Legislature(2005 - 2006)HOUSE FINANCE 519

04/18/2005 01:30 PM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ SB 51 PUBLIC ASSISTANCE PROGRAMS TELECONFERENCED
Moved Out of Committee
+ SB 93 FISHING PERMIT AND VESSEL LICENSE FEES TELECONFERENCED
Heard & Held
+ SB 155 APPROP: SCHOOLS/UNIV/VIROLOGY LAB/MUSEUM TELECONFERENCED
Heard & Held
Bills Previously Heard/Scheduled
                  HOUSE FINANCE COMMITTEE                                                                                       
                       April 18, 2005                                                                                           
                         1:46 p.m.                                                                                              
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Meyer called the House  Finance Committee meeting to                                                                   
order at 1:46:43 PM.                                                                                                          
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Mike Chenault, Co-Chair                                                                                          
Representative Kevin Meyer, Co-Chair                                                                                            
Representative Bill Stoltze, Vice-Chair                                                                                         
Representative Eric Croft                                                                                                       
Representative Richard Foster                                                                                                   
Representative Mike Hawker                                                                                                      
Representative Jim Holm                                                                                                         
Representative Reggie Joule                                                                                                     
Representative Mike Kelly                                                                                                       
Representative Carl Moses                                                                                                       
Representative Bruce Weyhrauch                                                                                                  
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Katherine Farnham, Division of  Public Assistance, Department                                                                   
of  Health  and Social  Services;  Ellie  Fitzgerald,  Chief,                                                                   
Policy   and   Program  Development,   Division   of   Public                                                                   
Assistance, Department of Health  and Social Services; Angela                                                                   
Salerno, Executive  Director, National Association  of Social                                                                   
Workers  Alaska Chapter;  Cheryl Sutton,  Staff, Senator  Ben                                                                   
Stevens;  Frank  Homan,  Commissioner,  Commercial  Fisheries                                                                   
Entry Commission;  Representative Paul Seaton;  Jerry McCune,                                                                   
United Fishermen  of Alaska;  Phelan Straube, Staff,  Senator                                                                   
Ben  Stevens;  Senator  Ben Stevens;  Eddy  Jeans,  Director,                                                                   
Education  Support  Services,  Department  of  Education  and                                                                   
Early Development                                                                                                               
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Don  Shircel,  Director  of Family  Services,  Tanana  Chiefs                                                                   
Conference; Ed Martin, Sr., Kenai;  Petria Falkenberg, Kenai,                                                                   
Red  Smith, Cooper  Landing;  Fred Sturnam,  Soldotna;  Rocky                                                                   
Frank, Anchor Point; James Price,  Nikiski; Ian Felton, Kenai                                                                   
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
CSSB 51(FIN)                                                                                                                    
          "An Act relating to  contracts for the provision of                                                                   
          state  public assistance  to certain recipients  in                                                                   
          the   state;   providing    for   regional   public                                                                   
          assistance   plans  and  programs  in   the  state;                                                                   
          relating   to  grants  for  Alaska   Native  family                                                                   
          assistance  programs;  relating  to  assignment  of                                                                   
          child  support by Alaska  Native family  assistance                                                                   
          recipients;  relating  to paternity  determinations                                                                   
          and   genetic  testing   involving  recipients   of                                                                   
          assistance  under Alaska  Native family  assistance                                                                   
          programs; and providing for an effective date."                                                                       
                                                                                                                                
          HCSSB 51  (FIN) was REPORTED out of  Committee with                                                                   
          a   "do   pass"  recommendation   and   with   four                                                                   
          Department  of Health  and  Social Services  fiscal                                                                   
          notes.                                                                                                                
                                                                                                                                
CSSB 93(FIN)                                                                                                                    
          "An Act  relating to commercial fishing  permit and                                                                   
          vessel   license  fees;   and   providing  for   an                                                                   
          effective date."                                                                                                      
                                                                                                                                
          CSSB 93  (FIN) was heard and HELD  in Committee for                                                                   
          further consideration.                                                                                                
                                                                                                                                
CSSB 155(FIN)                                                                                                                   
          "An  Act making  appropriations  from the  earnings                                                                   
          reserve account  for construction of  an integrated                                                                   
          science  complex  at the  University  of Alaska  in                                                                   
          Anchorage,   for   replacement  of   the   virology                                                                   
          laboratory  in  Fairbanks,  for  expansion  of  the                                                                   
          Anchorage Museum of  History and Art, for the major                                                                   
          maintenance  grant  fund,  and  for  other  capital                                                                   
          projects  related to  education; and providing  for                                                                   
          an effective date."                                                                                                   
                                                                                                                                
