Legislature(2009 - 2010)

04/16/2009 05:11 PM FIN


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                  HOUSE FINANCE COMMITTEE                                                                                       
                       April 16, 2009                                                                                           
                         5:11 p.m.                                                                                              
                                                                                                                                
5:11:35 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Hawker  called the  House Finance Committee  meeting                                                                   
to order at 5:11 p.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Mike Hawker, Co-Chair                                                                                            
Representative Bill Stoltze, Co-Chair                                                                                           
Representative Bill Thomas, Jr., Vice-Chair                                                                                     
Representative Allan Austerman                                                                                                  
Representative Harry Crawford                                                                                                   
Representative Anna Fairclough                                                                                                  
Representative Richard Foster                                                                                                   
Representative Les Gara                                                                                                         
Representative Reggie Joule                                                                                                     
Representative Mike Kelly                                                                                                       
Representative Woodie Salmon                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None.                                                                                                                           
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Representative   Jay   Ramras;   Representative   Bob   Lynn;                                                                   
Representative  Kurt  Olson;  Representative  Mike  Chenault;                                                                   
Marie Darlin,  AARP; Jane Pierson, Staff,  Representative Jay                                                                   
Ramras,   Sponsor;   Pat   Davidson,   Legislative   Auditor,                                                                   
Legislative  Audit  Division,   Legislative  Affairs  Agency;                                                                   
James Ellis,  Staff, Representative Mark Neuman;  James King,                                                                   
Director,   Division  of   Parks   and  Outdoor   Recreation,                                                                   
Department   of    Natural   Resources;   Michael    Fokerts,                                                                   
Recreational  Boating Safety  Specialist,  U.S. Coast  Guard;                                                                   
Senator  Joe Thomas;  Eddy Jeans,  Director, School  Finances                                                                   
and   Facilities,   Department   of   Education   and   Early                                                                   
Development;  Senator  Charlie  Huggins;  Linda  Zog,  Staff,                                                                   
Senator Bettye  Davis; Ginger  Blaisdell, Director,  Division                                                                   
of  Administrative  Services,  Department of  Revenue;  Peter                                                                   
Putzier,  Senior Assistant  Attorney  General, Department  of                                                                   
Law; Robert  W. Loescher, Tribal Judiciary  Committee Member,                                                                   
Central Council Tlingit & Haida  Indian Tribes of Alaska; Max                                                                   
Hensley,  Staff, Senator  Johnny Ellis;  Guy Bell,  Assistant                                                                   
Commissioner   and  Director,   Division  of   Administrative                                                                   
Services,  Department  of Labor  and  Workforce  Development;                                                                   
Jake  Hamburg,  Staff,  Senator   Joe  Paskvan;  Lynn  Smith,                                                                   
Division of  Corporation Licensing;  James Armstrong,  Staff,                                                                   
Co-Chair   Stoltze;  Karen  Rehfeld,   Director,  Office   of                                                                   
Management  and   Budget,  Office  of  the   Governor;  Larry                                                                   
Persily,   Staff,  Co-Chair   Hawker;   Joe  Balash,   Inter-                                                                   
Governmental  Coordinator, Department  of Natural  Resources;                                                                   
John Bitney, Staff, Speaker John Harris                                                                                         
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Dale  Fox,  President, CHARR,  Anchorage;  Robert  McCormick,                                                                   
Financial  Manager,  Glacier   Brew  House,  Anchorage;  Bill                                                                   
Bubbel, Pump  House Restaurant, Fairbanks; Jack  Amon, Owner,                                                                   
Marx  Brothers Café,  Fairbanks;  Bruce  Burnett, Self;  Fred                                                                   
Rosenberg,  Owner, Red  Robin,  Anchorage;  Bob Winn,  CHARR,                                                                   
Anchorage;  Trina Johnson, Owner,  LaMex, Anchorage;  Deborah                                                                   
O'Regan,  Alaska  Bar  Association;  Todd  Hindman,  Teacher,                                                                   
Anvil  City   Academy,  Nome;   Ray  DePriest,  Director   of                                                                   
Technical   Education,   MatSu  Schools;   Kiki   Abrahamson,                                                                   
President, Alaska Charter School Association                                                                                    
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
CSSB 1(FIN)    "An  Act increasing  the minimum hourly  wage;                                                                   
               and providing for an effective date."                                                                            
                                                                                                                                
               CSSB  1 (FIN)  was REPORTED  out of  Committee                                                                   
               with zero fiscal  note and the recommendations                                                                   
               of individual members.                                                                                           
                                                                                                                                
HB 50          "An Act relating to limitations on mandatory                                                                     
               overtime  for registered  nurses and  licensed                                                                   
               practical  nurses in  health care  facilities;                                                                   
               and providing for an effective date."                                                                            
                                                                                                                                
               HB 50  was HEARD and placed in  a Subcommittee                                                                   
               chaired   by  Representative   Stoltze,   with                                                                   
               members  Hawker,  Fairclough,  Joule,  Foster,                                                                   
               and Gara.                                                                                                        
                                                                                                                                
HB 88          "An Act extending the termination date of the                                                                    
               Board   of  Governors   of   the  Alaska   Bar                                                                   
               Association;  and providing  for an  effective                                                                   
               date."                                                                                                           
                                                                                                                                
               CSHB  88 (FIN) was  REPORTED out  of Committee                                                                   
               with   the  attached  zero  fiscal   note  the                                                                   
               recommendations of individual members.                                                                           
                                                                                                                                
HB 151         "An Act repealing the termination date of the                                                                    
               statewide   boating   safety   and   education                                                                   
               program;  providing for  an effective  date by                                                                   
               repealing  the effective  dates of secs.  3,5,                                                                   
               7, 9,  11, 14, 16,18, 20, 23, 26,  and 27, ch.                                                                   
               28, SLA  2000, and sec. 3, ch.  119, SLA 2003;                                                                   
               and providing for an effective date."                                                                            
                                                                                                                                
               CSHB 151  (FIN) was REPORTED out  of Committee                                                                   
               with  a "do  pass" recommendation  and with  a                                                                   
               new fiscal  note by the Department  of Natural                                                                   
               Resources.                                                                                                       
CSSB 57(FIN)   "An Act relating to charter and alternative                                                                      
               school funding."                                                                                                 
                                                                                                                                
               CSSB  57 (FIN) was  REPORTED out  of Committee                                                                   
               with  a  "do  pass"  recommendation  and  with                                                                   
               fiscal note #2  by the Department of Education                                                                   
               and Early Development.                                                                                           
                                                                                                                                
CSSB 96(FIN)   "An Act relating to nonpayment of child                                                                          
               support,   to  the  definition  of   the  term                                                                   
               "state"  for  the   purposes  of  the  Uniform                                                                   
               Interstate  Family  Support  Act,  to  certain                                                                   
               judicial   and   administrative   orders   for                                                                   
               medical  support   of  a  child,  to  periodic                                                                   
               review   and  adjustment   of  child   support                                                                   
               orders,  to relief  from administrative  child                                                                   
               support  orders, to child support  arrearages,                                                                   
               and  to medical  support  of a  child and  the                                                                   
               Alaska   Native  family  assistance   program;                                                                   
               amending  Rule  90.3,  Alaska Rules  of  Civil                                                                   
               Procedure;  and  providing  for  an  effective                                                                   
               date."                                                                                                           
                                                                                                                                
               HCS  CSSB   96  (FIN)  was  REPORTED   out  of                                                                   
               Committee with  a "do pass" recommendation and                                                                   
               with zero fiscal  note #1 by the Department of                                                                   
               Revenue.                                                                                                         
                                                                                                                                
CSSB 170(FIN) "An Act modifying the Alaska unemployment                                                                         
               insurance  statutes  by  redefining  the  base                                                                   
               period   for   determining   eligibility   for                                                                   
               unemployment     benefits;     relating     to                                                                   
               contributions,    interest,   penalties,   and                                                                   
               payments under  the Alaska Employment Security                                                                   
               Act; and providing for an effective date."                                                                       
                                                                                                                                
               CSSB 170  (FIN) was REPORTED out  of Committee                                                                   
               with  a "do  pass" recommendation  and with  a                                                                   
               new  zero  fiscal note  by  the Department  of                                                                   
               Labor and Workforce Development.                                                                                 
                                                                                                                                
CSSB 114(L&C) "An Act extending the termination date of the                                                                     
               State  Board of  Registration for  Architects,                                                                   
               Engineers,  and Land Surveyors;  extending the                                                                   
               term of a temporary  member of the State Board                                                                   
               of  Registration  for  Architects,  Engineers,                                                                   
               and  Land  Surveyors;  and  providing  for  an                                                                   
               effective date."                                                                                                 
                                                                                                                                
               CSSB 114  (L&C) was REPORTED out  of Committee                                                                   
               with a  "do pass" recommendation  and with and                                                                   
               with  fiscal  note  #1 by  the  Department  of                                                                   
               Commerce, Community  and Economic Development.                                                                   
                                                                                                                                
CSSB 75(FIN)   "An  Act making  and amending  appropriations,                                                                   
               including        capital       appropriations,                                                                   
               supplemental        appropriations,        and                                                                   
               appropriations   to   capitalize  funds;   and                                                                   
               providing for an effective date."                                                                                
                                                                                                                                
               CSSB 75 (FIN) was  HEARD and HELD in Committee                                                                   
               for further consideration.                                                                                       
                                                                                                                                
5:14:14 PM                                                                                                                    
                                                                                                                                
CS FOR SENATE BILL NO. 1(FIN)                                                                                                 
                                                                                                                                
     "An Act increasing the minimum hourly wage; and                                                                            
     providing for an effective date."                                                                                          
                                                                                                                                
Co-Chair  Hawker announced  that  public testimony  for SB  1                                                                   
would  commence.  He  felt  that   the  proposed  tip  credit                                                                   
amendment was appropriate for the legislation.                                                                                  
                                                                                                                                
MARIE DARLIN, AMERICAN ASSOCIATION  OF RETIRED PERSONS (AARP)                                                                   
CAPITAL CITY  TASK FORCE,  testified in favor  of SB 1.   She                                                                   
highlighted points  from the letter  submitted by  AARP (copy                                                                   
on file).  She expressed concern  for older Alaskans  working                                                                   
part-time   at  the   minimum  wage.   She  articulated   the                                                                   
importance  of  a  living  wage  for  elderly  Alaskans.  She                                                                   
pointed  out to  the  committee that  the  number of  elderly                                                                   
workers earning  the minimum  wage was  growing in  size, and                                                                   
that policies  should be implemented  to insure  that elderly                                                                   
employees  are  earning  enough  to  cover  essential  living                                                                   
expenses.                                                                                                                       
                                                                                                                                
5:18:27 PM                                                                                                                    
                                                                                                                                
DALE FOX,  PRESIDENT, ALASKA  CABARET, HOTEL, RESTAURANT  AND                                                                   
RETAILERS  ASSOCIATION   (CHARR),  ANCHORAGE   testified  via                                                                   
teleconference.  He stated  that CHARR  supports the  minimum                                                                   
wage   increase,   provided  the   legislation   includes   a                                                                   
comprehensive tip  credit proposal. He detailed  several ways                                                                   
in which  the tip credit  would help employers.  He explained                                                                   
that  the proposed  tip credit  would  provide incentives  to                                                                   
businesses   that   provide   an   environment   for   highly                                                                   
compensated  tipped  employees.  He  stressed  that  the  tip                                                                   
credit proposal  that CHARR  suggests differs from  similarly                                                                   
titled  laws in  other states.  For example,  the tip  credit                                                                   
proposed  by CHARR  would not  reduce  the tipped  employee's                                                                   
wage of  $7.25. The  tipped employee  would  need to make  at                                                                   
least $14.50  per hour in order  for the employer  to qualify                                                                   
for the credit.                                                                                                                 
                                                                                                                                
Co-Chair  Hawker  commented  that  the  legislature  was  not                                                                   
prepared  to   move  forward   on  the  CHARR   tip  proposal                                                                   
legislation.                                                                                                                    
                                                                                                                                
5:21:49 PM                                                                                                                    
                                                                                                                                
ROBERT MCCORMICK, FINANCIAL MANAGER,  GLACIER BREW HOUSE/ORSO                                                                   
RESTORANTE,  ANCHORAGE,  testified   via  teleconference.  He                                                                   
stated that  the majority of  his employees make  the minimum                                                                   
wage.  In addition  to paid  wages, the  employees also  earn                                                                   
tips. In  2008, tipped employees  averaged as much  as $13.99                                                                   
per hour  in tips. When added  to the average hourly  wage of                                                                   
$7.83, the total  hourly wage was 21.83. He  stated that only                                                                   
the highest  paid restaurant workers  would benefit  from the                                                                   
legislation.  He explained  that the tip  credit proposed  by                                                                   
CHARR  would affect  only persons  making $7.25  per hour  or                                                                   
more in tip  income.  He opined that the  restaurant industry                                                                   
has been  burdened by  challenges brought  on by the  current                                                                   
economic  crisis.  He  stressed  that  if  the  minimum  wage                                                                   
increase is  to be  considered it must  include a  tip credit                                                                   
amendment.                                                                                                                      
                                                                                                                                
