Legislature(2013 - 2014)HOUSE FINANCE 519

03/12/2013 01:30 PM FINANCE


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02:25:33 PM Start
02:25:37 PM HB65 || HB66
05:42:11 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Recessed to 9:00 a.m. on 3/13/13 --
+= HB 65 APPROP: OPERATING BUDGET/LOANS/FUNDS TELECONFERENCED
Heard & Held
+= HB 66 APPROP: MENTAL HEALTH BUDGET TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                      March 12, 2013                                                                                            
                         2:25 p.m.                                                                                              
                                                                                                                                
                                                                                                                                
2:25:33 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Austerman called the House Finance Committee                                                                           
meeting to order at 2:25 p.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Alan Austerman, Co-Chair                                                                                         
Representative Bill Stoltze, Co-Chair                                                                                           
Representative Mark Neuman, Vice-Chair                                                                                          
Representative Mia Costello                                                                                                     
Representative Bryce Edgmon                                                                                                     
Representative Les Gara                                                                                                         
Representative Lindsey Holmes                                                                                                   
Representative Scott Kawasaki, Alternate                                                                                        
Representative Cathy Munoz                                                                                                      
Representative Steve Thompson                                                                                                   
Representative Tammie Wilson                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative David Guttenberg                                                                                                 
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Joan Brown, Staff, Representative Alan Austerman; Pete                                                                          
Ecklund, Staff, Representative Alan Austerman.                                                                                  
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 65     APPROP: OPERATING BUDGET/LOANS/FUNDS                                                                                  
                                                                                                                                
          CSHB 65(FIN) was REPORTED out of committee with a                                                                     
          "do pass" recommendation.                                                                                             
                                                                                                                                
          [Note: The  meeting was  recessed until  9:00 a.m.                                                                    
          on March  14, 2013  and CSHB 65(FIN)  reported out                                                                    
          of  committee at  that time.  See  March 14,  2013                                                                    
          minutes for detail.]                                                                                                  
                                                                                                                                
HB 66     APPROP: MENTAL HEALTH BUDGET                                                                                          
                                                                                                                                
          CSHB 66(FIN) was REPORTED out of committee with a                                                                     
          "do pass" recommendation.                                                                                             
                                                                                                                                
          [Note: The  meeting was  recessed until  9:00 a.m.                                                                    
          on March  14, 2013  and CSHB 66(FIN)  reported out                                                                    
          of  committee at  that time.  See  March 14,  2013                                                                    
          minutes for detail.]                                                                                                  
                                                                                                                                
HOUSE BILL NO. 65                                                                                                             
                                                                                                                                
     "An  Act making  appropriations for  the operating  and                                                                    
     loan  program  expenses  of state  government  and  for                                                                    
     certain   programs,    capitalizing   funds,   amending                                                                    
     appropriations,   and   making  reappropriations;   and                                                                    
     providing for an effective date."                                                                                          
                                                                                                                                
HOUSE BILL NO. 66                                                                                                             
                                                                                                                                
     "An  Act making  appropriations for  the operating  and                                                                    
     capital    expenses   of    the   state's    integrated                                                                    
     comprehensive mental health  program; and providing for                                                                    
     an effective date."                                                                                                        
                                                                                                                                
2:25:37 PM                                                                                                                    
                                                                                                                                
Co-Chair Austerman  discussed that the committee  would hear                                                                    
operating  and mental  health budget  amendments during  the                                                                    
meeting.  He shared  his  intent  to incorporate  amendments                                                                    
into a CS that would be  heard the following morning at 9:00                                                                    
a.m.  He  anticipated  reporting  the  bill  from  committee                                                                    
during the meeting.                                                                                                             
                                                                                                                                
Co-Chair  Stoltze asked  if  staff  would present  technical                                                                    
explanations.   Co-Chair   Austerman    responded   in   the                                                                    
affirmative.                                                                                                                    
                                                                                                                                
2:27:38 PM                                                                                                                    
                                                                                                                                
Co-Chair  Austerman  pointed  to  Amendment  1  that  was  a                                                                    
combination of technical amendments to the legislation:                                                                         
                                                                                                                                
     OFFERED BY:    Representative Austerman                                                                                    
                                                                                                                                
     Part A                                                                                                                   
                                                                                                                                
     DEPARTMENT:    Administration                                                                                              
     APPROPRIATION: Violent   Crimes    Compensation   Board                                                                    
     ALLOCATION:    Violent Crimes Compensation Board                                                                           
     DELETE:        $300,000 Crime Victim Compensation Fund                                                                     
     (1220)                                                                                                                     
     EXPLANATION:   This amendment  more closely  aligns the                                                                    
     expenditure   authorization  of   the  Violent   Crimes                                                                    
     Compensation Board  to the anticipated  funds available                                                                    
     in the Crime Victim Compensation Fund.                                                                                     
                                                                                                                                