          HCSSB  155 (FIN)  was heard  and HELD in  Committee                                                                   
          for further consideration.                                                                                            
                                                                                                                                
1:47:30 PM                                                                                                                    
                                                                                                                                
CS FOR SENATE BILL NO. 51(FIN)                                                                                                
                                                                                                                                
     "An  Act  relating to  contracts  for the  provision  of                                                                   
     state  public assistance  to certain  recipients in  the                                                                   
     state;  providing for regional  public assistance  plans                                                                   
     and  programs  in  the state;  relating  to  grants  for                                                                   
     Alaska  Native family assistance  programs; relating  to                                                                   
     assignment  of child  support  by  Alaska Native  family                                                                   
     assistance    recipients;    relating    to    paternity                                                                   
     determinations and genetic  testing involving recipients                                                                   
     of  assistance  under Alaska  Native  family  assistance                                                                   
     programs; and providing for an effective date."                                                                            
                                                                                                                                
KATHERINE FARNHAM, DIVISION OF  PUBLIC ASSISTANCE, DEPARTMENT                                                                   
OF HEALTH AND SOCIAL SERVICES,  related the background of the                                                                   
Temporary  Assistance  for Native  Families  (TANF)  program.                                                                   
She  described  the results  of  the  Welfare to  Work  bill.                                                                   
Twelve   regional   native   non-profit   organizations   and                                                                   
Metlakatla  were  designated   to  run  temporary  assistance                                                                   
programs.   State funds  were made  available along  with the                                                                   
federal  funds.    She explained  the  Alaska  Native  Family                                                                   
Assistance Program  and the sunset  date.  SB 51  would allow                                                                   
this program  to become  permanent and  would expand  it from                                                                   
the four  initial organizations,  to the thirteen  designated                                                                   
by the  federal government. The  end results have  been great                                                                   
successes with a 66 percent caseload reduction.                                                                                 
                                                                                                                                
1:52:39 PM                                                                                                                    
                                                                                                                                
Ms. Farnham  addressed the fiscal  notes.  She  described the                                                                   
efforts  of Cook  Inlet Tribal  Council  to take  on 600  new                                                                   
families.   This would change  the funding scenario  starting                                                                   
July 1.  There would be a reduction  of $2 million in general                                                                   
fund match,  as well as  a reduction  of $2.8 million  in the                                                                   
federal receipt  authority.   She referred  to a chart  "FY06                                                                   
Budget  Impact for  State-CITC  Transfer",  which showed  the                                                                   
effects  of the fiscal  notes  (copy on file.)   The  federal                                                                   
share goes  directly to  Cook Inlet  and reduces the  state's                                                                   
federal  temporary assistance  receipts.   The  state has  to                                                                   
match 75 percent of the federal  block grant with maintenance                                                                   
of effort  general funds.   As the  federal floor  lowers, so                                                                   
does the state match.  She highlighted  the advantages of the                                                                   
Cook  Inlet  program.    Maniilaq   and  Bristol  Bay  Native                                                                   
Association  are   also  planning  to  start   up  their  own                                                                   
programs.  She urged passage of SB 51.                                                                                          
                                                                                                                                
1:57:19 PM                                                                                                                    
                                                                                                                                
Representative  Kelly noted that  tribal governments  are not                                                                   
recognized  in Alaska.   He asked  why they  are included  in                                                                   
this funding.  Ms. Farnham explained  that the language used,                                                                   
"tribal  TANF program",  is from  the federal  level, and  in                                                                   
Alaska they  are regional Native  non-profit programs.   Each                                                                   
receiving     grantee    waives     sovereignty     immunity.                                                                   
Representative  Kelly  asked  if  it  has no  impact  on  the                                                                   
sovereignty issue.  Ms. Farnham  replied yes.  Representative                                                                   
Kelly  suggesting  calling  them 501(c)(3)'s.    Ms.  Farnham                                                                   
replied that they are.  Representative  Kelly maintained that                                                                   
it is a misuse of federal language.   Ms. Farnham pointed out                                                                   
that in the  actual statutory language "regional  Native non-                                                                   
profits" is used.                                                                                                               
                                                                                                                                
2:00:33 PM                                                                                                                    
                                                                                                                                
Representative  Croft  stressed  that Alaska  does  recognize                                                                   
tribes, just not  as governmental entities, for  the purposes                                                                   
of receiving federal monies.   Representative Kelly expressed                                                                   
concern about allowing Indian  Reservations to be established                                                                   
in Alaska.                                                                                                                      
                                                                                                                                