5:24:57 PM                                                                                                                    
                                                                                                                                
Representative   Gara   shared   that   he   understood   the                                                                   
difficulties  faced by the  restaurant industry.  He reasoned                                                                   
that it made sense to adjust the  minimum wage to reflect the                                                                   
rising  cost  of   living.  He  noted  that   the  prices  on                                                                   
restaurant menus  have risen while  the wage paid  to servers                                                                   
has not.                                                                                                                        
                                                                                                                                
Mr. McCormick  contended that  the average percentage  tipped                                                                   
employees receive  for their service  is based on  sales, and                                                                   
therefore,  rises with  inflation.  He felt  that because  of                                                                   
this, the  raising of the  hourly wage would  be unnecessary.                                                                   
Representative Gara  asked if Mr. McCormick's  employees were                                                                   
currently making the  same wage of $7.15 per hour  now, as in                                                                   
2006. Mr. McCormick said that was correct.                                                                                      
                                                                                                                                
5:27:51 PM                                                                                                                    
                                                                                                                                
BILL  BUBBEL,   OWNER,  PUMP   HOUSE  RESTAURANT,   FAIRBANKS                                                                   
testified via teleconference.  He inquired about the proposed                                                                   
amount  of  the  minimum  wage  increase.    Co-Chair  Hawker                                                                   
replied that the legislation would  raise the minimum wage by                                                                   
$.50 after January 1, 2010.  Mr.  Bubbel felt that the amount                                                                   
was  acceptable. He  stressed  that Department  of Labor  and                                                                   
Workforce Development  (DOL) statistics, which  state that 22                                                                   
thousand Alaskans are currently  earning minimum wage, do not                                                                   
take  into  account  tipped  employees.   He  felt  that  the                                                                   
statistics  on restaurant  employee earnings  were flawed  in                                                                   
various ways.  He explained that  restaurant employers  pay a                                                                   
10  percent  tax on  employee  tips.  For example;  when  his                                                                   
employees  earn a total  of $400,000  a year  in tips,  he is                                                                   
responsible for paying  $40,000 in taxes on  those tips. This                                                                   
is comparable to  a yearly wage that he was unable  to pay to                                                                   
another employee.  The tip  credit is a  way to mitigate  the                                                                   
extra  expense to  employers.  He expressed  concern for  the                                                                   
possibility of a financially unsuccessful  tourist season. He                                                                   
reiterated  Mr. McCormick's  rhetoric about  the rise  of tip                                                                   
percentage with inflation.                                                                                                      
                                                                                                                                
5:32:40 PM                                                                                                                    
                                                                                                                                
JACK  AMON, OWNER,  MARX BROTHERS  CAFÉ, ANCHORAGE  testified                                                                   
via  teleconference.   He  stressed   that  most   restaurant                                                                   
employees already  make well over the minimum  wage. He added                                                                   
that for all  financial purposes, tipped earnings  are wages.                                                                   
He shared  that he average  earnings for tipped  employees in                                                                   
the restaurant industry  are $25,000 to $40,000  per year. He                                                                   
stated that the  structure of minimum wage laws  in the state                                                                   
unfairly  restrict  the restaurant  industry  from  receiving                                                                   
compensation for  tipped employees.  He felt that  the intent                                                                   
of the bill was unfair and contrary to law.                                                                                     
                                                                                                                                
5:34:42 PM                                                                                                                    
                                                                                                                                
Representative  Gara pointed  out that  the minimum  wage has                                                                   
not gone up in  six years.  Mr. Amon questioned  the logic of                                                                   
forcing  the restaurant  industry  to  pay a  higher  minimum                                                                   
wage.  Representative  Gara  countered   that  only  the  tip                                                                   
portion of the employee salary has risen with inflation.                                                                        
                                                                                                                                
5:36:07 PM                                                                                                                    
                                                                                                                                
BRUCE BURNETT,  OWNER, TGIFRIDAYS,  ANCHORAGE, testified  via                                                                   
teleconference.  He stated  that none  of his employees  make                                                                   
less than  $9.00 per  hour. He said  that the bartenders  and                                                                   
waiters that  work for  him make $30.00  to $40.00  per hour,                                                                   
including  tips. He  felt  the tip  credit  was necessary  to                                                                   
balance a raise in the minimum wage.                                                                                            
                                                                                                                                
5:39:24 PM                                                                                                                    
                                                                                                                                
Representative Kelly summarized  that Mr. Burnett didn't want                                                                   
the  government  controlling  employer  ability  to  set  pay                                                                   
scales  for their establishments.  Mr.  Burnett felt  that he                                                                   
amount employers would be asked  to spend on the raises could                                                                   
be excessive.                                                                                                                   
                                                                                                                                
5:40:57 PM                                                                                                                    
                                                                                                                                
FRED  ROSENBERG, OWNER,  RED ROBIN,  ANCHORAGE testified  via                                                                   
teleconference.  He echoed the  previous testimony.  He spoke                                                                   
in support  of raising the  minimum wage, but  emphasized the                                                                   
need for  a tip credit. He  said that the federal  government                                                                   
recognizes  all wages  as income. Waiters  in his  restaurant                                                                   
average $22 per  hour in reported tip income,  in addition to                                                                   
the hourly wage. The tip credit  is recognized in forty-three                                                                   
states across the country as way  to balance the wages of all                                                                   
restaurant employees.  It provides  the employers with  a way                                                                   
to pay non tipped employees a comparable wage.                                                                                  
                                                                                                                                
5:44:12 PM                                                                                                                    
                                                                                                                                
BOB  WINN,  CHARR, ANCHORAGE  testified  via  teleconference,                                                                   
agreed  with the  previous testimony.  He felt  that the  tip                                                                   
credit  was   crucial  to  ensure   the  survival   of  small                                                                   
businesses in the current economic climate.                                                                                     
                                                                                                                                
Representative Gara commented  that as a restaurant owner, he                                                                   
is  aware  that  restaurant profit  margins  are  not  large;                                                                   
however,  as  a  policy  maker,  he  is  advocating  for  the                                                                   
employee.                                                                                                                       
                                                                                                                                
5:47:45 PM                                                                                                                    
                                                                                                                                
TRINA  JOHNSON,   OWNER,  LAMEX,   ANCHORAGE  testified   via                                                                   
teleconference.  She  agreed with  the  previous  testifiers.                                                                   
She shared  her experience  in the  restaurant industry.  She                                                                   
said that the minimum wage increase  of five years ago forced                                                                   
her  to close  one  of her  restaurants.  She  referred to  a                                                                   
letter she  submitted to  the committee  (copy of file).  She                                                                   
related that  she no longer is  able to provide  any benefits                                                                   
to her  employees. She testified  strongly in support  of the                                                                   
addition of a tip credit to the legislation.                                                                                    
                                                                                                                                
5:51:23 PM                                                                                                                    
                                                                                                                                
Co-Chair  Hawker solicited  further  public testimony.  There                                                                   
being none, public testimony was closed.                                                                                        
                                                                                                                                
Representative  Gara   shared  his  decision  not   to  offer                                                                   
Amendment 2, which  had been handed out to  the committee for                                                                   
discussion. He  referred to  the Legislative Research  Report                                                                   
on the  deletion of the  inflation proofing provision  on the                                                                   
minimum  wage (copy  on file).  He explained  that under  the                                                                   
Murkowski  administration  the inflation  proofing  provision                                                                   
was deleted from the minimum wage,  stalling the minimum wage                                                                   
at  $7.15  per  hour. Had  the  provision  remained  and  the                                                                   
minimum wage  kept up  with inflation it  would now  be $8.50                                                                   
per hour.  He maintained that  there would be  no significant                                                                   
employee  impact if  wages were  raised a maximum  of 10  per                                                                   
cent a year.  He spoke in  favor of raising the  minimum wage                                                                   
to  make  up  for the  inflation  losses  that  workers  have                                                                   
incurred since  2003. The amendment would have  increased the                                                                   
minimum wage  by 70 cents per  year for the next 2  years. He                                                                   
pointed out that 10,000 people  earn less than $8 per hour in                                                                   
the state. He  thought fair pay for hard work  was important.                                                                   
He  related  that   the  wage  increase  was   necessary  for                                                                   
employees that might not be courageous  enough to demand wage                                                                   
increases,  which are  necessary to  offset the  rise in  the                                                                   
cost of living.                                                                                                                 
                                                                                                                                
5:54:51 PM                                                                                                                    
                                                                                                                                
Representative  Fairclough  voiced  support for  the  minimum                                                                   
wage   increase.   She   requested  an   expansion   of   the                                                                   
conversation to include global  business issues. She informed                                                                   
the committee  that the United  States is currently  indebted                                                                   
to  China  for  $3 trillion.  She  asserted  that  people  in                                                                   
America  can't  afford to  buy  American made  products.  She                                                                   
stressed that  increasing labor  costs would force  companies                                                                   
to raise  prices on  goods and  services. She emphasized  the                                                                   
importance  of  supporting a  tip  credit  in order  to  save                                                                   
American jobs.   She felt the minimum wage  increase, without                                                                   
the tip credit, was inappropriate  given the current economic                                                                   
climate.                                                                                                                        
                                                                                                                                
5:58:24 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Thomas spoke  of his experience  as a  commercial                                                                   
fisherman. He felt with the current  price of fish being low,                                                                   
an increase  in the  minimum wage  could harm the  commercial                                                                   
fishing industry.  He expressed  alarm that 10,000  people in                                                                   
the state  were making  less than  minimum wage. He  asserted                                                                   
that DOL distributes  a substantial amount of  money to train                                                                   
Alaskans  for  jobs  that  pay above  the  minimum  wage  and                                                                   
wondered  why   there  were  so   many  low  paid   residents                                                                   
throughout the state.                                                                                                           
                                                                                                                                
6:00:25 PM                                                                                                                    
                                                                                                                                
Representative  Crawford  commented  that the  proposed  $.50                                                                   
rise of  the minimum  wage was inadequate.  He felt  that the                                                                   
lack of  benefits and  low wages  presented to the  workforce                                                                   
were appalling. He spoke against  the tip credit and stressed                                                                   
that the minimum wage should be  higher. He also stressed the                                                                   
need  for employees  to  receive  health care  benefits  from                                                                   
their   employers.   He  expressed   frustration   with   the                                                                   
legislation.                                                                                                                    
                                                                                                                                
6:03:43 PM                                                                                                                    
                                                                                                                                
Co-Chair  Hawker referred  to a document  distributed  to the                                                                   
committee   by   Representative   Gara's   office   entitled,                                                                   
"Estimate  Alaska  2007  Employment  by  Industry  and  Below                                                                   
Certain Wages" (copy on file).  The numbers, provided by DOL,                                                                   
show  that approximately  9,000  workers  in  the state  earn                                                                   
$7.75 per hour. About 22,000 earn less than $8.75 per hour.                                                                     
                                                                                                                                
Representative  Gara commented that  Alaska used to  have the                                                                   
highest minimum wage  in the country, and now  has the lowest                                                                   
minimum wage on the West Coast.                                                                                                 
                                                                                                                                
Vice-Chair Thomas requested that  DOL provide a report on how                                                                   
many of  Alaska's unemployed  workers  have been offered  job                                                                   
training.                                                                                                                       
                                                                                                                                
6:05:23 PM                                                                                                                    
                                                                                                                                
Co-Chair Hawker  noted the zero  fiscal note represented  the                                                                   
impact  to the  State  of Alaska  as an  entity,  but not  to                                                                   
private employers.                                                                                                              
                                                                                                                                
6:05:31 PM                                                                                                                    
                                                                                                                                
Representative  Kelly expressed  disappointed that  there had                                                                   
not been  more support  for including the  tip credit  in the                                                                   
legislation.                                                                                                                    
                                                                                                                                
Vice-Chair  Thomas MOVED to  report CSSB  1 out of  Committee                                                                   
with individual  recommendations and the  accompanying fiscal                                                                   
note.  There being NO OBJECTION, it was so ordered.                                                                             
                                                                                                                                
CSSB 1 (FIN) was REPORTED out  of Committee with the attached                                                                   
zero  fiscal  note  and  the  recommendations  of  individual                                                                   
members.                                                                                                                        
                                                                                                                                
6:07:36 PM                                                                                                                    
                                                                                                                                
HOUSE BILL NO. 88                                                                                                             
                                                                                                                                
     "An Act extending the termination date of the Board of                                                                     
     Governors of the Alaska Bar Association; and providing                                                                     
     for an effective date."                                                                                                    
                                                                                                                                
Vice-Chair Thomas MOVED to adopt  CS for HB 88, 26-LS410\R as                                                                   
a  working document.  There  being NO  OBJECTION,  it was  so                                                                   
ordered.                                                                                                                        
                                                                                                                                