     Part B                                                                                                                   
                                                                                                                                
     DEPARTMENT:    Commerce,    Community   and    Economic                                                                    
     Development                                                                                                                
     APPROPRIATION: Alcoholic    Beverage   Control    Board                                                                    
     ALLOCATION:    Alcoholic Beverage Control Board                                                                            
     ADD:           $5,400, General Fund Program Receipts                                                                       
     (1005)                                                                                                                     
     DELETE:        $5,400,   Unrestricted    General   Fund                                                                    
     Receipts (1004)                                                                                                            
     EXPLANATION:   The  Alcoholic  Beverage  Control  (ABC)                                                                    
     Board's  budget is  primarily program  receipts. In  FY                                                                    
     12, funding was  transferred to the ABC  Board from the                                                                    
     Department  of Administration  for ETS/EPR  Chargebacks                                                                    
     and  for   Office  of  Administrative   Hearings.  This                                                                    
     amendment  replaces  all  UGF in  the  allocation  with                                                                    
     General Fund Program Receipts.                                                                                             
                                                                                                                                
     Part C                                                                                                                   
                                                                                                                                
     DEPARTMENT:    Commerce,    Community   and    Economic                                                                    
     Development                                                                                                                
     APPROPRIATION: Alaska   Industrial    Development   and                                                                    
     Export Authority                                                                                                           
     ALLOCATION:    Alaska   Industrial    Development   and                                                                    
     Export Authority                                                                                                           
     ADD:           $9,300, Alaska Industrial Development &                                                                     
     Export Authority Receipts (1102)                                                                                           
     DELETE:        $9,300,   Unrestricted    General   Fund                                                                    
     Receipts (1004)                                                                                                            
                                                                                                                                
     Part D                                                                                                                   
                                                                                                                                
     DEPARTMENT:    Corrections                                                                                                 
     APPROPRIATION: Inmate Health Care                                                                                          
     ALLOCATION:    Behavioral Health Care                                                                                      
     DELETE:        $260.0 MHTAAR (1092) IncM transaction                                                                       
     ADD:           $260.0 MHT AAR (l092) IncT transaction                                                                      
     with a funding date range of FY14-FY16                                                                                     
     EXPLANATION:   The   Mental  Health   Trust   Authority                                                                    
     provided an end date ofFY16  for this item. A temporary                                                                    
     increment (IncT)  transaction is more  appropriate when                                                                    
     funding  is added  to  the base  for  a specified  time                                                                    
     period.                                                                                                                    
     Part E                                                                                                                   
                                                                                                                                
     DEPARTMENT:    Education    and    Early    Development                                                                    
     APPROPRIATION: Teaching     and    Learning     Support                                                                    
     ALLOCATION:    Teacher Certification                                                                                       
     ADD:           $10,200, General Fund Program Receipts                                                                      
     (l005)                                                                                                                     
     DELETE:        $10,200,   Unrestricted   General   Fund                                                                    
     Receipts (1004)                                                                                                            
     EXPLANATION:   The  Teacher   Certification  budget  is                                                                    
     primarily   program   receipts.   Starting   in   FY08,                                                                    
     transfers and  salary adjustments added a  small amount                                                                    
     of UGF to  the budget. This amendment  replaces all UGF                                                                    
     in the allocation with General Fund Program Receipts.                                                                      
                                                                                                                                
     Part F                                                                                                                   
                                                                                                                                
     DEPARTMENT:    Law                                                                                                         
     APPROPRIATION: Civil Division                                                                                              
     ALLOCATION:    Torts & Workers' Compensation                                                                               
     DELETE:        $10,400, Unrestricted General Funds                                                                         
     (1004)                                                                                                                     
     DEPARTMENT:    Law                                                                                                         
     APPROPRIATION: Civil Division                                                                                              
     ALLOCATION:    Labor and State Affairs                                                                                     
     ADD:           $10,400, Unrestricted General Funds                                                                         
     (1004)                                                                                                                     
     EXPLANATION:   Although  all UGF  was transferred  from                                                                    
     Torts to Labor  and State Affairs in  FY13, FY14 salary                                                                    
     adjustment calculations  and an associated  fund source                                                                    
     change placed  $10,400 of UGF in  the Torts allocation.                                                                    
     This  is the  only Unrestricted  General Fund  Receipts                                                                    
     (UGF)   within  the   Torts  &   Workers'  Compensation                                                                    
     allocation.  This amendment  transfers the  $10,400 UGF                                                                    
     from the  Torts &  Workers' Compensation  allocation to                                                                    
     the Labor and State Affairs allocation.                                                                                    
                                                                                                                                