2:02:20 PM                                                                                                                    
                                                                                                                                
Ms. Farnham noted that "tribal"  is used appropriately in the                                                                   
bill.                                                                                                                           
                                                                                                                                
Representative  Kelly  clarified that  he  is not  commenting                                                                   
negatively on the merits of the program.                                                                                        
                                                                                                                                
2:03:29 PM                                                                                                                    
                                                                                                                                
Representative  Holm   asked  why  Metlakatla   is  mentioned                                                                   
separately.    Ms.  Farnham  explained  that it  was  a  late                                                                   
addition to  the program.   She noted  that not all  regional                                                                   
non-profits have  the capacity  to participate in  a program.                                                                   
Representative  Holm  asked  if  Sealaska  Corporation  is  a                                                                   
participant.   She replied that  Tlingit & Haida  serves this                                                                   
area and  the state serves  Metlakatla.  Representative  Holm                                                                   
noted that Metlakatla is a federal reservation.                                                                                 
                                                                                                                                
2:05:33 PM                                                                                                                    
                                                                                                                                
In  response  to  a  question  from  Co-Chair  Chenault,  Ms.                                                                   
Farnham reported that "fair and  equitable" is a process that                                                                   
examines  caseloads for  what the state  currently spends  on                                                                   
those families  for work services,  child support, etc.   Co-                                                                   
Chair  Chenault  asked  if  that is  for  the  three  largest                                                                   
grantees.   Ms. Farnham replied  it is for the  three current                                                                   
grantees and  will be  used for Cook  Inlet, also.   Co-Chair                                                                   
Chenault  asked if  race is a  factor.   Ms. Farnham  replied                                                                   
that the  aim is to assure  that native nonprofits  can serve                                                                   
the families  in a way that is  at least as well  financed as                                                                   
when it was run by the state.                                                                                                   
                                                                                                                                
2:08:14 PM                                                                                                                    
                                                                                                                                
MOLLY  MERRITT DUREN,  EMPLOYMENT &  TRAINING SERVICES,  COOK                                                                   
INLET TRIBAL  COUNCIL  (CITC), pointed  out that her  program                                                                   
has been providing case management  services for eight years.                                                                   
She  referred  to the  handout  "Cook Inlet  Tribal  Council"                                                                   
(copy on file.)  She described  the reductions since the 1994                                                                   
caseload.  She related the mission  of the tribal council and                                                                   
the services they provide.  She  indicated that CITC is ready                                                                   
to assume this responsibility.                                                                                                  
                                                                                                                                
2:11:44 PM                                                                                                                    
                                                                                                                                
Representative  Hawker endorsed the  program and  thanked Ms.                                                                   
Merritt Duren for her hard work.                                                                                                
                                                                                                                                
2:12:34 PM                                                                                                                    
                                                                                                                                
DON  SHIRCEL,  DIRECTOR  OF FAMILY  SERVICES,  TANANA  CHIEFS                                                                   
CONFERENCE,  spoke with  pride  about the  work  done by  the                                                                   
tribes of  the interior.   He testified  in support of  SB 51                                                                   
because  it allows for  continuation and  expansion of  these                                                                   
programs.                                                                                                                       
                                                                                                                                
2:15:48 PM                                                                                                                    
                                                                                                                                
Co-Chair Chenault asked for an  explanation of fiscal note #1                                                                   
by  the  Department  of  Health  and  Social  Services.    He                                                                   
wondered  if some  of the money  is federal  money that  goes                                                                   
back to  the grant  recipient.  He  suggested there  might be                                                                   
general fund  savings.   He wondered  if any state  employees                                                                   
would be lost.                                                                                                                  
                                                                                                                                
2:17:40 PM                                                                                                                    
                                                                                                                                
Ms. Farnham responded that some  federal money is leaving the                                                                   
department's budget  and going directly  to Cook Inlet.   She                                                                   
explained  the   transfer  and  real  savings.     The  first                                                                   
component  is  the Native  Family  Assistant  Program,  which                                                                   
increases by  $4 million.  She  pointed out that  each fiscal                                                                   
note has a summary.                                                                                                             
                                                                                                                                
Ms. Farnham explained  that the second fiscal  note, the work                                                                   
services  component  related  to  case  management,  shows  a                                                                   
reduction of  $1.3 million because  of a move from  grants to                                                                   
contracts.                                                                                                                      
                                                                                                                                