6:08:37 PM                                                                                                                    
                                                                                                                                
JANE  PIERSON,  STAFF, REPRESENTATIVE  JAY  RAMRAS,  SPONSOR,                                                                   
explained that the bill would  extend the termination date of                                                                   
the Board of Governors of the  Alaska Bar Association to June                                                                   
30,  2013. She  informed the  committee that  the Alaska  Bar                                                                   
Association  was   established  in  1955.  The   two  primary                                                                   
functions  of the association  are to  screen applicants  for                                                                   
admission,  and   to  provide  discipline   by  investigating                                                                   
grievances against  members of the bar. The  association also                                                                   
provides  classes  for  continuing  legal  education,  lawyer                                                                   
referral   service,  pro-bono   services,   and  lawyer   fee                                                                   
arbitration.  The  board consists  of  12 members;  nine  are                                                                   
attorney  members, elected  by the active  membership  of the                                                                   
Bar  Association,  three  are  non-attorney  public  members,                                                                   
elected  by the governor  and confirmed  by the  legislature.                                                                   
The Division of  Legislative Budget & Audit  (LB&A) concluded                                                                   
in a  November 4,  2008 report  that the  board, through  the                                                                   
Alaska  Supreme  Court,  protects   the  public  by  insuring                                                                   
persons licensed to practice law  are qualified, and provides                                                                   
for   the   investigation   of   complaints.   The   division                                                                   
recommended the termination of  the board be extended to June                                                                   
30, 2017.  The board  is scheduled to  terminate on  June 30,                                                                   
2009.  Upon termination,  the board  would have  one year  to                                                                   
conclude its administrative operations.                                                                                         
                                                                                                                                
6:10:51 PM                                                                                                                    
                                                                                                                                
PAT   DAVIDSON,  LEGISLATIVE   AUDITOR,   LEGISLATIVE   AUDIT                                                                   
DIVISION,   LEGISLATIVE   AFFAIRS   AGENCY,   explained   the                                                                   
extension audit  was conducted as  required by statute.   The                                                                   
division recommended that the  board be extended for the next                                                                   
eight years.  Since the audit,  conducted two years  ago, the                                                                   
bar  dues have  been  reduced from  $550.00  to $410.00.  The                                                                   
audit recommended  mandatory continuing  legal education  for                                                                   
members. Another prior recommendation  included improving the                                                                   
association's   website   to  make   discipline   information                                                                   
regarding  attorneys available  to  the  general public.  The                                                                   
division  also recommended  amending the  bar bylaws  to meet                                                                   
public notice requirements.                                                                                                     
                                                                                                                                
6:12:47 PM                                                                                                                    
                                                                                                                                
Co-Chair Hawker opened public testimony.                                                                                        
                                                                                                                                
DEBORAH  O'REGAN,   ALASKA  BAR  ASSOCIATION   testified  via                                                                   
teleconference.  She offered to  stay online to  be available                                                                   
to answer questions.                                                                                                            
                                                                                                                                
Co-Chair Hawker closed public testimony.                                                                                        
                                                                                                                                
6:14:02 PM                                                                                                                    
                                                                                                                                
Co-Chair Hawker addressed the zero fiscal note.                                                                                 
                                                                                                                                
Representative Foster  referred to page  3 of the  Alaska Bar                                                                   
Association 2007  Annual Report (copy on file).  He asked how                                                                   
many lawyers were members of the  Alaska Bar Association. Co-                                                                   
Chair  Hawker  understood  that  Anchorage  had  the  highest                                                                   
number of lawyers per capita of any city in America.                                                                            
                                                                                                                                
Ms. O'Regan reported that there  are 38,000 members of Alaska                                                                   
Bar  Association.   Of  those, 1000  are  either inactive  or                                                                   
outside the state. This brings  the total of in-state members                                                                   
to 28,000.                                                                                                                      
                                                                                                                                
6:15:39 PM                                                                                                                    
                                                                                                                                
Vice-Chair Thomas MOVED to report  CSHB 88, 26-LS0410\R (FIN)                                                                   
out  of Committee  with  individual recommendations  and  the                                                                   
accompanying fiscal  note.  There being NO  OBJECTION, it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
CSHB  88  (FIN)  was  REPORTED  out  of  Committee  with  the                                                                   
attached zero  fiscal note the recommendations  of individual                                                                   
members.                                                                                                                        
                                                                                                                                
6:16:21 PM                                                                                                                    
                                                                                                                                
HOUSE BILL NO. 151                                                                                                            
                                                                                                                                
     "An Act repealing the termination  date of the statewide                                                                   
     boating safety  and education program; providing  for an                                                                   
     effective  date  by  repealing the  effective  dates  of                                                                   
     secs. 3,  5, 7, 9, 11, 14,  16, 18, 20, 23, 26,  and 27,                                                                   
     ch. 28,  SLA 2000, and  sec. 3,  ch. 119, SLA  2003; and                                                                   
     providing for an effective date."                                                                                          
                                                                                                                                
JAMES  ELLIS, STAFF,  REPRESENTATIVE  MARK NEUMAN,  explained                                                                   
that the bill  would extend the sunset date  of the Statewide                                                                   
Boating  Safety  and  Education   Program.  The  program  has                                                                   
reduced boating  related deaths  in the  state by 20  percent                                                                   
since 2000. Timely expedition  of the legislation would allow                                                                   
the state to receive federal funding.                                                                                           
                                                                                                                                
6:17:46 PM                                                                                                                    
                                                                                                                                
Co-Chair Hawker  noted that the  original bill had  asked for                                                                   
the sunset  date to be extended  through 2018.  The potential                                                                   
CS  for  HB  151 provides  a  one-year  extension,  with  the                                                                   
intention of  revisiting the issue  during the  2010 session.                                                                   
He  wondered   if  the  sponsor  was  comfortable   with  the                                                                   
compromise. Mr. Ellis replied in the affirmative.                                                                               
                                                                                                                                
6:18:38 PM                                                                                                                    
                                                                                                                                
JAMES  KING,   DIRECTOR,  DIVISION   OF  PARKS  AND   OUTDOOR                                                                   
RECREATION, DEPARTMENT OF NATURAL  RESOURCES, highlighted the                                                                   
importance of  the Kids Don't  Float program. He  shared that                                                                   
the Boating  Safety and  Education program  has been  a major                                                                   
contributor  to the  514 life-jacket  loaner  boards, in  153                                                                   
communities,  throughout  the  state. The  Kids  Don't  Float                                                                   
program  has provided  education  to  over 63,000  people  in                                                                   
communities  all across  the state. Mr.  King detailed  other                                                                   
educational programs  that benefit  under the Boating  Safety                                                                   
and  Education  Program. He  stated  that since  the  program                                                                   
began, recreational  boating fatalities  have declined  by 20                                                                   
percent.  He   emphasized  his  support  for   the  one  year                                                                   
extension.                                                                                                                      
                                                                                                                                
6:21:02 PM                                                                                                                    
                                                                                                                                
Co-Chair  Stoltze  moved  to adopt  the  CS  for HB  151  26-                                                                   
LSO422\P as  a working document.   There being  NO OBJECTION,                                                                   
it was so ordered.                                                                                                              
                                                                                                                                
6:21:35 PM                                                                                                                    
                                                                                                                                
MICHAEL  FOKERTS,  RECREATIONAL  BOATING  SAFETY  SPECIALIST,                                                                   
U.S. COAST GUARD,  read from the White Paper  (copy on file).                                                                   
He testified that  the Coast Guard, through  the Secretary of                                                                   
Homeland  Security,  is  directed  to carry  out  a  national                                                                   
recreational  boating  safety program  under  chapter 131  of                                                                   
title 46 of the  United States Code. The goal  of the program                                                                   
is to  encourage states to assume  the role in  assisting and                                                                   
enforcing the  carrying out of  boating safety  education and                                                                   
activities. Under this program  the Coast Guard allocates and                                                                   
distributes funds to eligible  states to assist in developing                                                                   
and implementing  boating safety programs.  Federal financial                                                                   
assistance is provided through  the Boating Safety account of                                                                   
the Aquatic  Resources Trust  Fund, also  known as  the Sport                                                                   
Fish  Restoration  and Boating  Trust  Fund.  Alaska met  the                                                                   
eligibility requirements  to receive  the funds in  2000 with                                                                   
the passing  of HB  108, the Alaska  Boating Safety  Act. The                                                                   
Alaska Boating  and Safety Program is funded  almost entirely                                                                   
by the federal  grant. The program has now been  in place for                                                                   
nearly ten years. Under the program  recreational boaters are                                                                   
safer  and   more  educated   and  boating  fatalities   have                                                                   
declined. He  relayed that the  Coast Guard will  continue to                                                                   
maintain a working relationship with the state.                                                                                 
                                                                                                                                
Co-Chair Hawker solicited further testimony.                                                                                    
                                                                                                                                
JEFF  JOHNSON,  BOATING  LAW   ADMINISTRATOR,  DEPARTMENT  OF                                                                   
NATURAL RESOURCES  (DNR), was available,  via teleconference,                                                                   
for questions.                                                                                                                  
                                                                                                                                
Representative Foster commended DNR for their good work.                                                                        
                                                                                                                                
Co-Chair Hawker closed public testimony.                                                                                        
                                                                                                                                
6:25:19 PM                                                                                                                    
                                                                                                                                
Representative Joule  spoke in support of the  bill. He hoped                                                                   
the program would help provide  closure for mourning families                                                                   
by aiding in the quick recovery of drowning victims.                                                                            
                                                                                                                                
Vice-Chair Thomas  remarked that he had seen  the Kid's Don't                                                                   
Float program working in action.  He asserted there should be                                                                   
a similar program for adults.                                                                                                   
                                                                                                                                
Co-Chair Hawker noted the one  year sunset from June 30, 2010                                                                   
to June 30, 2011. He pointed out  to the committee the fiscal                                                                   
note showing  an additional  expenditure  needed in 2010.  He                                                                   
asked if the fiscal note was in  the 2010 budget or if it was                                                                   
an  incremental.  Mr.  King  replied  that  the  fiscal  note                                                                   
reflected  boat registration  fees. He  said that those  fees                                                                   
would   be  for   2010.   Co-Chair   Hawker   asked  if   the                                                                   
appropriations and  capital expenditures were already  in the                                                                   
2010 budget.  He added that  the note reflected  inter-agency                                                                   
receipts being  spent for personal  services. He  wondered if                                                                   
the expenditures  were already in  the 2010 budget.  Mr. King                                                                   
replied in  the affirmative.  Co-Chair Hawker clarified  that                                                                   
it  was not  an  incremental fiscal  note.  He  asked if  the                                                                   
capital expenditure was already  in the 2010 budget. Mr. King                                                                   
replied that the  division receives a federal  grant and that                                                                   
the receipt authority for that grant is in the 2010 budget.                                                                     
Co-Chair Hawker summarized that  the division has the amounts                                                                   
already in the budget and that  the fiscal note was presented                                                                   
for  information purposes  only.  He asked  the committee  to                                                                   
forward the  bill with  the zero fiscal  note to  prevent the                                                                   
duplication  of authority.  Mr.  King requested  confirmation                                                                   
from Mr. Johnson.                                                                                                               
                                                                                                                                
Mr. Johnson stated  that it was a continuation  of the budget                                                                   
that has always existed. He said  that it varies from year to                                                                   
year, but that  the department was in the capital  budget for                                                                   
the specified amount.                                                                                                           
                                                                                                                                
6:29:30 PM                                                                                                                    
                                                                                                                                
Co-Chair Hawker  MOVED to  change the fiscal  note to  show a                                                                   
zero  appropriation   in  FY   2010,  leaving  in   what  the                                                                   
department already  has budgeted.  There being  NO OBJECTION,                                                                   
it was so ordered.                                                                                                              
                                                                                                                                
Co-Chair  Stoltze commented  on  the dissimilarities  between                                                                   
the federal and state fiscal year,  and recognized this could                                                                   
pose  a problem  when applying  for federal  grants. He  said                                                                   
that he had drafted the CS for  the one year sunset extension                                                                   
with  the intention  of  examining  the complexities  of  the                                                                   
program.  He mentioned  his concerns with  the regulation  of                                                                   
responsible  adults and  DNR bureaucrats  and hoped  that the                                                                   
bill would reflect  the ways in which Alaskans  could benefit                                                                   
from their own natural resources.                                                                                               
                                                                                                                                
                                                                                                                                
Co-Chair  Stoltze  MOVED to  report  CSHB  151 (FIN)  out  of                                                                   
Committee   with    individual   recommendations    and   the                                                                   
accompanying fiscal  note. There  being NO OBJECTION,  it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
CSHB  151 (FIN)  was REPORTED  out  of Committee  with a  "do                                                                   
pass"  recommendation  and with  a  new  fiscal note  by  the                                                                   
Department of Natural Resources.                                                                                                
                                                                                                                                
6:35:01 PM                                                                                                                    
Representative  Foster wondered  about school involvement  in                                                                   
the  Kid's Don't  Float program.  Mr. King  replied that  the                                                                   
program  was  taught  in schools  throughout  the  state.  He                                                                   
stressed that the  effort to educate children  is an absolute                                                                   
priority.                                                                                                                       
                                                                                                                                
CS FOR SENATE BILL NO. 57(FIN)                                                                                                
                                                                                                                                
     "An Act relating to charter and alternative school                                                                         
     funding."                                                                                                                  
                                                                                                                                