     Part G                                                                                                                   
                                                                                                                                
     DEPARTMENT:    Public  Safety  APPROPRIATION: Fire  and                                                                    
     Life Safety                                                                                                                
     AMEND:    The     amount    appropriated     by    this                                                                    
     appropriation   includes   up   to  $125,000   of   the                                                                    
     unexpended and  unobligated balance  on June  30, 2013,                                                                    
     of the receipts collected under AS 18. 70.080(b).                                                                          
     EXPLANATION:   Based  on excess  balances for  the past                                                                    
     three  fiscal   years,  $125,000  appears   to  provide                                                                    
     sufficient  carry forward  potential for  the Fire  and                                                                    
     Life Safety appropriation.                                                                                                 
                                                                                                                                
     Part H                                                                                                                   
                                                                                                                                
     DEPARTMENT:    Public Safety                                                                                               
     APPROPRIATION: Alaska Police Standards Council                                                                             
     AMEND:         The   amount    appropriated   by   this                                                                    
     appropriation   includes   up   to  $125,000   of   the                                                                    
     unexpended and  unobligated balance  on June  30, 2013,                                                                    
     of  the receipts  collected under  AS 12.25.195(c),  AS                                                                    
     12.55.039, AS 28.05.151, and  AS 29.25.074 and receipts                                                                    
     collected under AS 18.65.220(7).                                                                                           
     EXPLANATION:   This   conditional  language   has  been                                                                    
     included  in   the  Alaska  Police   Standards  Council                                                                    
     appropriation for several years  with a cap of$125,000.                                                                    
     Removal  of   this  cap  was  requested   in  the  FYl4                                                                    
     Governor's  request and  is  being  restored with  this                                                                    
     amendment.                                                                                                                 
                                                                                                                                
     Part I                                                                                                                   
                                                                                                                                
     DEPARTMENT:    Public Safety                                                                                               
     APPROPRIATION: Statewide Support                                                                                           
     ALLOCATION:    Statewide     Information     Technology                                                                    
     Services                                                                                                                   
     AMEND:         The amount allocated for Statewide                                                                          
     Information   Technology   Services  includes   up   to                                                                  
     $125,000 of  the unexpended and unobligated  balance on                                                                  
     June  30,  2013,  of  the  receipts  collected  by  the                                                                    
     Department of  Public Safety from the  Alaska automated                                                                    
     fingerprint system under AS 44.41.025(b).                                                                                  
     EXPLANATION:   This  conditional   language  has   been                                                                    
     included  in   the  Statewide   Information  Technology                                                                    
     Services   (formerly   Alaska  Criminal   Records   and                                                                    
     Identification)  allocation for  several  years with  a                                                                    
     cap of $125,000.  Removal of this cap  was requested in                                                                    
     the  FY 14  Governor's  request and  is being  restored                                                                    
     with this amendment.                                                                                                       
                                                                                                                                
     Part J                                                                                                                   
                                                                                                                                
     DEPARTMENT:    Transportation  and   Public  Facilities                                                                    
     APPROPRIATION: Design,  Engineering   and  Construction                                                                    
     ALLOCATION:    Central Design and Engineering Services                                                                     
                                                                                                                                
     Page 35, lines 24-27, amend as follows:                                                                                    
     The   amount   allocated   for   Central   Design   and                                                                    
     Engineering   Services    [COMPONENTS]   includes   the                                                                    
     unexpended and unobligated balance  on June 30, 2013[,]                                                                    
     of  [THE] general  fund program  receipts collected  by                                                                    
     the Department of  Transportation and Public Facilities                                                                    
    for the sale [AND] or lease of excess right-of-way.                                                                         
     ALLOCATION: Northern Design and Engineering Services                                                                       
                                                                                                                                
     Page 35, lines 30-33, amend as follows:                                                                                    
                                                                                                                                
     The   amount   allocated   for  Northern   Design   and                                                                    
     Engineering   Services    [COMPONENTS]   includes   the                                                                    
     unexpended and unobligated balance  on June 30, 2013[,]                                                                    
     of  [THE] general  fund program  receipts collected  by                                                                    
     the Department of  Transportation and Public Facilities                                                                    
    for the sale [AND] or lease of excess right-of-way.                                                                         
     ALLOCATION: Southeast Design and Engineering Services                                                                      
                                                                                                                                
     Page 36, lines 5-8, amend as follows:                                                                                      
                                                                                                                                