Ms. Farnham explained  that the third fiscal  note relates to                                                                   
childcare  benefits.  It  will no  longer be spent  directly,                                                                   
but will be part  of the Cook Inlet program.   This note does                                                                   
the best  job of integrating the  whole story.  It  shows the                                                                   
reduction  of federal  receipts because  of high  performance                                                                   
success.  The match  is at 75 percent.  It  is a $5.7 million                                                                   
general fund reduction.                                                                                                         
                                                                                                                                
2:24:16 PM                                                                                                                    
                                                                                                                                
Representative  Croft questioned  that number.   Ms.  Farnham                                                                   
replied  that the  net  numbers show  that  the general  fund                                                                   
reduction is actually $2 million.   Cook Inlet is the largest                                                                   
one that  will be operating  this way.  Representative  Croft                                                                   
asked how the difference between  the $5.7 million and the $2                                                                   
million is reconciled.  Ms. Farnham  replied that the largest                                                                   
difference is that  $3.6 million is being transferred  to the                                                                   
native  family assistance  component.   Representative  Croft                                                                   
summarized that  it is not  a savings  of $5.7 million.   Ms.                                                                   
Farnham replied that the $2 million is the net savings.                                                                         
                                                                                                                                
Representative  Foster  asked  how  non-native  families  are                                                                   
served in rural  areas.  Ms. Farnham replied that  there is a                                                                   
contract to serve  both natives and non-natives.   She termed                                                                   
it valuable  to work with AVCP  as a partner.  This  may work                                                                   
for  Bristol Bay  as well.   Representative  Foster asked  if                                                                   
there is  an administrative  fee.   Ms. Farnham related  that                                                                   
there is an acceptable small fee.   It funds only two things:                                                                   
cash benefits to the family and administrative expenses.                                                                        
                                                                                                                                
2:28:16 PM                                                                                                                    
                                                                                                                                
Representative  Holm noted that  CITC numbers have  gone from                                                                   
1,000  to 600.   He  inquired  if there  is  true savings  in                                                                   
employment and  if those in  state employment  are considered                                                                   
unbiased and those  in corporations, biased.   He wondered if                                                                   
state  and  federal   funds  should  be  put   into  facility                                                                   
providers that would have a bias.   Ms. Farnham addressed the                                                                   
impact to  state workers.  She  reported that there  would be                                                                   
no reduction  in state  employees and  personnel.   Caseloads                                                                   
are changing  post-welfare reform  dramatically, and  a study                                                                   
needs to be done to track the  increases and decreases.  Some                                                                   
staff rearrangements  are being  considered.  The  department                                                                   
will do an analysis to better understand the trends.                                                                            
                                                                                                                                
Ms.  Farnham addressed  the fairness  issue.   She  explained                                                                   
that  native corporations  use multiple  funding strands  and                                                                   
focus  them on  the  family.   The  department  is trying  to                                                                   
integrate  services  more  like   Cook  Inlet.    The  native                                                                   
organizations  can provide  a more integrated  program.   The                                                                   
department is looking at marketing  family centered services.                                                                   
                                                                                                                                
2:35:23 PM                                                                                                                    
                                                                                                                                
Representative   Holm   expressed    appreciation   for   the                                                                   
presentation.   He addressed a  concern about an  increase in                                                                   
staff when services  are reduced.  Ms. Farnham  explained the                                                                   
success  of the  program depends  on taking  the savings  and                                                                   
putting  it back  into services.    Some of  the families  on                                                                   
public assistance  still have serious  needs, and at  the end                                                                   
of the 5-year time limit would  need more resources.  Another                                                                   
reason is  that the agency receiving  the funds can  use them                                                                   
in a variety of ways, some of which need more employers.                                                                        
                                                                                                                                
2:39:08 PM                                                                                                                    
                                                                                                                                
Representative  Kelly asked  whether a  person employed  in a                                                                   
job out  of the  region counts,  in areas  with a 50  percent                                                                   
unemployment rate.  Ms. Farnham  responded that employment is                                                                   
employment; the end game is employment  and self-sufficiency.                                                                   
Representative  Kelly asked for  statistics on  out-of-region                                                                   
jobs.  Ms. Farnham  said they are not tracked  once they exit                                                                   
the program and are employed.                                                                                                   
                                                                                                                                
2:41:37 PM                                                                                                                    
                                                                                                                                
ELLIE FITZGARRALD,  PROGRAM DEVELOPMENT,  DIVISION  OF PUBLIC                                                                   
ASSISTANCE,  DEPARTMENT   OF  HEALTH  AND   SOCIAL  SERVICES,                                                                   
explained the successes  of the Leaver's Study.   She related                                                                   
that there is no data kept after  six months.  Representative                                                                   
Kelly suggested those would be  interesting numbers to track.                                                                   
                                                                                                                                