6:36:20 PM                                                                                                                    
                                                                                                                                
SENATOR JOE THOMAS, SPONSOR, read  from the Sponsor Statement                                                                   
(Copy on File).  He explained that the legislation  was about                                                                   
supporting school choice by extinguishing  the charter school                                                                   
penalty. He shared  that charter schools are  public schools,                                                                   
open to  all children  free of  charge. Charter Schools  must                                                                   
comply with state  laws and employ state  certified teachers,                                                                   
who  are  employees  of  their  local  school  district.  The                                                                   
schools are managed by a parent-  teacher board of directors,                                                                   
which  determine  school  curriculum  and  teaching  methods,                                                                   
within the guidelines  of state statute. Current  law results                                                                   
in carter schools  with fewer than 150 students  receiving 30                                                                   
to 45  percent less state  funding than neighborhood  schools                                                                   
of  comparable  size. He  referred  to the  chart,  "Adjusted                                                                   
Student Count  for Charter Schools vs.  Neighborhood Schools"                                                                   
(copy on file). He stated that  the legislation would provide                                                                   
charter  schools, with  fewer  than 150  students, a  student                                                                   
count adjustment  equal to that of neighborhood  schools with                                                                   
400  students.  The  bill  would  also  address  the  problem                                                                   
created  for school  districts when  charter and  alternative                                                                   
schools unexpectedly  enroll fewer students than  is required                                                                   
by the  state to  fund them as  separate schools.  Presently,                                                                   
the number  of students a  charter school must  have enrolled                                                                   
in order  to be  funded as  a school  is 150, an  alternative                                                                   
school must  have 200.  When these  schools fall one  student                                                                   
below the  threshold, the state  cuts funding by  $500,000 to                                                                   
$700,000. This is  detrimental not only to the  school but to                                                                   
the district as well. CS for SB  57 contains a one year "hold                                                                   
harmless" provision for schools  that unexpectedly fall below                                                                   
the  threshold in  their  first year  of  operation, or  were                                                                   
above the  threshold the previous  year and then  fell below.                                                                   
For one year the schools would  receive 95 percent of the per                                                                   
student rate that they would have  received at the threshold.                                                                   
During the "hold harmless" year  the school would be required                                                                   
to submit  a budget  to their local  school board  laying out                                                                   
the plan for the following year  if their enrollment does not                                                                   
rise. Finally,  the CS lowers the separate  schools threshold                                                                   
for alternative schools  from 200 to 175 students.  He shared                                                                   
that Alaska  has a  serious problem  with school  achievement                                                                   
and high school graduation, and  that what works well for one                                                                   
student may not  work best for all students.  Charter schools                                                                   
and  alternative  schools  offer parents  choice  within  the                                                                   
public school  system. The legislation has been  shown strong                                                                   
support  by   school  districts  throughout  the   state.  He                                                                   
expressed concern that the school  funding system has limited                                                                   
communities   in  their   ability  to   create  and   sustain                                                                   
innovative  programs  and  urged committee  support  for  the                                                                   
bill.                                                                                                                           
                                                                                                                                
6:40:35 PM                                                                                                                    
                                                                                                                                
Representative Gara wondered if  the legislation would affect                                                                   
the funding  of traditional schools. Senator  Thomas answered                                                                   
no.                                                                                                                             
                                                                                                                                
EDDY  JEANS,   DIRECTOR,  SCHOOL  FINANCES   AND  FACILITIES,                                                                   
DEPARTMENT  OF EDUCATION  AND  EARLY DEVELOPMENT,  introduced                                                                   
himself.                                                                                                                        
                                                                                                                                
Representative   Gara  reiterated   his  concerns   that  the                                                                   
legislation could  negatively impact funding  for traditional                                                                   
K-12 schools.  Mr. Jeans  replied that,  provided the  fiscal                                                                   
note was  passed along  with the bill,  the funding  of other                                                                   
schools in the state would not be affected.                                                                                     
                                                                                                                                
SENATOR CHARLIE HUGGINS, WASILLA,  shared that he assisted in                                                                   
opening  the   first  two  charter  schools   in  Mat-Su.  He                                                                   
discussed  the  commonalities  between  charter  schools  and                                                                   
alternative schools,  which at one time had  the same minimum                                                                   
student count. He explained that  when a charter school drops                                                                   
from 150  to 149; alternative  school 200 to 199,  the school                                                                   
incurs a  loss of $500,000 to  $700,000. Both are  schools of                                                                   
choice.  The difference  between the two  programs is  stark.                                                                   
Charter schools  traditionally have a strong  support system,                                                                   
alternative  schools do  not. For  many, alternative  schools                                                                   
are usually the  last stop before dropping out  of school. He                                                                   
stated   that  charter   and   alternative  school   programs                                                                   
throughout the state face multiple challenges.                                                                                  
                                                                                                                                
6:45:23 PM                                                                                                                    
                                                                                                                                
Senator  Huggins  described  agreement   worked  out  between                                                                   
proponents of  alternative schools and proponents  of charter                                                                   
schools. He stated  that he thought the measure  was rational                                                                   
and urged the committee to support the legislation.                                                                             
                                                                                                                                
Vice-Chair Thomas asked how many  charter schools were in the                                                                   
Haines district. Mr. Jeans replied that there were none.                                                                        
                                                                                                                                
Vice-Chair  Thomas  wondered  if passing  the  measure  would                                                                   
encourage  all  schools  to  expect  more  money.  Mr.  Jeans                                                                   
replied that  he could  not make  the assurance that  schools                                                                   
would  not  ask  for increased  funding  in  the  future.  He                                                                   
believed  that  the  legislation  addresses  the  problem  by                                                                   
allowing schools that  are on the verge of  losing funding to                                                                   
transition  to a new  funding level  should their  enrollment                                                                   
decrease, instead of being forced to shut down.                                                                                 
                                                                                                                                
6:49:28 PM                                                                                                                    
                                                                                                                                
Senator Huggins  noted that the  number of students  required                                                                   
for adequate funding in neighborhood  schools is dramatically                                                                   
different than charter or alternative   schools.                                                                                
                                                                                                                                
Vice-Chair   Thomas  reiterated   concerns  about   increased                                                                   
expectations for funding from traditional schools.                                                                              
                                                                                                                                
Senator  Thomas  referred  to the  chart,  "Adjusted  Student                                                                   
Count for Charter  Schools vs. Neighborhood  Schools"(copy on                                                                   
file).  He shared  that  the  traditional schools  have  less                                                                   
participation in enrollment.                                                                                                    
                                                                                                                                
Representative  Gara  wondered  what the  student  count  for                                                                   
traditional school funding was  based on. Mr. Jeans explained                                                                   
the Rule of 10. He said that traditional  schools do not lose                                                                   
funding  at 10  students, but  the  funding is  substantially                                                                   
reduced. He pointed out that that  policy was put in place by                                                                   
the legislature  in 1998, to  encourage small schools  in the                                                                   
state to close. Representative  Gara stated that he supported                                                                   
the legislation.                                                                                                                
                                                                                                                                
6:51:57 PM                                                                                                                    
                                                                                                                                
Co-Chair Hawker opened public testimony.                                                                                        
                                                                                                                                
6:52:09 PM                                                                                                                    
                                                                                                                                
TODD  HINDMAN, TEACHER,  ANVIL  CITY SCIENCE  ACADEMY,  NOME,                                                                   
testified  via  teleconference,  related that  small  charter                                                                   
schools are  vital in order  to provide specific  educational                                                                   
needs in both  rural and urban communities in  the state. The                                                                   
small  size of  charter  schools  allows for  flexibility  to                                                                   
provide  unique   educational  opportunities   for  students.                                                                   
Teachers are able  to develop and implement  lessons in which                                                                   
students  can  use the  community  and their  environment  as                                                                   
educational  resources. He  furthered that  the small  school                                                                   
size  creates  a  culture  around   family  values,  ensuring                                                                   
student  success  through  daily engagement  of  parents.  He                                                                   
concluded that  charter schools  are identifying  and meeting                                                                   
specific needs within Alaskan communities.                                                                                      
                                                                                                                                
6:53:56 PM                                                                                                                    
                                                                                                                                
RAY DEPRIEST, DIRECTOR OF CARREER  TECHNICAL EDUCATION, MATSU                                                                   
SCHOOL DISTRICT, testified via  teleconference, in support of                                                                   
the bill. He  stated that there are four charter  schools and                                                                   
three alternative  schools within the district,  which enroll                                                                   
1500 students.  He believed that  the bill would  correct the                                                                   
funding  problem  in  an impartial  and  fiscally  dependable                                                                   
manner.  He relayed  that in  2008, the  district suffered  a                                                                   
loss  of  $780,000,  when  the   enrollment  numbers  of  one                                                                   
alternative school in the district  unexpectedly dropped from                                                                   
200  to  194.  He  spoke  in  strong  support  of  the  "hold                                                                   
harmless" provision contained in the legislation.                                                                               
                                                                                                                                
KIKI   ABRAHAMSON,    PRESIDENT,   ALASKA    CHARTER   SCHOOL                                                                   
ASSOCIATION testified via teleconference,  She spoke in favor                                                                   
of  the  legislation.   She  pointed  out   that  innovation;                                                                   
alternatives   and   accountability   were   necessities   in                                                                   
education,  to  meet the  changing  needs of  the  workforce,                                                                   
financial  situations, and  communities.  She strongly  urged                                                                   
committee support for the bill.                                                                                                 
                                                                                                                                
6:58:05 PM                                                                                                                    
                                                                                                                                
Co-Chair Hawker closed public testimony.                                                                                        
                                                                                                                                
6:58:15 PM                                                                                                                    
                                                                                                                                
Mr. Jeans detailed  the fiscal notes. The second  page of the                                                                   
fiscal  notes highlights  the impact of  the funding  changes                                                                   
for  carter school  with less  than 150  students. The  third                                                                   
page illustrates the impact of  the "hold harmless" provision                                                                   
on the Mid-Valley Alternative High School in Mat-Su.                                                                            
                                                                                                                                
6:58:43 PM                                                                                                                    
                                                                                                                                
Co-Chair  Stoltze clarified  for the  committee that  charter                                                                   
schools are public schools.                                                                                                     
                                                                                                                                
6:59:20 PM                                                                                                                    
                                                                                                                                
Co-Chair  Stoltze  MOVED  to  report  CSSB 57  (FIN)  out  of                                                                   
Committee   with    individual   recommendations    and   the                                                                   
accompanying fiscal  note.  There being NO  OBJECTION, it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
CSSB 57 (FIN) was REPORTED out  of Committee with a "do pass"                                                                   
recommendation and  with fiscal note #2 by  the Department of                                                                   
Education and Early Development.                                                                                                
                                                                                                                                
7:01:00 PM                                                                                                                    
                                                                                                                                
CS FOR SENATE BILL NO. 96(FIN)                                                                                                
                                                                                                                                
     "An Act relating to nonpayment  of child support, to the                                                                   
     definition of  the term "state" for the  purposes of the                                                                   
     Uniform  Interstate  Family   Support  Act,  to  certain                                                                   
     judicial and  administrative orders for  medical support                                                                   
     of a child,  to periodic review and adjustment  of child                                                                   
     support  orders,  to relief  from  administrative  child                                                                   
     support  orders,  to child  support  arrearages, and  to                                                                   
     medical support of a child  and the Alaska Native family                                                                   
     assistance program; amending  Rule 90.3, Alaska Rules of                                                                   
     Civil Procedure; and providing for an effective date."                                                                     
                                                                                                                                
LINDA ZOG, STAFF,  SENATOR BETTYE DAVIS, introduced  the bill                                                                   
and read  from the Sponsor  Statement (copy on  file). Senate                                                                   
Bill 96  brings the  state into  compliance with the  federal                                                                   
government regulations  adopted in July 2008,  which requires                                                                   
states  to have  guidelines  addressing  how  either or  both                                                                   
parents will  provide for a child's  health care needs.  If a                                                                   
parent  is ordered  to  pay for  health  care including  cost                                                                   
medical support,  the Child Support Services  Division (CSSD)                                                                   
must enforce the  ongoing medical support obligation  as well                                                                   
as  collect any  cash  medical  support arrears.  Failure  to                                                                   
satisfy these  mandated requirements jeopardizes  $85 million                                                                   
in federal funding for both the  Alaska Child Support Program                                                                   
and Temporary Assistance for Needy  Families (TANF). The bill                                                                   
adds  an  "Indian  tribe"  and   the  "United  States  Virgin                                                                   
Islands"  to  the  definition  of state.  The  bill  adds  to                                                                   
existing law the authority for  a tribunal to order either or                                                                   
both parents  to pay cash  medical support, if  warranted. In                                                                   
addition,  the  bill directs  CSSD  to review  child  support                                                                   
orders for  modification on  a federally mandated  three-year                                                                   
cycle.  The   bill  adds  "cash   medical  support"   to  the                                                                   
definition  of  arrears, and  to  the definition  of  support                                                                   
order,  enabling Child  Support Enforcement  to use  existing                                                                   
enforcement   tools  to  collect   a  cash  medical   support                                                                   
obligation on behalf of the child.  Finally, the bill removes                                                                   
the language of who may request  the correction of a clerical                                                                   
mistake in an  administrative order, or request  the vacation                                                                   
of an  administrative order  based on defaulted  information.                                                                   
The bill assures  $85 million to the state  for child support                                                                   
enforcement and TANF.                                                                                                           
                                                                                                                                