     The   amount  allocated   for   Southeast  Design   and                                                                    
     Engineering   Services    [COMPONENTS]   includes   the                                                                    
     unexpended and unobligated balance  on June 30, 2013[,]                                                                    
     of  [THE] general  fund program  receipts collected  by                                                                    
     the Department of  Transportation and Public Facilities                                                                    
    for the sale [AND] or lease of excess right-of-way.                                                                         
     APPROPRIATION: Marine Highway System                                                                                       
     ALLOCATION:    Marine Vessel Operations                                                                                    
     Remove   "Southeast   Alaska"  from   the   transaction                                                                    
     decrementing   $2,861.0  from   this  allocation.   The                                                                    
     decrement  would then  apply to  generic service  level                                                                    
     reductions, cost control and efficiencies.                                                                                 
                                                                                                                                
     Part K                                                                                                                   
                                                                                                                                
     AGENCY:        Legislature                                                                                                 
     APPROPRIATION: Budget and Audit Committee                                                                                  
     ALLOCATION:    Legislative Audit                                                                                           
     ADD:           $100,000, Unrestricted General Fund                                                                         
     Receipts (1004) IncT (FY14-FY15)                                                                                           
     DELETE:        $100,000, Unrestricted General Fund                                                                         
     Receipts (1004) Inc                                                                                                        
     EXPLANATION:  Because this increment is associated                                                                         
     with a specific audit, a temporary increment is more                                                                       
     appropriate than an addition to the base budget.                                                                           
                                                                                                                                
JOAN BROWN, STAFF,  REPRESENTATIVE ALAN AUSTERMAN, explained                                                                    
the  different parts  of  the Amendment  1.  Part A  deleted                                                                    
$300,000 from  the Crime Victim  Compensation Fund  from the                                                                    
Violent Crimes  Compensation Board  to align the  funding of                                                                    
the board with the amount  anticipated within the fund. Part                                                                    
B included a  fund source switch for  the Alcoholic Beverage                                                                    
Control (ABC) Board; unrestricted  general funds was deleted                                                                    
and replaced  with program receipts. Part  C replaced $9,300                                                                    
of   unrestricted   general   fund  receipts   with   Alaska                                                                    
Industrial   Development  and   Export  Authority,   (AIDEA)                                                                    
receipts.  She  communicated that  many  of  the items  were                                                                    
small  amounts of  salary adjustments  that had  accumulated                                                                    
over time (the  AIDEA item was related to part  of the core-                                                                    
services distribution  that had  been made). Part  D changed                                                                    
an  IncM  (maintenance  increment) transaction  to  an  IncT                                                                    
(temporary increment) because it was for a temporary two-                                                                       
year period.                                                                                                                    
                                                                                                                                
Co-Chair Stoltze MOVED to  ADOPT Amendment 1. Representative                                                                    
Holmes OBJECTED for discussion.                                                                                                 
                                                                                                                                
Ms.  Brown  continued  to  explain  the  amendment.  Part  E                                                                    
replaced $10,200 of unrestricted  general fund receipts with                                                                    
general  fund program  receipts.  She moved  to  Part F  and                                                                    
detailed that previously  all of the general  funds had been                                                                    
transferred  from   the  Torts  and   Workers'  Compensation                                                                    
allocation to  the Labor and  State Affairs  allocation; the                                                                    
amendment would transfer the  remaining general fund amount.                                                                    
Parts G through I  put a cap of up to  $125,000 on the carry                                                                    
forward amount.  Part J included wording  changes to Section                                                                    
1 of HB  65 related to the Central,  Northern, and Southeast                                                                    
Design  and Engineering  Services  under  the Department  of                                                                    
Transportation  and  Public   Facilities  (DOT).  The  words                                                                    
"Southeast Alaska"  had been removed  from a  Marine Highway                                                                    
System increment  in order  for the  allocation to  apply to                                                                    
the  entire   Marine  Highway  Vessel  Operations.   Part  K                                                                    
included  a  technical  change   in  the  Legislative  Audit                                                                    
allocation;  an  increment  had  been  changed  to  an  IncT                                                                    
because it related to FY 14 and FY 15.                                                                                          
                                                                                                                                
Vice-Chair Neuman commented on  the amendment related to the                                                                    
removal  of  the words  "Southeast  Alaska"  in Part  J.  He                                                                    
explained that  the change  clarified that  equal reductions                                                                    
had been made to each part  of the state. He believed it was                                                                    
important  to  point  out  so   the  public  understood  the                                                                    
committee's efforts  to treat the  state regions  fairly. He                                                                    
referred  to  a  conversation   with  the  DOT  commissioner                                                                    
related to the Southwestern ferry route.                                                                                        
                                                                                                                                