2:43:05 PM                                                                                                                    
                                                                                                                                
Representative  Kelly  asked  about  the  permanence  of  the                                                                   
program.   He wondered if the  direction is wrong due  to the                                                                   
loss  of federal  funds.   Ms.  Farnham  clarified that  this                                                                   
federal  program is  not on  the  "down slope"  and has  wide                                                                   
national support.   She spoke about safeguards  and explained                                                                   
that Senate Finance  did add language to the  bill that would                                                                   
protect Alaska  from backfilling future holes.   She referred                                                                   
to  page 9,  line 19,  which addresses  this  concern.   Each                                                                   
grant  is  negotiated  annually,   and  the  program  is  not                                                                   
destined to be cut.                                                                                                             
                                                                                                                                
Representative   Foster  thanked   the  department   for  the                                                                   
presentation.   He  MOVED  to  report CSSB  51  (FIN) out  of                                                                   
Committee   with    individual   recommendations    and   the                                                                   
accompanying fiscal notes.                                                                                                      
                                                                                                                                
Representative  Kelly OBJECTED.   He explained that  he wants                                                                   
the  word  "tribal"  out  of   the  statutes.    Ms.  Farnham                                                                   
indicated that tribal is only  referenced in conjunction with                                                                   
the federal tribal assistance program.                                                                                          
                                                                                                                                
2:47:26 PM                                                                                                                    
                                                                                                                                
Representative Croft  noted that the 12 references  to tribal                                                                   
in the bill  are all in  the context of a  federally approved                                                                   
tribal family assistance program.                                                                                               
                                                                                                                                
Representative  Kelly   referred  to  page  3,   line  17,  a                                                                   
reference  to  operating a  tribal  assistance  program.   He                                                                   
suggested "federal"  should be added.  Ms.  Farnham explained                                                                   
the meaning of the line, noting that the intent is clear.                                                                       
                                                                                                                                
Representative  Foster  noted  that  it is  easy  to  confuse                                                                   
sovereign  and  tribal.    He  related  that  the  13  native                                                                   
corporations are tribal organizations.                                                                                          
                                                                                                                                
Representative Kelly WITHDREW  his objection.  There being NO                                                                   
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
2:50:16 PM                                                                                                                    
                                                                                                                                
At ease.                                                                                                                        
                                                                                                                                
2:52:03 PM                                                                                                                    
                                                                                                                                
CS FOR SENATE BILL NO. 93(FIN)                                                                                                
                                                                                                                                
     "An Act relating to commercial fishing permit and                                                                          
     vessel license fees; and providing for an effective                                                                        
     date."                                                                                                                     
                                                                                                                                
CHERYL  SUTTON, STAFF,  SENATOR BEN  STEVENS, explained  that                                                                   
the   bill   addresses   the   commercial   fisheries   entry                                                                   
commission,   which  is  fee-based   funded.    She   related                                                                   
contributing factors  which led up to the bill.   SB 93 would                                                                   
bring  the  state  into compliance  with  recent  rulings  in                                                                   
Carlson v. State of Alaska, raise  the $300 artificial cap on                                                                 
the  base  fee  for annual  permit  renewal  to  $3,000,  and                                                                   
charges a  non-resident fee differential  of $115  only once.                                                                   
She explained vessel license fees  as they are related to the                                                                   
various categories.                                                                                                             
                                                                                                                                
2:55:42 PM                                                                                                                    
                                                                                                                                
FRANK   HOMAN,  COMMISSIONER,   COMMERCIAL  FISHERIES   ENTRY                                                                   
COMMISSION, concurred  with Ms. Sutton's  testimony regarding                                                                   
the need  for the bill.   He noted that the  alternatives are                                                                   
not very good; to seek general funds or to reduce staff.                                                                        
                                                                                                                                
2:56:59 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Stoltze  asked  Commissioner   Homan  if  he  has                                                                   
thought   about   not  filling   a   commissioner   position.                                                                   
Commissioner Homan  responded that the commissioner's  salary                                                                   
at the limited entry commission are set in statute.                                                                             
                                                                                                                                
2:58:24 PM                                                                                                                    
                                                                                                                                
JERRY MCCUNE, UNITED FISHERMEN  OF ALASKA, stated support for                                                                   
the Alaska Commercial  Fisheries Entry Commission  (CFEC) and                                                                   
for the committee substitute for SB 93.                                                                                         
                                                                                                                                
3:00:19 PM                                                                                                                    
                                                                                                                                
Representative Weyhrauch MOVED to ADOPT Amendment 1:                                                                            
                                                                                                                                