7:04:48 PM                                                                                                                    
                                                                                                                                
GINGER  BLAISDELL,   DIRECTOR,  DIVISION  OF   ADMINISTRATIVE                                                                   
SERVICES, DEPARTMENT  OF REVENUE, presented a  list of people                                                                   
available to answer specific questions regarding the bill.                                                                      
                                                                                                                                
Co-Chair  Hawker asked  if the  department  and the  governor                                                                   
support the bill.  Ms. Blaisdell reported that they do.                                                                         
                                                                                                                                
7:05:59 PM                                                                                                                    
                                                                                                                                
Vice-Chair Thomas MOVED to adopt Amendment 2:                                                                                   
                                                                                                                                
     Page 2, line 8, following "order.":                                                                                        
     Delete  "In adopting  UIFSA  conforming amendments,  the                                                                   
     legislature does not intend  to grant or restrict tribal                                                                   
     jurisdiction to enter, modify,  or enforce child support                                                                   
     orders,  and the  amendments  are  not intended,  either                                                                   
     directly or impliedly, to acknowledge, expand, or                                                                          
     restrict tribal jurisdiction."                                                                                             
                                                                                                                                
     Insert "In adopting UIFSA conforming amendments, the                                                                       
     legislative intent is:                                                                                                     
                                                                                                                                
     (1) to remain neutral on the issue of the underlying                                                                       
          child support jurisdiction, if any, for the                                                                           
          entities listed in the amended definition of                                                                          
          "state."                                                                                                              
     (2) not expand or restrict the child support                                                                               
          jurisdiction, if any, of the listed "state"                                                                           
          entities in the amended definition; and                                                                               
     (3) not to assume or express any opinion about whether                                                                     
          those entities have child support jurisdiction                                                                        
          either in fact or in law."                                                                                            
     Renumber accordingly.                                                                                                      
                                                                                                                                
Co-Chair Hawker OBJECTED for discussion.                                                                                        
                                                                                                                                
7:06:30 PM                                                                                                                    
                                                                                                                                
PETER PUTZIER, SENIOR ASSISTANT  ATTORNEY GENERAL, DEPARTMENT                                                                   
OF  LAW,   explained   that  Amendment   2  relates   to  the                                                                   
legislative intent language. The  legislative intent language                                                                   
applies  only to the  Uniform Interstate  Family Support  Act                                                                   
(UIFSA) portion  of the legislation  and is related  to State                                                                   
of Alaska Statute 25.25. The intent  was to specify, with the                                                                   
writing  of  the  amendment,  that  the  department  was  not                                                                   
reshaping   or  restructuring   state   tribal   governmental                                                                   
relationships,  or making a  broad jurisdictional  statement.                                                                   
Rather,  the intent  was  to make  a technical  amendment  to                                                                   
unify  Alaska  with the  rest  of  the  nation and  with  the                                                                   
federal act.                                                                                                                    
                                                                                                                                
Co-Chair  Hawker  WITHDREW  his  objection.  There  being  NO                                                                   
OBJECTION, Amendment 2 was ADOPTED.                                                                                             
                                                                                                                                
7:09:37 PM                                                                                                                    
                                                                                                                                
Co-Chair Hawker  requested that legislative legal  be allowed                                                                   
to  make technical  changes  to  the amendment.  Mr.  Putzier                                                                   
pointed out that  many parties had negotiated  in determining                                                                   
the final language of the amendment.  He requested that it go                                                                   
forward as written.                                                                                                             
                                                                                                                                
Co-Chair Hawker  withdrew his  request to grant  authority to                                                                   
legislative   legal  to   make  technical   changes  to   the                                                                   
amendment.  He requested  that  the amendment  be drafted  as                                                                   
written.                                                                                                                        
                                                                                                                                
7:11:56 PM                                                                                                                    
                                                                                                                                
Representative  Foster asked Mr.  Robert Loescher  to discuss                                                                   
the amendment.                                                                                                                  
                                                                                                                                
ROBERT  W.  LOESCHER,  TRIBAL   JUDICIARY  COMMITTEE  MEMBER,                                                                   
CENTRAL  COUNCIL TLINGIT  & HAIDA  INDIAN  TRIBES OF  ALASKA,                                                                   
shared that the  amendment being offered was  satisfactory to                                                                   
the council and urged committee support.                                                                                        
                                                                                                                                
7:13:17 PM                                                                                                                    
                                                                                                                                
Co-Chair Hawker opened public  testimony, none being offered,                                                                   
public testimony was closed.                                                                                                    
                                                                                                                                
7:15:09 PM                                                                                                                    
                                                                                                                                
Representative  Gara asked if  it would  be possible  to work                                                                   
with  the bill's  sponsors  and the  chairs  of both  finance                                                                   
committees,  to incorporate  foster  care reform  legislation                                                                   
into the bill. Co-Chair Hawker  was hesitant to hold the bill                                                                   
in committee.  Representative Gara  said that he  would speak                                                                   
to the  necessary channels before  the bill was heard  on the                                                                   
House floor.                                                                                                                    
                                                                                                                                
Co-Chair Hawker noted the zero fiscal note.                                                                                     
                                                                                                                                
Ms.  Blaisdell   pointed   out  that   the  passing   of  the                                                                   
legislation   would  be   of  no  additional   cost   to  the                                                                   
department.  She warned  that  there was  a  chance that  the                                                                   
state could  lose up  to $85 million  if the legislation  did                                                                   
not pass.                                                                                                                       
                                                                                                                                
7:17:38 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Thomas MOVED  to  report HCS  CSSB  96 (FIN),  as                                                                   
amended,  out of  Committee with  individual  recommendations                                                                   
and the accompanying  fiscal note. There being  NO OBJECTION,                                                                   
it was so ordered.                                                                                                              
                                                                                                                                
HCS CSSB  96 (FIN) was REPORTED  out of Committee with  a "do                                                                   
pass"  recommendation and  with zero  fiscal note  #1 by  the                                                                   
Department of Revenue.                                                                                                          
                                                                                                                                
7:19:02 PM                                                                                                                    
                                                                                                                                
CS FOR SENATE BILL NO. 170(FIN)                                                                                               
                                                                                                                                
     "An Act modifying the Alaska unemployment insurance                                                                        
     statutes by redefining the base period for determining                                                                     
     eligibility for unemployment benefits; relating to                                                                         
     contributions, interest, penalties, and payments under                                                                     
     the Alaska Employment Security Act; and providing for                                                                      
     an effective date."                                                                                                        
                                                                                                                                
MAX HENSLEY, STAFF,  SENATOR JOHNNY ELLIS, explained  that SB
170  would make  two  minor  amendments to  the  unemployment                                                                   
insurance statutes.  The first  change, found in  sections 13                                                                   
and  20, would  update eligibility  standards for  unemployed                                                                   
workers receiving  benefits front the Unemployment  Insurance                                                                   
Trust  Fund.  Current  eligibility   is  based  on  employers                                                                   
meeting a minimum earnings standard  in the first four of the                                                                   
previous  five  calendar  quarters. The  change  would  allow                                                                   
workers  failing to meet  the standard  to recalculate  their                                                                   
eligibility  using the  last  four completed  quarters.  This                                                                   
would expedite  the receiving  of unemployment benefits.  The                                                                   
change would  make the  state eligible  for $15.6 million  in                                                                   
federal stimulus funding to the  trust fund, and $1.1 million                                                                   
in  administrative costs.  He  stressed that,  as  long as  a                                                                   
portion of the  federal stimulus dollars were  deposited into                                                                   
the  trust   fund,  there  would   be  no  increase   in  the                                                                   
unemployment insurance  taxes paid by businesses  and workers                                                                   
that support the  fund.  Any additional funds  would be spent                                                                   
on targeted job  training. He referred to letters  of support                                                                   
for the  bill in committee  members' packets (copy  on file).                                                                   
The second  change is  the addition  of federally  recognized                                                                   
tribes  to the  list of  reimbursable  employers. Alaska  has                                                                   
been  out of  compliance  with federal  law  since 2002.  The                                                                   
language would  require the state  to treat tribes  like non-                                                                   
profit employers  and municipalities, and would  allow tribal                                                                   
entities  to reimburse  the unemployment  trust fund  for the                                                                   
benefits  drawn  by employees,  after  the funds  are  drawn,                                                                   
rather than before. He referred  to the letter from the State                                                                   
of Alaska Department of Labor  (DOL) to the federal DOL (copy                                                                   
on file).  The letter  notes that  most tribal entities  will                                                                   
not take  advantage of  the change, but  must be  offered the                                                                   
option to do so,  in order for the state to  be in compliance                                                                   
with federal  law. He  cited a list  of tribal entities  that                                                                   
would be affected by the legislation (copy on file).                                                                            
                                                                                                                                
7:23:34 PM                                                                                                                    
                                                                                                                                
GUY BELL,  ASSISTANT COMMISSIONER  AND DIRECTOR,  DIVISION OF                                                                   
ADMINISTRATIVE  SERVICES, DEPARTMENT  OF LABOR AND  WORKFORCE                                                                   
DEVELOPMENT, reported that the  administration was neutral on                                                                   
the bill, but  the preference of the administration  was that                                                                   
the two sections be separated.                                                                                                  
                                                                                                                                
Co-Chair Hawker  asked if the  administration had  a position                                                                   
on  either  section.  Mr.  Bell  related  that  the  governor                                                                   
sponsored  the  Native  Entity Compliance  component  of  the                                                                   
legislation.  He added  that the  state would  be subject  to                                                                   
federal sanctions, if the provision was not adopted.                                                                            
                                                                                                                                
Co-Chair  Hawker  wondered  why  the  other  portion  of  the                                                                   
legislation  had not  been  endorsed by  the  administration.                                                                   
Mr. Bell  referred to the  administrations belief  that there                                                                   
were strings attached to the federal stimulus dollars.                                                                          
                                                                                                                                
7:25:55 PM                                                                                                                    
                                                                                                                                
Co-Chair  Hawker asked  what the attached  strings might  be.                                                                   
Mr. Bell thought  there was a required statutory  change that                                                                   
would  have an  impact  on  the systems  liability.  Co-Chair                                                                   
Hawker wondered  what the  benefit to the  state would  be if                                                                   
the statutory changes  were made. Mr. Bell reported  that the                                                                   
state  would  be eligible  to  apply  for and  receive  $15.6                                                                   
million in the Unemployment Insurance Trust Fund.                                                                               
                                                                                                                                
7:27:00 PM                                                                                                                    
                                                                                                                                
Representative  Gara  asked how  much  of the  federal  funds                                                                   
would be  available for the  general fund  in FY 2010  and FY                                                                   
2011.   Mr.  Bell   explained   that  the   money  would   go                                                                   
automatically into the Unemployment  Insurance Trust Fund. He                                                                   
stated that there  were over $1 million general  fund dollars                                                                   
being invested in the trust fund.  A future legislature could                                                                   
make the determination to exchange  some of the $15.6 million                                                                   
in federal funds for the $1 million general fund dollars.                                                                       
                                                                                                                                
7:28:37 PM                                                                                                                    
                                                                                                                                
Mr. Hensley  added that the  stimulus dollars  were available                                                                   
for a limited time, but once procured,  could be spent at any                                                                   
time  going forward.  He  noted that  it  was Senator  Ellis'                                                                   
intent that employees  and employers be held  harmless on the                                                                   
increased liability.                                                                                                            
                                                                                                                                
Representative Gara wondered if  there would be enough in the                                                                   
$15.6 million  to replace $1 million  of the general  fund in                                                                   
other areas. Mr. Bell concluded that he did not know.                                                                           
                                                                                                                                
Co-Chair Hawker ruminated that  the actuarial calculation was                                                                   
fairly sophisticated.                                                                                                           
                                                                                                                                
7:31:08 PM                                                                                                                    
                                                                                                                                
Co-Chair Hawker opened public  testimony, none being offered,                                                                   
public testimony was closed.                                                                                                    
                                                                                                                                
7:33:24 PM                                                                                                                    
                                                                                                                                
Co-Chair Hawker commented that  there was a zero fiscal note.                                                                   
                                                                                                                                
7:33:48 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Thomas MOVED  to  report CSSB  170  (FIN) out  of                                                                   
Committee   with    individual   recommendations    and   the                                                                   
accompanying fiscal  note.  There being NO  OBJECTION, it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
CSSB  170 (FIN)  was REPORTED  out  of Committee  with a  "do                                                                   
pass" recommendation  and with a new zero fiscal  note by the                                                                   
Department of Labor and Workforce Development.                                                                                  
                                                                                                                                
7:35:16 PM                                                                                                                    
                                                                                                                                
CS FOR SENATE BILL NO. 114(L&C)                                                                                               
                                                                                                                                
     "An Act extending the termination date of the State                                                                        
     Board of Registration for Architects, Engineers, and                                                                       
     Land Surveyors; extending the term of a temporary                                                                          
     member of the State Board of Registration for                                                                              
     Architects, Engineers, and Land Surveyors; and                                                                             
     providing for an effective date."                                                                                          
                                                                                                                                
Co-Chair  Hawker detailed  the  life of  the bill  as it  had                                                                   
traveled through  different committees. He believed  that the                                                                   
bill before the committee was  the same version the committee                                                                   
had heard prior.                                                                                                                
                                                                                                                                
