community & Economic Development.                                                                             
                                                                                                                                
SENATE BILL NO. 387                                                                                                           
                                                                                                                                
     An  Act authorizing  the  making of  certain  commercial                                                                   
     fishing loans  to eligible community quota  entities for                                                                   
     the  purchase  of  certain  fishing  quota  shares;  and                                                                   
     providing for an effective date.                                                                                           
                                                                                                                                
GREG WINEGAR,  DIRECTOR, DIVISION OF INVESTMENTS,  DEPARTMENT                                                                   
OF  COMMUNITY   &  ECONOMIC  DEVELOPMENT,  stated   that  the                                                                   
legislation  would authorize  loans  to federally  designated                                                                   
community quota entities authorized  by federal regulation to                                                                   
purchase and hold  certain fishing quota shares  and to lease                                                                   
the resultant  individual fishing  quota shares to  community                                                                   
residents.                                                                                                                      
                                                                                                                                
The  federal   government  is  currently   proposing  federal                                                                   
regulations  that   if  adopted,  would  amend   the  federal                                                                   
individual fishing  quota (IFQ)  program.  The  definition of                                                                   
an  eligible quota  shareholder  would  be revised  to  allow                                                                   
specific communities in the Gulf  of Alaska to purchase quota                                                                   
shares for  halibut and sablefish  fisheries.   The community                                                                   
quota  entity may  then hold the  shares for  lease to  their                                                                   
community  residents.    Quota  shares and  loans  for  their                                                                   
purchase under the Commercial  Fishing Loan Act are presently                                                                   
limited to individuals.                                                                                                         
                                                                                                                                
Mr. Winegar  noted that the purpose  of the amendment  was to                                                                   
improve the  economic viability of those  communities through                                                                   
local ownership  of fishing  privileges.   Since the  initial                                                                   
allocation of  quota shares, all  but two of the  42 eligible                                                                   
communities  have experienced  a significant  decline in  the                                                                   
number of  quota shares  held by residents.   The  bill would                                                                   
provide  a financing  mechanism  that could  be  used by  the                                                                   
communities to help reverse the trend.                                                                                          
                                                                                                                                
Co-Chair  Harris MOVED  to repot  SB 387am  out of  Committee                                                                   
with  individual recommendations  and  with the  accompanying                                                                   
fiscal note.  There being NO OBJECTION, it was so ordered.                                                                      
                                                                                                                                
SB  387am was  reported out  of  Committee with  a "do  pass"                                                                   
recommendation  and with zero  note #1  by the Department  of                                                                   
Community  & Economic  Development and  zero note  #2 by  the                                                                   
Department of Fish & Game.                                                                                                      
                                                                                                                                
CS FOR SENATE BILL NO. 279(FIN)                                                                                               
                                                                                                                                
     An  Act authorizing  and  relating  to the  issuance  of                                                                   
     bonds  by the  Alaska  Housing Finance  Corporation  for                                                                   
     safe  and  clean  water  and  hygienic  sewage  disposal                                                                   
     facility  capital projects  and other capital  projects;                                                                   
     providing  for  the  repayment  of the  bonds  and  bond                                                                   
     costs;  relating to the  dividend paid  to the  state by                                                                   
     the Alaska  Housing Finance  Corporation; and  providing                                                                   
     for an effective date.                                                                                                     
                                                                                                                                
BRYAN BUTCHER,  LEGISLATIVE LIAISON,  ALASKA HOUSING  FINANCE                                                                   
CORPORATION   (AHFC),  DEPARTMENT   OF  REVENUE,   ANCHORAGE,                                                                   
offered to answer questions from the Committee.                                                                                 
                                                                                                                                
Co-Chair  Harris MOVED  to  report  CS SB  279  (FIN) out  of                                                                   
Committee  with  individual  recommendations   and  with  the                                                                   
accompanying fiscal note.  Co-Chair Williams OBJECTED.                                                                          
                                                                                                                                