     Page 2, lines 21 - 23:                                                                                                     
     Delete all material and insert:                                                                                            
               "(4)  over 75 feet  - 100 feet ............  225                                                                 
               (5)  over 100 feet  - 125 feet ............  300                                                                 
               (6)  over 125 feet  - 150 feet ............  375                                                                 
               (7)  over 150 feet  - 175 feet ............  450                                                                 
               (8)  over 175 feet  - 200 feet ............  525                                                                 
               (9)  over 200 feet  - 225 feet ............  600                                                                 
               (10)  over 225  feet - 250 feet ...........  675                                                                 
               (11)  over 250  feet - 275 feet ...........  750                                                                 
               (12)  over 275  feet - 300 feet ...........  825                                                                 
               (13)  over 300  feet ....................  900."                                                                 
                                                                                                                                
Vice-Chair Stoltze OBJECTED for the purpose of discussion.                                                                      
                                                                                                                                
REPRESENTATIVE PAUL SEATON, spoke  in support of Amendment 1,                                                                   
which  would  break  the fees  into  25-foot  categories  for                                                                   
smaller vessel levels.  It would  generate the same amount of                                                                   
money, but be more appropriate.                                                                                                 
                                                                                                                                
3:02:31 PM                                                                                                                    
                                                                                                                                
In   response   to  a   question   by   Vice-Chair   Stoltze,                                                                   
Representative  Seaton explained that  in the amendment  CFEC                                                                   
addressed his concern that appropriate  charges accompany the                                                                   
appropriate size of vessel.                                                                                                     
                                                                                                                                
3:04:13 PM                                                                                                                    
                                                                                                                                
Ms. Sutton spoke in opposition  to Amendment 1.  She observed                                                                   
that the bill is a compromise  between different areas of the                                                                   
state.                                                                                                                          
                                                                                                                                
Representative Weyhrauch  asked if there were  not some basis                                                                   
for size delineations.                                                                                                          
                                                                                                                                
Ms. Sutton noted that she did  not see the amendment prior to                                                                   
the meeting and the sponsor would not approve of it.                                                                            
                                                                                                                                
3:05:50 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer felt that the amendment has some merit.                                                                          
                                                                                                                                
Representative  Croft  summarized  that  the same  amount  of                                                                   
money  would be  raised, but  that  the fee  would be  tilted                                                                   
toward the larger vessels.  Representative  Seaton noted that                                                                   
the fee would  increase according to the size  of the vessel.                                                                   
The top fee would be $900.                                                                                                      
                                                                                                                                
3:08:18 PM                                                                                                                    
                                                                                                                                
Commissioner   Homan,   provided    information   about   the                                                                   
intention  of the  amendment.   He noted that  CSSB 93  (FIN)                                                                   
provides  a straight  20  percent  increase as  a  compromise                                                                   
between larger  and smaller vessels.   The amendment  changes                                                                   
the amount by  adding more categories, which  spreads out the                                                                   
costs.                                                                                                                          
                                                                                                                                
Mr. Homan explained that there  are more boats in the smaller                                                                   
fee categories.  He expressed  concern that the amendment not                                                                   
jeopardize the legislation.                                                                                                     
                                                                                                                                
3:11:04 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer questioned if the  smaller boats are generally                                                                   
owned by Alaskans  and the larger boats are  owned by out-of-                                                                   
state interests.  Mr. Homan confirmed that idea.                                                                                
                                                                                                                                
SB 93 was HELD in Committee for further consideration.                                                                          
                                                                                                                                
3:13:18 PM                                                                                                                    
                                                                                                                                
At ease.                                                                                                                        
                                                                                                                                
3:17:55 PM                                                                                                                    
                                                                                                                                
CS FOR SENATE BILL NO. 155(FIN)                                                                                               
                                                                                                                                
     "An Act making appropriations  from the earnings reserve                                                                   
     account  for  construction   of  an  integrated  science                                                                   
     complex at  the University  of Alaska in  Anchorage, for                                                                   
     replacement  of the  virology  laboratory in  Fairbanks,                                                                   
     for  expansion of  the Anchorage  Museum of History  and                                                                   
     Art,  for  the major  maintenance  grant  fund, and  for                                                                   
     other  capital   projects  related  to   education;  and                                                                   
     providing for an effective date."                                                                                          
                                                                                                                                