JAKE HAMBURG, STAFF, SENATOR JOE PASKVAN, agreed.                                                                               
                                                                                                                                
7:35:58 PM                                                                                                                    
                                                                                                                                
Representative Foster pointed  out that the 10 members of The                                                                   
State  Board of  Registration for  Architects, Engineers  and                                                                   
Land Surveyors,  and their staff,  meet four times  per year.                                                                   
He wondered  how travel expenses  were funded, and  what kind                                                                   
of work was being done.                                                                                                         
                                                                                                                                
7:36:30 PM                                                                                                                    
                                                                                                                                
LYNN   SMITH,   DIVISION  OF   CORPORATIONS,   BUSINESS   AND                                                                   
PROFESSIONAL  LICENSING,  replied that  at  the meetings  the                                                                   
board reviews license applications and certifications.                                                                          
                                                                                                                                
7:37:18 PM                                                                                                                    
                                                                                                                                
Representative  Gara understood that  the $454,000  in travel                                                                   
expenses comes  from license  fees collected from  architects                                                                   
and engineers,  and was of  no cost  to the state.  Ms. Smith                                                                   
reported that the board is self-supporting.                                                                                     
                                                                                                                                
7:38:05 PM                                                                                                                    
                                                                                                                                
Co-Chair Hawker opened public  testimony, none being offered,                                                                   
public testimony was closed.                                                                                                    
                                                                                                                                
Co-Chair Hawker commented on the fiscal note.                                                                                   
                                                                                                                                
7:38:53 PM                                                                                                                    
                                                                                                                                
Co-Chair  Stoltze  MOVED to  report  CSSB  114 (L&C)  out  of                                                                   
Committee   with    individual   recommendations    and   the                                                                   
accompanying fiscal  note.  There being NO  OBJECTION, it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
CSSB  114 (L&C)  was REPORTED  out  of Committee  with a  "do                                                                   
pass" recommendation and with  and with fiscal note #1 by the                                                                   
Department of Commerce, Community and Economic Development.                                                                     
                                                                                                                                
7:40:01 PM                                                                                                                    
                                                                                                                                
Co-Chair Stoltze assumed the gavel.                                                                                             
                                                                                                                                
AT-EASE:       7:41:54 PM                                                                                                     
                                                                                                                                
RECONVENED:    8:13:57 PM                                                                                                     
                                                                                                                                
CS FOR SENATE BILL NO. 75(FIN)                                                                                                
                                                                                                                                
     "An Act making and amending appropriations, including                                                                      
     capital appropriations, supplemental appropriations,                                                                       
     and appropriations to capitalize funds; and providing                                                                      
     for an effective date."                                                                                                    
                                                                                                                                
Co-Chair  Hawker  MOVED  to adopt  HCS  CSSB  75 (FIN)  as  a                                                                   
working  document  before  the   committee.  There  being  NO                                                                   
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
8:14:42 PM                                                                                                                    
                                                                                                                                
JAMES  ARMSTRONG,  STAFF,  CO-CHAIR  STOLTZE,  reported  that                                                                   
there  were  three additional  legislative  finance  reports;                                                                   
numbers and  language differences only, numbers  and language                                                                   
differences statewide,  and numbers and language  detailed by                                                                   
agency.                                                                                                                         
                                                                                                                                
8:17:05 PM                                                                                                                    
                                                                                                                                
Mr. Armstrong  listed the changes  to the bill. Page  2, Line                                                                   
13, adds the  appropriation mechanism of $2,500,000,  for the                                                                   
Enterprise Security Projects.                                                                                                   
                                                                                                                                
Representative  Gara asked  for  clarification  on the  first                                                                   
change. Mr. Armstrong replied  that in the previous draft the                                                                   
Senate  added the funding  for the  Enterprise technology  in                                                                   
the  language section,  but  due to  a  technical error,  the                                                                   
actual funding  allocation mechanism  allowing the  agency to                                                                   
spend the money, was omitted.  The change adds that allowance                                                                   
language back in.                                                                                                               
                                                                                                                                
Mr. Armstrong continued.  Page 2, Line 27, adds  $4.5 million                                                                   
in general funds  match to Alaska Energy  Authority-Renewable                                                                   
Energy  Projects.  It  also  adds  $1  million  in  Statutory                                                                   
Designated Program  Receipts and Inter Agency  Receipts. Page                                                                   
3,  Line  17,  adds  intent  language   to  the  $10  million                                                                   
appropriation to the Port of Anchorage.  The appropriation is                                                                   
contingent   upon  the  municipality   assembly  adopting   a                                                                   
resolution  identifying the specific  ferry landing  location                                                                   
for M/V Susitna.  Line 22, requests that the  Municipality of                                                                   
Anchorage  assist the  Mat-Su borough  in grant  applications                                                                   
for  port  projects  to  the   United  States  Department  of                                                                   
Transportation.                                                                                                                 
                                                                                                                                
8:18:23 PM                                                                                                                    
                                                                                                                                
Representative Gara  wondered where the corresponding  change                                                                   
could be  found in  the numbers and  language section  of the                                                                   
bill. Mr. Armstrong replied that  the language had been added                                                                   
to the  general fund portion  of the ports appropriation.  He                                                                   
added that he would point out  intent language in the bill as                                                                   
it came up.                                                                                                                     
                                                                                                                                
8:19:11 PM                                                                                                                    
                                                                                                                                
Mr. Armstrong  continued to  Line 27,  the Kenai River  Bluff                                                                   
Project. The project was not in  the original bill. The Corps                                                                   
of  Engineers has  $13 million  slated for  the project.  The                                                                   
Kenai borough has added $2 million  to the project, which the                                                                   
state has  matched. Language has  been added to  specify that                                                                   
the appropriation is contingent  upon the fund from the Corps                                                                   
of Engineers.  Mr. Armstrong  noted that  the bonds  had been                                                                   
approved,  but  not  issued,   in  anticipation  of  the  $13                                                                   
million.                                                                                                                        
                                                                                                                                
Vice-Chair  Thomas asked  when an  answer from  the Corps  of                                                                   
Engineers  could be expected.   Mr.  Armstrong said  that the                                                                   
corps was still in deliberation.                                                                                                
                                                                                                                                
Co-Chair  Stoltze  pointed  out  that the  project  had  been                                                                   
introduced by the administration.                                                                                               
                                                                                                                                
8:20:06 PM                                                                                                                    
                                                                                                                                
Mr. Armstrong  continued to Page  19, Line 19, which  adds 40                                                                   
percent  of  the  deferred  maintenance  funds  requested  by                                                                   
Alaska  Housing  Finance  Corporation  (AHFC)  for  the  AHFC                                                                   
Building System  Replacement Program. Page 19,  Line 33, adds                                                                   
$1,380,000 to  AHFC Fire Protection Systems,  also 40 percent                                                                   
of  the  deferred  maintenance   receipts  requested  by  the                                                                   
corporation.                                                                                                                    
                                                                                                                                
8:21:03 PM                                                                                                                    
                                                                                                                                
Mr. Armstrong  explained  that AHFC had  bonded for  deferred                                                                   
maintenance  receipts in the  past. The  bonding has  run out                                                                   
and regular program receipts are now being requested.                                                                           
                                                                                                                                
Representative  Kelly asked  if the  administration had  made                                                                   
the  request on  behalf  of  the corporation.  Mr.  Armstrong                                                                   
replied that it had.                                                                                                            
                                                                                                                                
8:21:59 PM                                                                                                                    
                                                                                                                                
Mr. Armstrong continued  to page 20, Line 15.  He stated that                                                                   
$3.5 million  had been added to  the third phase of  the AHFC                                                                   
Loussac Manor  renovation and replacement in  Anchorage. Line                                                                   
18  notes  a  third of  the  deferred  maintenance  for  AHFC                                                                   
Security  Systems  Replacement/Upgrades for  public  housing.                                                                   
Congress  has  given  AHFC $600,000  for  the  Weatherization                                                                   
Program, as noted on Page 20, Line 32.                                                                                          
                                                                                                                                
8:22:45 PM                                                                                                                    
                                                                                                                                
Mr. Armstrong  informed the committee  that $400,000  for the                                                                   
Alaska Aviation  Safety Program  had been  added on  Page 21,                                                                   
Line  10.  Those  funds  have been  matched  by  the  Federal                                                                   
Aviation Administration and The Medallion Foundation.                                                                           
                                                                                                                                
8:23:22 PM                                                                                                                    
                                                                                                                                
Mr.  Armstrong relayed  that Page  21,  Lines 20,  21 and  22                                                                   
notes  the  administrative  intent language  for  the  Alaska                                                                   
Marine Highway System. Page 21,  Line 31 notes the 60 percent                                                                   
of  the  funding  for  the  Harbor  Program  Development  was                                                                   
restored at the  request of the administration.  This project                                                                   
had  been  overlooked, but  will  be  moved  in 2010  to  the                                                                   
operating budget.                                                                                                               
                                                                                                                                
Representative  Foster  pointed  out  that in  the  past  the                                                                   
administration  had vetoed  capital  projects. Mr.  Armstrong                                                                   
assumed  that  the  administration  would not  veto  its  own                                                                   
request.                                                                                                                        
                                                                                                                                
8:24:50 PM                                                                                                                    
                                                                                                                                
Representative Gara  asked if all the changes  mentioned were                                                                   
governor's requests.   Mr. Armstrong reported  that after the                                                                   
Senate version  of the bill  had passed, projects  that could                                                                   
capture a  match had  been identified. He  said that  some of                                                                   
the  matches   would  not  flow  through   the  appropriation                                                                   
process. Co-Chair  Stoltze added that a list  of projects had                                                                   
been  presented that  had match  funds,  but through  errors,                                                                   
some projects had not made the list.                                                                                            
                                                                                                                                
Representative  Gara restated  his question.   Mr.  Armstrong                                                                   
explained  that  the  back-up  had been  reviewed  twice.  He                                                                   
elaborated  that  some  of the  back-up  did  not  illustrate                                                                   
whether  there  had  been  an   accompanying  federal  match.                                                                   
Representative  Gara  asked if  the  items  had been  in  the                                                                   
governor's original budget.                                                                                                     
                                                                                                                                
 8:26:57 PM                                                                                                                   
                                                                                                                                
Mr. Armstrong pointed out that  Page 34, Line 14 and Page 36,                                                                   
Line  9,  were  both  oversights  in  the  amendment  process                                                                   
between   the    Department   of   Transportation    stimulus                                                                   
legislation  and  the  original   capital  budget.  The  line                                                                   
changes  restore  funding  for  FY 2009  projects  that  were                                                                   
already on the STIP in the original capital budget.                                                                             
                                                                                                                                
8:28:22 PM                                                                                                                    
                                                                                                                                
Mr. Armstrong  turned  to Section  4, Page  44, Line 10.  The                                                                   
title  for  the  appropriation  has been  changed  from  Egan                                                                   
Center Upgrades to Passenger Staging Upgrades.                                                                                  
                                                                                                                                
Representative   Gara    returned   to   the    Egan   Center                                                                   
appropriation.   He  wondered if  the money  would come  from                                                                   
cruise ship funds.  Mr. Armstrong  said yes. All of Section 4                                                                   
pertains to cruise ship funds.                                                                                                  
                                                                                                                                
Mr. Armstrong continued reading  from the bill. Page 45, Line                                                                   
9 is  related to the  Baranof Park  Project in Kodiak,  which                                                                   
was  in the  original  CS  from the  senate,  and  was not  a                                                                   
qualifying  project.  Another  project  is  slated  for  $1.3                                                                   
million, making the addition a net zero addition.                                                                               
                                                                                                                                
8:30:54 PM                                                                                                                    
                                                                                                                                
Mr. Armstrong  continued to Page  45, Lines 19 and  20, which                                                                   
are a  title change. The  words "and Construction"  have been                                                                   
added.  Page  46, Line  22,  title  change inserts  the  work                                                                   
"passenger"  between "marine"  and "service".  Page 46,  Line                                                                   
29, is  the Fort  Abercrombie Tourist  Bus Parking,  which is                                                                   
the $1.3  million project  previously  mentioned. If  you add                                                                   
the appropriation  on Page 45, Line  9 to Page, 46,  Line 29,                                                                   
and take  out the Baranof Park  Project, the addition  is net                                                                   
zero.                                                                                                                           
                                                                                                                                
8:32:46 PM                                                                                                                    
                                                                                                                                
Mr. Armstrong informed  the committee that the  $6 million in                                                                   
allocations from  the original bill  sent by the  Senate have                                                                   
been collapsed  into one  separate appropriation,  and intent                                                                   
language has been added to the top of page 47.                                                                                  
                                                                                                                                
Vice-Chair  Thomas wondered  how  the numbers  of people  who                                                                   
utilize parks  were accounted for. Mr. Armstrong  deferred to                                                                   
the administration.                                                                                                             
                                                                                                                                