Following  a brief  at-ease, Co-Chair  Williams WITHDREW  his                                                                   
OBJECTION.                                                                                                                      
                                                                                                                                
Representative  Hawker  acknowledged  that the  village  safe                                                                   
water projects  are needed, however,  he voiced  concern that                                                                   
the bill  would deny general fund  money for the future.   He                                                                   
stated  that until  the entire  State is  behind a  long-term                                                                   
fiscal policy  change, money should  not be added  to special                                                                   
project concerns.   Representative Hawker OBJECTED  to moving                                                                   
the bill from Committee.                                                                                                        
                                                                                                                                
Mr. Butcher pointed  out that AHFC's Chief  Executive Officer                                                                   
(CEO), Mr.  Dan Fauske, had  recommended that the  State bond                                                                   
for  village  safe water  projects  and  that  traditionally,                                                                   
those projects were  paid through dividends.   This year, the                                                                   
Governor decided on a different proposal.                                                                                       
                                                                                                                                
Representative Hawker MAINTAINED his OBJECTION.                                                                                 
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR:      Meyer, Chenault, Croft, Fate, Foster, Harris,                                                                    
               Williams                                                                                                         
OPPOSED:       Stoltze, Hawker                                                                                                  
                                                                                                                                
Representative  Moses  and  Representative   Joule  were  not                                                                   
present for the vote.                                                                                                           
                                                                                                                                
The MOTION PASSED (7-2).                                                                                                        
                                                                                                                                
CS  SB  279   (FIN)  was  reported  out  of   Committee  with                                                                   
"individual"  recommendations  and with  a zero  note by  the                                                                   
Department of Revenue.                                                                                                          
                                                                                                                                
CS FOR SENATE BILL NO. 357(FIN)                                                                                               
                                                                                                                                
     An  Act   relating  to  the  regulation   of  insurance,                                                                   
     insurance   licenses,   qualifications    of   insurance                                                                   
     producers,   surplus   lines,    fraud   investigations,                                                                   
     electronic  transactions,  and compliance  with  federal                                                                   
     law  and  national  standards;   and  providing  for  an                                                                   
     effective date.                                                                                                            
                                                                                                                                
LINDA HALL,  DIVISION OF  INSURANCE, DEPARTMENT OF  COMMUNITY                                                                   
AND  ECONOMIC  DEVELOPMENT, explained  that  the  legislation                                                                   
would  ensure  that  Alaska  statutes   are  consistent  with                                                                   
federal  law  (provisions  mandated  under  the  Gramm-Leach-                                                                   
Bliley  Act)  and  with  model  acts  and  standards  of  the                                                                   
National Association of Insurance  Commissioners (NAIC).  The                                                                   
NAIC  accreditation  team  suggested  some  of  the  proposed                                                                   
changes   addressing   financial   oversight   of   insurance                                                                   
companies  when   Alaska  was  reviewed  for   a  renewal  of                                                                   
accredited status.   Some of  the proposed changes  relate to                                                                   
updating  procedures  in  order  to  better  reflect  current                                                                   
insurance environment and enabling  electronic communications                                                                   
between the  Division of Insurance  and the public,  industry                                                                   
and other  regulators.  Two key  elements of the  Division of                                                                   
Insurance are:                                                                                                                  
                                                                                                                                
   ·    Protecting the consumer                                                                                                 
   ·    Enhancing the insurance business environment                                                                            
                                                                                                                                
Ms. Hall provided a sectional analysis of the bill.                                                                             
                                                                                                                                
                                                                                                                                
TAPE HFC 04 - 111, Side B    (faulty tape - changed)                                                                          
TAPE HFC 04 - 112, Side A                                                                                                     
                                                                                                                                
                                                                                                                                
Ms. Hall continued with the analysis.                                                                                           
                                                                                                                                
Representative Fate  inquired if automobile  warranties would                                                                   
be considered in the same manner.                                                                                               
                                                                                                                                
Ms. Hall  responded  that it would  depend  on who wrote  the                                                                   
automobile  coverage.   If the  federal government  regulates                                                                   
the company, the State cannot  preempt that.  There is little                                                                   
local control on risk groups.                                                                                                   
                                                                                                                                