SENATOR  BEN STEVENS,  sponsor, explained  that SB  155 is  a                                                                   
one-time  appropriation bill  for major  projects across  the                                                                   
state.   The  bill retires  the  entire deferred  maintenance                                                                   
list of the  Department of Education and Childhood  and Early                                                                   
Development, $142  million for 70 projects across  the state.                                                                   
The  bill  funds   new  construction  of  schools   and  some                                                                   
rehabilitation projects.   The third  part of the  bill funds                                                                   
university  projects across the  state.   The fourth  part of                                                                   
the bill  appropriates money for  a museum in Anchorage.   He                                                                   
suggested  that  all  projects   are  a  lasting  investment,                                                                   
education-related,   and   affect   future   generations   of                                                                   
Alaskans.  He encouraged support of the bill.                                                                                   
                                                                                                                                
3:24:38 PM                                                                                                                    
                                                                                                                                
Co-Chair  Meyer spoke  about the  possibility  of adding  new                                                                   
funding amendments.   He asked  how flexible the  sponsor is.                                                                   
Senator Stevens  said the flexibility is contingent  upon the                                                                   
three criteria of the bill.  He  said he is opposed to a one-                                                                   
time debt service relief such  as the request from his school                                                                   
district.                                                                                                                       
                                                                                                                                
3:26:19 PM                                                                                                                    
                                                                                                                                
Representative  Hawker  applauded the  bill.    He asked  for                                                                   
comments  on  the  fund  source  and  the  impact  on  future                                                                   
permanent fund  dividends.  Senator  Stevens referred  to the                                                                   
last page  of a handout  by the  Department of Education  and                                                                   
Early  Development  on  the  Effect  of  "One-Time"  Earnings                                                                   
Reserve  Account Withdrawal  in  FY06 on  the Dividend  Check                                                                   
(copy on  file.)  He  stated that the  money he has  paid for                                                                   
education as a property tax owner  over 15 years has been ten                                                                   
times greater than the impact on future dividends.                                                                              
                                                                                                                                
Representative  Hawker summarized that  the cost  absorbed by                                                                   
individual Alaskans  over 15 years is $300.   Senator Stevens                                                                   
shared that that would be his  kindergarten son's impact.  He                                                                   
emphasized that it is well worth the effort.                                                                                    
                                                                                                                                
3:29:51 PM                                                                                                                    
                                                                                                                                
Representative  Croft  referred to  the  1999 permanent  fund                                                                   
vote and asked why the permanent  fund would be used now that                                                                   
oil is at $50 per barrel and there  is a great reserve in the                                                                   
government's  saving account.   Senator Stevens  related that                                                                   
the difference is that this is  a one-time source.  He opined                                                                   
that  "earnings  reserve  for government"  means  the  annual                                                                   
operation expenses  and a continuing fund source.   This bill                                                                   
is an  investment in  state assets, a  transfer of  an asset,                                                                   
not  expenditure.    He  implied   that  the  return  of  the                                                                   
investment  is non-tangible,  due  to the  savings in  school                                                                   
improvements and the benefits to students.                                                                                      
                                                                                                                                
3:32:53 PM                                                                                                                    
                                                                                                                                
Representative  Kelly   asked  what  chance  the   bill  has.                                                                   
Senator Stevens  replied "one  step at a  time".  He  said he                                                                   
hoped  there  is  enough  evidence   for  the  House  Finance                                                                   
Committee to consider this bill.                                                                                                
                                                                                                                                
3:34:34 PM                                                                                                                    
                                                                                                                                
Representative  Hawker requested  more  discussion about  the                                                                   
capital projects major maintenance list.                                                                                        
                                                                                                                                
Co-Chair Meyer inquired  if this bill is part  of the capital                                                                   
budget.   Senator Stevens replied it  is not, it is  a stand-                                                                   
alone appropriation.                                                                                                            
                                                                                                                                
3:36:18 PM                                                                                                                    
                                                                                                                                
Senator Stevens  referred to the Department of  Education and                                                                   
Early  Development  list  and  reported  that  there  are  71                                                                   
projects throughout  Alaska (copy on file.)   He related that                                                                   
it  would be  many  years before  so many  maintenance  needs                                                                   
would  surface  again.    Current  appropriation  bills  only                                                                   
address the top 20 projects.                                                                                                    
                                                                                                                                
3:38:34 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Stoltze stated  appreciation for  the efforts  of                                                                   
Senator Stevens.  He speculated  that the bill would not wipe                                                                   
out all  maintenance needs  and there  would be new  requests                                                                   
next  year.   Senator  Stevens  noted  that  in order  to  be                                                                   
eligible for this list, schools had to have a department-                                                                       
approved maintenance program.                                                                                                   
                                                                                                                                