8:33:39 PM                                                                                                                    
                                                                                                                                
Representative  Crawford asked about  the funding  source for                                                                   
line  32,  page  46, State  Parks  Deferred  Maintenance  and                                                                   
Emergency.  Mr.  Armstrong related  that  when  the bill  was                                                                   
first released by the governor,  projects in the section were                                                                   
to  be funded,  within  the  fast track  supplemental,  using                                                                   
cruise ship  gambling proceeds. However,  the administration,                                                                   
upon consultation  with the legislature, decided  to classify                                                                   
the gambling funds as general  funds. As a result, $6 million                                                                   
of the cruise  ship head tax dollars have been  allocated for                                                                   
statewide deferred maintenance projects.                                                                                        
                                                                                                                                
8:34:44 PM                                                                                                                    
                                                                                                                                
Co-Chair  Hawker  clarified  that   the  head  tax  has  very                                                                   
specific legal  requirements as to  how it can be  spent. The                                                                   
Office  of Management  and  Budget (OMB)  and  the state  had                                                                   
originally thought of the gambling  tax as a new and separate                                                                   
fund  source. Upon  reflection,  it was  understood that  the                                                                   
gambling tax was  just like all other taxes and  was meant to                                                                   
feed the general  fund. He made clear that where  the tax was                                                                   
indicated  on earlier spreadsheets  was to  be treated  as an                                                                   
anachronism,  and will  always  be treated  as general  funds                                                                   
going forward.                                                                                                                  
                                                                                                                                
8:35:42 PM                                                                                                                    
                                                                                                                                
Mr. Armstrong  continued to read  from the bill. On  Page 53,                                                                   
Lines 15  and 17, corrections  have been made to  rectify the                                                                   
incorrect House  District numbers.  Page 63, Lines  1 through                                                                   
28, are intent  language that covers an appropriation  in the                                                                   
language  section.  Co-Chair  Stoltze  recommended  deferring                                                                   
those line budget  items to Co-Chair Hawker at  a later time.                                                                   
Mr. Armstrong continued to Page 67, Line 23.                                                                                    
                                                                                                                                
8:37:13 PM                                                                                                                    
                                                                                                                                
Co-Chair  Hawker reported  that there  are three sections  in                                                                   
the   bill   that  could   arguably   be   called   operating                                                                   
appropriation  for the  year. The sections  are; Section  21,                                                                   
Page 67, Section 20, Page 67,  and associated intent language                                                                   
on  Page  63.  There  has  been  ongoing  discussion  in  the                                                                   
legislature  concerning  state  investment  in  in-state  gas                                                                   
development, while  attempting to reconcile development  of a                                                                   
gas line  with high  fuel costs.  Section 20 appropriated  an                                                                   
additional general fund appropriation  into the Department of                                                                   
Health and  Social Services (DHSS)  to continue to  build the                                                                   
Low Income Home Energy Assistance  Program fund (LIHEAP). The                                                                   
funds augment the federal Alaska  Heating Assistance Program.                                                                   
                                                                                                                                
8:39:17 PM                                                                                                                    
                                                                                                                                
Co-Chair  Hawker   stressed  that  money  for   in-state  gas                                                                   
development was the top budgetary  priority for the governor.                                                                   
He gave that $9  million in general funds have  been added to                                                                   
Office  of the  Governor for  gasline development.   He  read                                                                   
from the legislative intent language  in Section 13, Page 63,                                                                   
Lines 3-6. He  emphasized that the project is  not related to                                                                   
Alaska  Gasline Inducement  Act  (AGIA), but  to continue  to                                                                   
work to  develop in-state gas  for in-state use. It  is meant                                                                   
expedite  the  efforts  needed   for  private  enterprise  to                                                                   
complete  the  project. The  money  was appropriated  to  the                                                                   
Office of  the Governor to  ensure the governor  the latitude                                                                   
to distribute the funds where she deemed most appropriate.                                                                      
                                                                                                                                
8:42:11 PM                                                                                                                    
                                                                                                                                
Representative Crawford inquired  the funds could be used for                                                                   
the  Alaska Natural  Gas Development  Authority (ANGDA).  Co-                                                                   
Chair Hawker reported that it could be used for ANGDA.                                                                          
                                                                                                                                
Representative Kelly understood  that the funds could be used                                                                   
at the  governor's discretion.  Co-Chair Hawker clarified  it                                                                   
the intent  to make  the money available  to the  governor to                                                                   
utilize, within parameters, as she deemed fit.                                                                                  
                                                                                                                                
8:43:44 PM                                                                                                                    
                                                                                                                                
Representative  Gara asked  how the  decision to  appropriate                                                                   
the $9  million was made.  Co-Chair Hawker reported  that the                                                                   
governor   had    requested   $9.3   million.    The   LIHEAP                                                                   
appropriation  was already benchmarked  at $9 million,  which                                                                   
aided in the decision. Representative  Gara wondered when the                                                                   
discussion  on  the amount  of  the appropriation  had  taken                                                                   
place.  Co-Chair Hawker  believed  the discussion  had  taken                                                                   
place within  the sphere  of the administrations  specialized                                                                   
knowledge. Representative Gara  requested discussion from the                                                                   
administration  as to  what the  state would  receive for  $9                                                                   
million, and why that specific amount was requested.                                                                            
                                                                                                                                
8:45:05 PM                                                                                                                    
                                                                                                                                
Representative  Gara voiced  concern  about  the language  on                                                                   
page 63, Line  15. He felt it would allow  the administration                                                                   
to spend  state money as a  subsidy to a private  entity. Co-                                                                   
Chair Hawker  explained that  intent is  to provide  funds to                                                                   
facilitate progress on in-state gas development.                                                                                
                                                                                                                                
8:46:40 PM                                                                                                                    
                                                                                                                                
Representative   Gara  hoped   that  there   would  be   more                                                                   
discussion on  the matter. Co-Chair  Hawker pointed  out that                                                                   
every year funds  are added to departments in  the pursuit of                                                                   
in-state gas  development, regardless of progress.  He termed                                                                   
it  a policy  call.  Co-Chair  Stoltze added  that  it was  a                                                                   
pronounced request from the administration.                                                                                     
                                                                                                                                
Co-Chair Hawker  pointed out that  there are laws  to prevent                                                                   
the administration from giving away assets.                                                                                     
                                                                                                                                
8:47:57 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Thomas  requested  an audit  of  ANGDA.  Co-Chair                                                                   
Hawker replied  that that was  possible. He recommended  that                                                                   
the request  be directed to  Legislative Budget  and Auditing                                                                   
(LB&A).  Vice-Chair  Thomas suggested that the  audit be done                                                                   
before the  money is  given to  ANGDA. Co-Chair Hawker  noted                                                                   
the funding  is provided directly  to the governor's  office.                                                                   
In recognition of the concerns  about ANGDA, he reported that                                                                   
the funds under discussion are  entrusted specifically to the                                                                   
governor.  He thought  the governor's  office  would use  the                                                                   
money wisely.                                                                                                                   
                                                                                                                                
8:50:06 PM                                                                                                                    
                                                                                                                                
Representative  Gara felt that  the appropriation was  a huge                                                                   
policy call,  with no  limitations, and unenforceable  intent                                                                   
language.  He thought it  should be  reconsidered in  an open                                                                   
committee process. He strongly questioned its transparency.                                                                     
                                                                                                                                
Co-Chair Hawker understood that  the governor had stated that                                                                   
the intent for the $9 million  was that it be invested in in-                                                                   
state gas development.                                                                                                          
                                                                                                                                
8:51:32 PM                                                                                                                    
                                                                                                                                
KAREN  REHFELD, DIRECTOR,  OFFICE OF  MANAGEMENT AND  BUDGET,                                                                   
OFFICE  OF THE  GOVERNOR, informed  the  committee that  this                                                                   
item  has been  a  priority for  the  governor  and has  been                                                                   
discussed in various committees.                                                                                                
                                                                                                                                
LARRY PERSILY,  STAFF, CO-CHAIR HAWKER, explained  that Harry                                                                   
Noah, an executive  branch employee, has been  designated the                                                                   
governor's  in-state  gas  line   coordinator  and  has  been                                                                   
discussing the  issue with as  many legislators  as possible.                                                                   
He has presented  suggestions as to the best  way an in-state                                                                   
gasline could  be developed; discussing timelines,  necessary                                                                   
funds and the right of way permits that would be required.                                                                      
Representative Gara  wondered which legislators  Mr. Noah had                                                                   
spoken to.  He understood that  the governor presented  bills                                                                   
to the  legislature, and that  those bills had  parameters as                                                                   
to  how the  money would  be spent.  He  maintained that  the                                                                   
bills had not  passed. He voiced concern that  the $9 million                                                                   
was just an  award to the governor's office.  He alleged that                                                                   
full disclosure for  use of the funds had not  been discussed                                                                   
with  the entire  committee before  the  intent language  was                                                                   
written into the bill.                                                                                                          
                                                                                                                                
Ms. Rehfeld  reported  that Mr.  Noah has spent  time in  the                                                                   
building  talking  to  lawmakers, and  those  lawmakers  have                                                                   
confidence  in the design  and detail  that was presented  to                                                                   
them.  Co-Chair  Hawker  added   that  there  had  been  many                                                                   
discussions on the issue.                                                                                                       
                                                                                                                                
8:55:54 PM                                                                                                                    
                                                                                                                                
Representative  Austerman  reported that  the  administration                                                                   
had not  sent a representative  to his office to  discuss the                                                                   
issue.  He  expressed regret  that  he  had not  been  better                                                                   
informed.                                                                                                                       
                                                                                                                                
Co-Chair  Stoltze recalled  that Mr.  Noah had contacted  his                                                                   
office to discuss the issue.                                                                                                    
                                                                                                                                
Co-Chair  Hawker   communicated  his  frustration   with  the                                                                   
governor's current  lack of connection with  the legislature.                                                                   
He  felt that  she  gave the  appearance  that  she was  more                                                                   
concerned  with her  national  ambitions than  with what  was                                                                   
transpiring  in her  home  state. He  expounded  that it  was                                                                   
insulting, personally,  and to the people of  the state, that                                                                   
the  administration  had  not  followed  up  with  leadership                                                                   
throughout the building on the issue.                                                                                           
                                                                                                                                
Vice-Chair  Thomas stated  for  the record  that  no one  had                                                                   
contacted him.                                                                                                                  
                                                                                                                                
JOE  BALASH, INTER-GOVERNMENTAL  COORDINATOR,  DEPARTMENT  OF                                                                   
NATURAL  RESOURCES,  reported that  the  work  plan had  been                                                                   
presented  in a public  manner in  the governor's  conference                                                                   
room, as well as broadcast on  Gavel to Gavel in early March.                                                                   
Since that  time, Mr. Noah has  held several meetings  with a                                                                   
legislative working group, coordinated  through the presiding                                                                   
officers in  both bodies. Various documents  were distributed                                                                   
at  the meetings,  which  detailed  the  work plan  by  date,                                                                   
schedule, activity, and approximate  budget for each step. He                                                                   
offered to provide copies of the documents at a later date.                                                                     
                                                                                                                                
8:59:13 PM                                                                                                                    
                                                                                                                                
Representative  Gara emphasized  that while working  together                                                                   
to make  the gasline  a reality,  it was  important that  the                                                                   
administration keep the committee  informed. He revealed that                                                                   
he had not  heard of the legislative working  group mentioned                                                                   
by Mr.  Balash. He  wondered if  the group  had a title.  Mr.                                                                   
Balash replied  it had  been labeled  the "working  group" at                                                                   
administrative  meetings. He recalled  that, at the  meetings                                                                   
he   participated    in,   there    had   been    legislative                                                                   
representatives  present. He  said  that he  could provide  a                                                                   
list of those present.                                                                                                          
                                                                                                                                
Representative  Gara requested  written documentation  of the                                                                   
administration's  plan for  the funds,  and for a  commitment                                                                   
that the  funds would  be spent  according  to the plan.  Mr.                                                                   
Balash related  that meetings  on the  issue had occurred  in                                                                   
early March.  At that point, Mr.  Noah was introduced  by the                                                                   
governor as her  project director. A three  part approach was                                                                   
then laid  out; funding had  been identified,  legislation on                                                                   
right  of way  and  pipeline acts  had  been introduced,  and                                                                   
legislation broadening the purpose  of the Alaska Natural Gas                                                                   
Authority.  He  believed  that the  administration  had  been                                                                   
responsive to points of inquiry.                                                                                                
                                                                                                                                
9:02:05 PM                                                                                                                    
                                                                                                                                
Representative Gara  stated that he had seen Mr.  Noah in the                                                                   
building,  but had  not  spoken to  him.  He maintained  that                                                                   
there  has   not  been   deliberative  discussion   with  all                                                                   
legislators regarding the plan.                                                                                                 
                                                                                                                                
Representative   Austerman   stated   it  would   have   been                                                                   
appropriate  for a  representative of  the administration  to                                                                   
have briefed committee members on Section 13 of the bill.                                                                       
                                                                                                                                