Representative  Hawker inquired if  there could be  testimony                                                                   
heard from the industry.  Co-Chair  Williams pointed out that                                                                   
there were no representatives present from that group.                                                                          
                                                                                                                                
Representative  Hawker asked  if the  industry supported  the                                                                   
bill.   Ms.  Hall replied  that to  date, there  had been  no                                                                   
testimony either  way on the  proposed changes.   The changes                                                                   
will  only  "standardize"  what  is  currently  done  by  the                                                                   
Division.  Representative  Hawker was "astounded"  that there                                                                   
had been no testimony received by the industry.                                                                                 
                                                                                                                                
Co-Chair  Williams   MOVED  to   ADOPT  Amendment   #1,  #23-                                                                   
LS1684\Q.4,  Bullock, 5/5/04.   (Copy  on File).   Vice-Chair                                                                   
Meyer OBJECTED.                                                                                                                 
                                                                                                                                
JERRY  RHINEWALD, LOBBYIST,  BLUE  CROSS AND  BLUE SHIELD  OF                                                                   
ALASKA, JUNEAU, noted  that Blue Cross was in  the process of                                                                   
moving from a non-profit company  to a per profit company and                                                                   
currently,  is   under  scrutiny  by  Alaska's   Division  of                                                                   
Insurance.   There is  concern that  Section 18 could  create                                                                   
problems  in the  transition process  that  would change  the                                                                   
"rules of the game".  He did not  believe it would affect the                                                                   
regulatory   environment.    Mr.   Rhinewald  requested   the                                                                   
Committee's consideration  of the amendment.   Ms. Hall noted                                                                   
that the Division had no objection to the amendment.                                                                            
                                                                                                                                
Vice  Chair Meyer  WITHDREW his  OBJECTION.   There being  NO                                                                   
further OBJECTION, Amendment #1 was adopted.                                                                                    
                                                                                                                                
Co-Chair Williams  pointed out a Letter of Intent.   (Copy on                                                                   
File).   Mr. Rhinewald commented  that the letter  would make                                                                   
the  Alaska  market more  attractive  to  national  insurance                                                                   
companies.  The  Letter of Intent would continue  dialogue on                                                                   
ways  to improve  making the  Alaska  market more  attractive                                                                   
without compromising  the integrity of the  insurance program                                                                   
or consumer protection.                                                                                                         
                                                                                                                                
Co-Chair  Williams  MOVED  to  ADOPT the  Letter  of  Intent.                                                                   
There being NO OBJECTION, it was adopted.                                                                                       
                                                                                                                                
Representative  Croft  MOVED  to  ADOPT  Amendment  #2,  #23-                                                                   
LS1684\Q.7,  Craver,  5/9/04.    (Copy on  File).    Co-Chair                                                                   
Williams OBJECTED.                                                                                                              
                                                                                                                                
Representative  Croft  spoke to  the amendment  and  concerns                                                                   
with HB 311, replacing Administration  needs and placing them                                                                   
into  the worker's  compensation.   He  suggested that  could                                                                   
provide "insurance" for the Commissioner of Insurance.                                                                          
                                                                                                                                
Co-Chair Harris stated support  for Amendment #2, noting that                                                                   
it is  important  to get  the parts  of HB 311  that are  non                                                                   
controversial in place.                                                                                                         
                                                                                                                                
Ms. Hall noted that she had authored  that language in HB 311                                                                   
and that  she would be "hesitant  to remove portions  of that                                                                   
bill", putting them into SB 357.                                                                                                
                                                                                                                                
Co-Chair Williams  acknowledged that  he also did  not accept                                                                   
the amendment  language.  If  the Committee wants  to take-up                                                                   
HB 311, it should address that bill separately.                                                                                 
                                                                                                                                