Co-Chair  Meyer asked  if  some of  the  new school  projects                                                                   
could  be completed  with the  70/30 match.   He wondered  if                                                                   
this bill  would set  a precedent.   Senator Stevens  replied                                                                   
that  it was  not a  major consideration  when  the bill  was                                                                   
written.  He related a story about  his children, M & M's and                                                                   
issues of fairness.   He noted that the same  concept applies                                                                   
to this bill, which is an attempt to meet many needs.                                                                           
                                                                                                                                
3:43:44 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer noted that this is a bold bill.                                                                                  
                                                                                                                                
Representative Foster commented  that there is nothing in the                                                                   
capital budget for  his district.  He agreed with  the use of                                                                   
the funding source.   He repeated that his  district receives                                                                   
nothing.                                                                                                                        
                                                                                                                                
3:45:26 PM                                                                                                                    
                                                                                                                                
Senator Stevens  said that the  competition for  resources is                                                                   
fierce.   This bill  is an  attempt to  eliminate one  of the                                                                   
areas  of competition,  the deferred  maintenance  list.   He                                                                   
addressed whether  Alaska is benefiting in the  best way, the                                                                   
way the  fund is  currently being  managed.   He related  the                                                                   
history of  the fund  and the  how checks are  paid out.   He                                                                   
suggested  that the fund  is an  underutilized asset,  and it                                                                   
should  be   transferred  to   facilities  that   generate  a                                                                   
different type of return instead of a monetary return.                                                                          
                                                                                                                                
3:48:39 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer pointed out that  school maintenance is a good                                                                   
use for  these funds.   He questioned  if Amerada  Hess funds                                                                   
should be used  for these projects.  Senator  Stevens replied                                                                   
that the  Senate has not mingled  the two sources.   Co-Chair                                                                   
Meyer suggested that  is another funding source.   He implied                                                                   
that the Amerada Hess is also "dead money".                                                                                     
                                                                                                                                
3:50:55 PM                                                                                                                    
                                                                                                                                
Representative Weyhrauch  noted that the debate  on this bill                                                                   
is  a  tune up  for  future  debates  about  the use  of  the                                                                   
permanent fund.   He stated that he analyzes this  bill on an                                                                   
independent basis.   He opined that the most  valuable return                                                                   
on the investment is the contribution  that kids will make in                                                                   
the future.                                                                                                                     
                                                                                                                                
3:52:49 PM                                                                                                                    
                                                                                                                                
ED  MARTIN, SR.,  KENAI, opined  that  raiding the  permanent                                                                   
fund is against the Alaskan's  will, which was expressed by a                                                                   
statewide  vote in  1999.  He  suggested that  there is  very                                                                   
strong support  against the  bill.   He testified against  SB
155.                                                                                                                            
                                                                                                                                
3:55:43 PM                                                                                                                    
                                                                                                                                
PETRIA  FALKENBERG, KENAI,  spoke  in opposition  to HB  155.                                                                   
She  referenced   the  vote  in  1999  against   tapping  the                                                                   
permanent fund.  She shared details  of a recent survey where                                                                   
the majority voiced opinion against the bill.                                                                                   
                                                                                                                                
3:58:41 PM                                                                                                                    
                                                                                                                                
RED SMITH,  COOPER LANDING,  voiced concern  about using  the                                                                   
permanent  fund for  projects in  this bill.   He  maintained                                                                   
that the people own the fund.   He testified in opposition to                                                                   
HB 155.                                                                                                                         
                                                                                                                                
4:01:03 PM                                                                                                                    
                                                                                                                                
FRED STURNAM, SOLDOTNA, testified in opposition to HB 155.                                                                      
                                                                                                                                
4:03:17 PM                                                                                                                    
                                                                                                                                
JAMES PRICE, NIKISKI,  spoke in opposition to  HB 155 because                                                                   
the  people voted  not to  use  the permanent  fund for  this                                                                   
purpose.                                                                                                                        
                                                                                                                                
4:06:36 PM                                                                                                                    
                                                                                                                                
IAN FELTON, KENAI, testified in opposition to HB 155.                                                                           
                                                                                                                                
4:06:59 PM                                                                                                                    
                                                                                                                                
ROCKY  FRANK, ANCHOR  POINT, speaking  as  a senior  citizen,                                                                   
spoke in  opposition to HB 155.   He suggested giving  a one-                                                                   
time permanent fund payout.                                                                                                     
                                                                                                                                
4:09:08 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer closed public testimony.                                                                                         
                                                                                                                                
Co-Chair   Meyer  related  that   a  new   CS  for   SB  155,                                                                   
incorporating new amendments, would be drafted.                                                                                 
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 4:10 PM                                                                                            
                                                                                                                                
                                                                                                                                

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