9:03:41 PM                                                                                                                    
                                                                                                                                
Co-Chair  Hawker  related  that  the bill  is  a  legislative                                                                   
budget. The  administration did  not know this  section would                                                                   
be included. The  issue has been in discussion  among the Co-                                                                   
Chairs   of  both   House   and   Senate  Finance   and   the                                                                   
administration. Ultimately,  the governor's  desire prevailed                                                                   
and  the request  was included  in the  budget. He  clarified                                                                   
that the addition  of Section 13 was made by  the legislature                                                                   
and  not  Mr.  Balash.  Representative   Austerman  expressed                                                                   
frustration  that  the issue  had  not  come up  in  minority                                                                   
caucus  meetings. Co-Chair  Hawker argued  that he would  not                                                                   
discuss caucus matters on the  table. He voiced his amazement                                                                   
with  the administration's  lack  of communication  with  the                                                                   
other members of the committee.                                                                                                 
                                                                                                                                
9:05:50 PM                                                                                                                    
                                                                                                                                
Ms. Rehfeld communicated that  the administration has had the                                                                   
appropriation in  its budget since  December 2008.  A request                                                                   
for  $5  million  was  put  in   specifically  for  ANGDA  in                                                                   
December. It was then increased  to $8 million in the amended                                                                   
budget. She  felt that as the  approach to the  plan evolved,                                                                   
the administration  had maintained  clear communication  with                                                                   
the  committee.   She  added  that  the  governor   has  been                                                                   
consistent in her dialogue on in-state gas.                                                                                     
                                                                                                                                
Representative Kelly pointed out  that Mr. Noah had spoken to                                                                   
him about  the project.  He confirmed  that  he has also  had                                                                   
discussions with Ms. Rehfeld about  the request for ANGDA and                                                                   
was familiar with the section.                                                                                                  
                                                                                                                                
9:07:58 PM                                                                                                                    
                                                                                                                                
Representative Gara remarked that  the earlier request for $5                                                                   
million for  ANGDA, to  follow a  statutory purpose,  had not                                                                   
caused him  alarm. He  emphasized that  the change  grants $9                                                                   
million  to  the  governor to  spend  without  a  statutorily                                                                   
authorized purpose.                                                                                                             
                                                                                                                                
9:09:17 PM                                                                                                                    
                                                                                                                                
Mr. Balash explained the work  plan entails, as a first step,                                                                   
an   alternatives   analysis   to  identify   the   cost   of                                                                   
transportation and  the various routes. In  June, information                                                                   
would be gathered  for applying for major  permits, including                                                                   
rights of way.   In parallel, the deliverability  and reserve                                                                   
life  in  Cook  Inlet  would be  evaluated.    Ways  to  make                                                                   
reserves  last   longer  and  the  possibility   of  stop-gap                                                                   
importation,  in order to  bridge any  gap until natural  gas                                                                   
can  be delivered,  will also  be examined.  More funds  will                                                                   
likely be  requested in 2010  as the customers  and potential                                                                   
suppliers  of gas  are identified.  The goal  is to  be in  a                                                                   
position by  2011; to  take the  collection of major  permits                                                                   
and regulatory  approvals, and  the identified suppliers  and                                                                   
customers, and  present the information  to a  private party,                                                                   
who will than  construct the gasline. In return,  the private                                                                   
party would  reimburse the  state for  the costs incurred  by                                                                   
the  state  for   the  package  of  permits   and  regulatory                                                                   
authorizations.                                                                                                                 
                                                                                                                                
9:12:56 PM                                                                                                                    
                                                                                                                                
Representative Austerman  pointed out that the  change in the                                                                   
budget  would  need to  be  reviewed  by the  Senate  Finance                                                                   
Committee. He wondered  if the section had been  discussed in                                                                   
that body.                                                                                                                      
                                                                                                                                
Co-Chair  Stoltze thought  that the  Senate leadership  would                                                                   
embrace the idea in order to move forward on in-state gas.                                                                      
                                                                                                                                
Representative Crawford expressed  concern with the switch in                                                                   
priority from ANGDA based spur line to ENSTAR bullet line.                                                                      
                                                                                                                                
9:14:05 PM                                                                                                                    
                                                                                                                                
Mr.  Persily pointed  out that  ANGDA's  operating budget  is                                                                   
still funded  from previous  appropriations and can  continue                                                                   
to  operate fully.    He shared  his understanding  that  the                                                                   
additional  funding was  to ensure,  should gas  availability                                                                   
become scarce,  that the state  will have access  to in-state                                                                   
gas.                                                                                                                            
                                                                                                                                
Co-Chair Stoltze  suggested Mr. Balash talk  to any committee                                                                   
members he may  have missed in his first round  of meeting on                                                                   
the issue.                                                                                                                      
                                                                                                                                
Representative  Gara  requested binding  representation  that                                                                   
legislative approval  would be required for  any project from                                                                   
the governor's office concerning the issue.                                                                                     
                                                                                                                                
Mr.  Balash  asked  for  clarification  as to  what  kind  of                                                                   
representation  would be satisfactory.   Representative  Gara                                                                   
suggested  a letter  from governor  ensuring  that the  state                                                                   
would  get full  value for  work  done on  the project,  upon                                                                   
approval of  legislature.  Mr.  Balash agreed to do  that. He                                                                   
perceived that a pipeline would  not be built for $9 million.                                                                   
                                                                                                                                
Co-Chair  Hawker  related  that   the  legislature  has  sole                                                                   
appropriation power.                                                                                                            
                                                                                                                                
9:17:37 PM                                                                                                                    
                                                                                                                                
Representative Foster stated that  he had not been invited to                                                                   
the  meetings on  the subject.  He remarked  that many  House                                                                   
members are tied up in committee  during the day. He felt and                                                                   
that the best way to be sure each  member has the appropriate                                                                   
information on a  bill was for department heads  to go office                                                                   
to office.  He felt  that the committee  had been  caught off                                                                   
guard by the section.                                                                                                           
                                                                                                                                
9:18:40 PM                                                                                                                    
                                                                                                                                
Representative Kelly  felt that the intent language  could be                                                                   
more specific.                                                                                                                  
                                                                                                                                
9:19:49 PM                                                                                                                    
                                                                                                                                
Mr. Armstrong  returned  to explaining  changes in the  bill.                                                                   
On Page 79, Line  6 to Page 80, Line 17 there  are structural                                                                   
changes   to    the   legislature's   lapsing    funds.   The                                                                   
reappropriations  are  for  legislative   audit,  legislative                                                                   
council  and the  legislative  operating budget.  Limitations                                                                   
were placed  in Section C,  Line 24, appropriations  for 50th                                                                   
statehood;  display  of  historical  art  and  artifacts.  An                                                                   
appropriation  for statewide  energy plans  were removed  and                                                                   
put into Section  D, which begins  on Line 29 of Page  79. He                                                                   
said  that the  bill matches  the Senate  version except  the                                                                   
Senate had  some funds  going to  LBA that  are now  going to                                                                   
Legislative Council.                                                                                                            
                                                                                                                                
9:21:48 PM                                                                                                                    
                                                                                                                                
Representative Foster commented  on Lines 26 and 27 regarding                                                                   
Legislative Council.  He wondered if it would  be possible to                                                                   
make  the work  of  Legislative  Council more  accessible  to                                                                   
communities  outside  of  Juneau.   Mr.  Armstrong  suggested                                                                   
bringing  it to  the  attention  of the  Legislative  Council                                                                   
chair when they next meet.                                                                                                      
                                                                                                                                
Vice-Chair Thomas  asked about a statewide energy  plan.  Mr.                                                                   
Armstrong said  that in the version  of the bill sent  out by                                                                   
the  other body,  there had  been  $300,000 lined  out for  a                                                                   
statewide  comprehensive  energy  plan,  to be  conducted  by                                                                   
LB&A. The  plan was removed, and  the funds were  rolled back                                                                   
into section D  of the appropriation. Co-Chair  Stoltze added                                                                   
that  the item  is in  the legislative  branch  and open  for                                                                   
discussion.  Vice-Chair Thomas  stated that  he would  rather                                                                   
hire a  state employee  for the job,  rather than  an out-of-                                                                   
state consultant.                                                                                                               
                                                                                                                                
9:23:54 PM                                                                                                                    
                                                                                                                                
Representative Crawford  questioned the language  on page 80,                                                                   
Lines 2 and 3, "for necessary  legislative capital projects".                                                                   
Mr. Armstrong explained that Legislative  Council has control                                                                   
of  the building  operations during  the interim.   He  added                                                                   
that   it  must   be  an   agenda  item   to  expend   funds.                                                                   
Representative  Crawford asked for  an estimated  amount. Mr.                                                                   
Armstrong said $2 million.                                                                                                      
                                                                                                                                
Representative  Gara thought  that  the reapproprations  from                                                                   
LB&A to  Legislative Council were  excessive.   Mr. Armstrong                                                                   
replied  that most  of the funds  had been  expended for  the                                                                   
projects listed in Section 40.                                                                                                  
                                                                                                                                
9:27:17 PM                                                                                                                    
                                                                                                                                
Mr. Armstrong continued to Page  81, Line 25, which lists the                                                                   
appropriation  set out  for federal stimulus  funds  for DHSS                                                                   
health  care  services,  for a  statewide  electronic  health                                                                   
information exchange system. The  contingent language on Page                                                                   
84,  Line 20,  states  that  SB 133  needs  to  pass for  the                                                                   
mechanism in Section 43 to be funded.                                                                                           
                                                                                                                                
Mr. Armstrong  continued with the  final changes to  the bill                                                                   
in  Sections  22-39,  which correct  a  series  of  technical                                                                   
typos.                                                                                                                          
Mr. Armstrong  explained that  additional appropriations  had                                                                   
come in after the March 25, 2009  deadline, and were added to                                                                   
the bill.  He listed reappropriations by district.                                                                              
                                                                                                                                
9:30:05 PM                                                                                                                    
                                                                                                                                
Mr.  Armstrong noted  that the  change from  Senate to  House                                                                   
Finance funds is outlined on the  bottom right hand corner of                                                                   
Page 2 of the Legislative Finance report.                                                                                       
                                                                                                                                
9:31:05 PM                                                                                                                    
                                                                                                                                
Representative   Salmon  asked   for  clarification   on  the                                                                   
appropriation amount listed on Page 67, Lines 5 to 11.                                                                          
                                                                                                                                
JOHN BITNEY, STAFF,  SPEAKER JOHN HARRIS, explained  that the                                                                   
reappropriation  request  for  that  district.  The  original                                                                   
appropriation to  the city of Delta Junction  of $1.2 million                                                                   
was  to pay  a  litigation settlement  in  a  lawsuit with  a                                                                   
private prison developer. Per  the appropriation in 2000, the                                                                   
city was required  to pay 50,000 each year out  of the city's                                                                   
revenue sharing.  Currently there is an unpaid  balance of $1                                                                   
million  on the  loan. The  original  language contained  the                                                                   
contingency that the loan would  be forgiven if the community                                                                   
incorporated  as  a borough.  The  new language  removes  the                                                                   
contingency.                                                                                                                    
                                                                                                                                
9:34:33 PM                                                                                                                    
                                                                                                                                
Representative  Kelly asked  if the  language on  Line 28  on                                                                   
Page 67,  extends the  LIHEAP general  fund increase  for two                                                                   
more years.  Co-Chair  Hawker replied that it is  a single $9                                                                   
million  appropriation to  DHSSto be  spent between  June 30,                                                                   
2009 and  June 30, 2010.   Representative Kelly asked  it was                                                                   
in addition to funds given during  the 2008 session. Co-Chair                                                                   
Hawker replied yes.                                                                                                             
                                                                                                                                
9:35:59 PM                                                                                                                    
                                                                                                                                
Mr.  Armstrong   reported  that  the  Constitutional   Budget                                                                   
Reserve management  fees had been  removed from the  bill and                                                                   
could be found in the operating budget.                                                                                         
                                                                                                                                
Representative Gara  asked if all  projects in the  bill were                                                                   
reinstatements  of the  governor's requests.   Mr.  Armstrong                                                                   
said that was correct, except for the cruise ship items.                                                                        
                                                                                                                                
Representative  Gara  wondered about  Page  63  of the  bill,                                                                   
which  details  legislative  intent  on gas  line  money.  He                                                                   
understood that  the funds could  be used only for  a private                                                                   
sector project and  that the project would go  from The North                                                                   
Slope  to  Fairbanks and  down  to  the Kenai  Peninsula.  He                                                                   
remarked that the project sounded like the ENSTAR project.                                                                      
                                                                                                                                
Co-Chair  Hawker disagreed.  He contended  that this  was the                                                                   
generic  investigation  of  a   bullet  line  and  that  many                                                                   
companies have  discussed the  possibility of involvement  in                                                                   
the project.  He said  the funds  were to facilitate  private                                                                   
sector construction,  ownership and management,  and that all                                                                   
interested in the project are welcome into the discussion.                                                                      
Representative Gara  relayed that he was not  interested in a                                                                   
project headed by ENSTAR.                                                                                                       
                                                                                                                                
9:39:12 PM                                                                                                                    
                                                                                                                                
Representative Fairclough  shared that ENSTAR  had not talked                                                                   
to her office.                                                                                                                  
                                                                                                                                
Mr. Armstrong said that the legislative  finance reports will                                                                   
not  show  $9  million  as  those  are  considered  operating                                                                   
expenditures.                                                                                                                   
                                                                                                                                
CSSB 75  (FIN) was  heard and HELD  in Committee  for further                                                                   
consideration.                                                                                                                  
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 9:40 PM.                                                                                           
                                                                                                                                
                                                                                                                                

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