Representative Croft  understood that the intent  to continue                                                                   
was to  provide for a debate.   Co-Chair Williams  disagreed,                                                                   
stating that the  Committee should work on HB 311  if that is                                                                   
the  concern.   Co-Chair Harris  reiterated  support for  the                                                                   
"intent of the  amendment", but indicated that  he would vote                                                                   
with  Co-Chair Williams.   He  requested  that policy  remain                                                                   
consistent with bills coming before the Committee.                                                                              
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR:      Croft                                                                                                            
OPPOSED:       Meyer, Stoltze, Chenault, Fate, Foster,                                                                          
               Hawker, Williams, Harris                                                                                         
                                                                                                                                
Representative  Joule  and  Representative   Moses  were  not                                                                   
present for the vote.                                                                                                           
                                                                                                                                
The MOTION FAILED (1-8).                                                                                                        
                                                                                                                                
Co-Chair Williams advised that  Amendment #3, #23-LS1684\Q.6,                                                                   
Bullock, 5/8/04 had been WITHDRAWN.  (Copy on File).                                                                            
                                                                                                                                
Representative  Foster MOVED to  report HCS  CS SB  357 (FIN)                                                                   
out  of Committee  with individual  recommendations and  with                                                                   
the accompanying  fiscal note.  There being  NO OBJECTION, it                                                                   
was so ordered.                                                                                                                 
                                                                                                                                
HCS CS SB 357 (FIN) was reported  out of Committee with a "no                                                                   
recommendation", a  Letter of Intent and zero note  #1 by the                                                                   
Department of Community & Economic Development.                                                                                 
                                                                                                                                
CS FOR SENATE BILL NO. 279(FIN)                                                                                               
                                                                                                                                
     An  Act authorizing  and  relating  to the  issuance  of                                                                   
     bonds  by the  Alaska  Housing Finance  Corporation  for                                                                   
     safe  and  clean  water  and  hygienic  sewage  disposal                                                                   
     facility  capital projects  and other capital  projects;                                                                   
     providing  for  the  repayment  of the  bonds  and  bond                                                                   
     costs;  relating to the  dividend paid  to the  state by                                                                   
     the Alaska  Housing Finance  Corporation; and  providing                                                                   
     for an effective date.                                                                                                     
                                                                                                                                
Representative Croft  MOVED to RESCIND previous  action taken                                                                   
on  failing to  advance  CS SB  279 (FIN).    There being  NO                                                                   
OBJECTION, the bill was before the Committee.                                                                                   
                                                                                                                                
Representative Croft  MOVED to ADOPT Amendment  #1.  Co-Chair                                                                   
Harris OBJECTED.                                                                                                                
                                                                                                                                
Representative Croft  stated that the amendment  addressed an                                                                   
important aspect of the Anchorage  Convention Center project.                                                                   
                                                                                                                                
Co-Chair Harris stated that the  amount of the Alaska Housing                                                                   
Finance Corporation  (AHFC) dividend authorized  for the year                                                                   
was $45 million dollars.                                                                                                        
                                                                                                                                
BRYAN BUTCHER,  LEGISLATIVE LIAISON,  ALASKA HOUSING  FINANCE                                                                   
CORPORATION,  DEPARTMENT OF  REVENUE, ANCHORAGE,  interjected                                                                   
that $103 million  dollars was the amount this  year and that                                                                   
the proposed number would come from that available amount.                                                                      
                                                                                                                                
Co-Chair Harris  inquired if the amount requested  would come                                                                   
from  that $5  million  dollars.   He asked  if  it would  be                                                                   
authorized to  move to the  Municipality of Anchorage  if the                                                                   
voters  approved  the Convention  Center  or  if that  amount                                                                   
would instead be used to purchase a parking garage.                                                                             
                                                                                                                                
Representative Croft  explained that the funds  would be used                                                                   
to  pay a  portion  of the  difference in  the  price of  the                                                                   
parking garage.   Vice-Chair  Meyer pointed  out that  if the                                                                   
Convention  Center  is  approved,  that there  are  two  lots                                                                   
currently  owned  by  the  State, which  could  be  used  for                                                                   
parking.  He  added that the developer is proposing  to build                                                                   
a new  parking  garage.   If the  voters do  not approve  the                                                                   
Convention Center, the request will go away.                                                                                    
                                                                                                                                
Co-Chair  Harris  requested  to   AMEND  Amendment  #1.    He                                                                   
referenced  the Harborview  Developmental  Center, which  has                                                                   
not been  used for a  long time.   The City needs  about $1.5                                                                   
million dollars  to take care  of that building.   He thought                                                                   
SB 279 could be  a vehicle to accommodate that  request.  Co-                                                                   
Chair Harris MOVED that the requested  amount of $1.5 million                                                                   
dollars  for the  purchase of  that facility  be placed  into                                                                   
Amendment #1.  Co-Chair Williams OBJECTED.                                                                                      
                                                                                                                                
Co-Chair Harris  countered that  he would remove  his request                                                                   
if Representative  Croft was willing to remove  Amendment #1.                                                                   
Representative Croft WITHDREW Amendment #1.                                                                                     
                                                                                                                                
Representative Foster MOVED to  report CS SB 279 (FIN) out of                                                                   
Committee.  Representative Hawker OBJECTED.                                                                                     
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR:      Meyer, Croft, Foster, Fate, Chenault, Harris,                                                                    
               Williams                                                                                                         
OPPOSED:       Hawker, Stoltze                                                                                                  
                                                                                                                                
Representative  Joule  and  Representative   Moses  were  not                                                                   
present for the vote.                                                                                                           
                                                                                                                                
The MOTION PASSED (7-2).                                                                                                        
                                                                                                                                
CS  SB  279   (FIN)  was  reported  out  of   Committee  with                                                                   
"individual"  recommendations and  with zero  note #3  by the                                                                   
Department of Revenue.                                                                                                          
                                                                                                                                
CS FOR SENATE BILL NO. 395(FIN) am                                                                                            
                                                                                                                                
     An Act  authorizing the  Alaska Railroad Corporation  to                                                                   
     extend  its  rail  line to  Fort  Greeley,  Alaska,  and                                                                   
     relating to that extension;  authorizing the corporation                                                                   
     to issue bonds to finance  the cost of the extension and                                                                   
     necessary  facilities  and  equipment; relating  to  the                                                                   
     Railroad  Planning, Platting,  and  Land Use  Regulation                                                                   
     Task Force; and providing for an effective date.                                                                           
                                                                                                                                
ZACK WARWICK, STAFF, SENATOR GENE  THERRIAULT, stated that SB                                                                   
395 contains two  provisions relating to the  Alaska Railroad                                                                   
Corporation  and  its  role as  a  State  transportation  and                                                                   
economic development agent.                                                                                                     
                                                                                                                                
SB 395  authorizes the Railroad  to issue up to  $500 mil1ion                                                                   
dollars  in tax-free  revenue bonds  to pay  for extending  a                                                                   
rail line  to Delta Junction and  Ft. Greeley.   The proposal                                                                   
would have the  bonds secured through federal  funds from the                                                                   
United  States   Department  of  Defense.     Depending  upon                                                                   
negotiations  with the Department,  the Railroad  could issue                                                                   
the bonds as early as 2005.                                                                                                     
                                                                                                                                
Mr. Warwick noted that SB 395  also addresses a recent Alaska                                                                   
Supreme  Court decision  that  has called  into question  the                                                                   
Railroad's   exemption  from   local   planning  and   zoning                                                                   
ordinances provided  in AS 42.40. The decision  jeopardizes a                                                                   
mode of operation  that has been in place since  the Railroad                                                                   
was  transferred  to the  State,  18  years  ago.   The  bill                                                                   
creates  a  task  force to  provide  recommendations  to  the                                                                   
Legislature in 2005  on whether and to what  extent municipal                                                                   
planning, platting  and land use regu1ations  should apply to                                                                   
interests in land  owned by the Alaska Railroad.   The Alaska                                                                   
Railroad  Corporation is  both an  interstate common  carrier                                                                   
and an instrumentality  of the State of A1aska.   Its mission                                                                   
is   to  provide   transportation   services  to   residents,                                                                   
businesses,  visitors  and  military   installations  in  the                                                                   
State, and foster  and promote long term economic  growth and                                                                   
development,  particularly of  the State's  land and  natural                                                                   
resources.    The  Railroad's   ability  to  operate  safely,                                                                   
efficiently  and effectively  is  due in  great  part to  the                                                                   
singular  nature of  the corridor.    The Railroad's  current                                                                   
track  alignment  passes  through   13  recognized  municipal                                                                   
governments between Seward and the North Pole.                                                                                  
                                                                                                                                
                                                                                                                                
Without  protection,   local  communities   could  separately                                                                   
dictate   planning  and   zoning   restrictions  that   would                                                                   
negatively  impact  the  Railroad's ability  to  offer  safe,                                                                   
efficient,  economical and  reliable service  to its  freight                                                                   
and  passenger customers.   Restrictions  would increase  the                                                                   
cost  of   operations,  impact   train  movements,   customer                                                                   
schedules, contract  commitments, and the amount  of business                                                                   
the Railroad could accommodate  each year due to decreased or                                                                   
varied hours of operation.  In  situations where the Railroad                                                                   
and a municipality are in agreement  on a planning and zoning                                                                   
issue,  an individual  or environmental  group  could file  a                                                                   
lawsuit  seeking  to overturn  the  municipality's  decision,                                                                   
which could further delay a project.                                                                                            
                                                                                                                                
Mr. Warwick  concluded that there  are other adverse  impacts                                                                   
that  could  arise  if  the Railroad  was  subject  to  local                                                                   
planning and zoning.  Inconsistent  regulation would decrease                                                                   
the  value   of  the   State's  considerable  investment   in                                                                   
purchasing  the Railroad.   It could  unreasonably delay  and                                                                   
add significant  cost  to the Railroad's  efforts to  improve                                                                   
the  transportation  infrastructure   of  the  State  through                                                                   
upgrades of existing track and facilities.                                                                                      
                                                                                                                                
While federal  law protects interstate commerce  from some of                                                                   
restrictions,  the issue  after  the Supreme  Court  decision                                                                   
invites litigation, which is not  only costly to the Railroad                                                                   
and  municipalities,   but  could   result  in   inconsistent                                                                   
holdings among  various jurisdictions.   Mr. Warwick  claimed                                                                   
that  the  Railroad  is  an essential  part  of  the  State's                                                                   
transportation network and serves  an important State mission                                                                   
and that  the State  should be the  entity that controls  the                                                                   
Railroad's use  land, not the 13 Railbelt  municipalities and                                                                   
boroughs.                                                                                                                       
                                                                                                                                
Representative Foster  pointed out that the  earlier bill had                                                                   
previously  received  some  "no" votes,  resulting  from  the                                                                   
Percentage  of Market  Value (POMV)  vote.   He asked if  new                                                                   
rules were being established.                                                                                                   
                                                                                                                                
Co-Chair  Harris MOVED  to report  CS SB 396  (FIN)am out  of                                                                   
Committee  with  individual  recommendations   and  with  the                                                                   
accompanying fiscal note.  Representative Foster OBJECTED.                                                                      
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR:      Chenault, Hawker, Meyer, Williams, Harris                                                                        
OPPOSED:       Stoltze, Foster                                                                                                  
                                                                                                                                
Representative  Moses, Representative  Croft,  Representative                                                                   
Joule and Representative Fate  were not present for the vote.                                                                   
                                                                                                                                
The MOTION FAILED (5-2).                                                                                                        
                                                                                                                                
Representative   Hawker   interjected   that   the   proposed                                                                   
legislation was a  revenue bond and that it  would not affect                                                                   
the general fund.                                                                                                               
                                                                                                                                
SB 395 was HELD in Committee.                                                                                                   
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 2:10 P.M.                                                                                          
                                                                                                                                
                                                                                                                                

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