2:33:17 PM                                                                                                                    
                                                                                                                                
Representative Gara  pointed to parts  A and B  of Amendment                                                                    
1. He  wondered how the  removal of $300,000 from  the Crime                                                                    
Victim Compensation Fund would not  take away money from the                                                                    
Violent Crimes Compensation Board.                                                                                              
                                                                                                                                
Ms. Brown replied  that when the committee had  adopted a CS                                                                    
the prior  week it  had reduced money  going into  the Crime                                                                    
Victim  Compensation Fund  by $674,000.  The board's  budget                                                                    
was $2.8  million; of the  total, $1.8 million was  from the                                                                    
fund.  The   reduction  of   $300,000  would   equalize  the                                                                    
expenditure  authorization  as  a  result  of  the  $674,000                                                                    
reduction in  the CS.  She noted that  there was  some carry                                                                    
forward expected.                                                                                                               
                                                                                                                                
Representative Gara  queried the rationale for  reducing the                                                                    
money  designated for  the Crime  Victim Compensation  Fund.                                                                    
Ms.  Brown answered  that  the reduction  had  been made  in                                                                    
order to return to the  90/10 percent split of the Permanent                                                                    
Fund  Dividend  criminal  funds between  the  Department  of                                                                    
Corrections and the Crime Victim Compensation Fund.                                                                             
                                                                                                                                
Representative Gara asked whether the  funds under Part B of                                                                    
Amendment  1 would  be  removed from  the  alcohol tax.  Ms.                                                                    
Brown  replied Part  B  would switch  the  fund source  from                                                                    
unrestricted  general funds  to ABC  Board's normal  program                                                                    
receipt fund source.                                                                                                            
                                                                                                                                
Representative Gara asked if the  alcohol tax was the normal                                                                    
fund source.                                                                                                                    
                                                                                                                                
2:35:53 PM                                                                                                                    
                                                                                                                                
Ms. Brown  replied in the  negative; the ABC  Board's normal                                                                    
fund source was general fund program receipts.                                                                                  
                                                                                                                                
Representative  Holmes WITHDREW  her OBJECTION.  There being                                                                    
NO further OBJECTION, Amendment 1 was ADOPTED.                                                                                  
                                                                                                                                
Co-Chair Austerman MOVED to ADOPT Amendment 2:                                                                                  
                                                                                                                                
     OFFERED BY:    Rep. Austerman                                                                                              
                                                                                                                                
     DEPARTMENT:    Administration                                                                                              
     APPROPRIATION: Enterprise      Technology      Services                                                                    
     ALLOCATION:    ALMR  Payment  on  Behalf  of  Political                                                                    
     Subdivisions (new)                                                                                                         
     ADD:           $500,000 general funds (1004)                                                                               
     EXPLANATION:   The   Governor's   budget   included   a                                                                    
     $500,000  language appropriation  to the  Department of                                                                    
     Commerce,  Community,  and  Economic  Development.  The                                                                    
     department  would have  transferred  the  funds to  the                                                                    
     Department of Administration as  a payment on behalf of                                                                    
     political  subdivisions  for  the  Alaska  Land  Mobile                                                                    
     Radio  system  under   a  cost  allocation  methodology                                                                    
     adopted  by  the  Department  of  Administration.  This                                                                    
     amendment retains  the original purpose of  the funding                                                                    
     without the unnecessary transfer between departments.                                                                      
                                                                                                                                
Co-Chair Stoltze OBJECTED for discussion.                                                                                       
                                                                                                                                
Co-Chair  Austerman explained  that  Amendment  2 would  add                                                                    
$500,000 in  general funds to  the Alaska Land  Mobile Radio                                                                    
(ALMR)  system.  He highlighted  that  a  certain amount  of                                                                    
money was allocated every year  in revenue sharing and other                                                                    
means.   The   increment   was  on   behalf   of   political                                                                    
subdivisions.                                                                                                                   
                                                                                                                                
Co-Chair Stoltze WITHDREW his OBJECTION.                                                                                        
                                                                                                                                
Vice-Chair Neuman  asked if the  absence of the  funds would                                                                    
take money  away from communities or  whether the Department                                                                    
of Administration could absorb the loss in its budget.                                                                          
                                                                                                                                
Co-Chair Austerman responded  that municipalities would have                                                                    
to absorb the costs if the increment was not funded.                                                                            
                                                                                                                                
2:37:33 PM                                                                                                                    
                                                                                                                                
Representative  Thompson   pointed  out  that   without  the                                                                    
amendment communities  would be charged. He  provided detail                                                                    
on amounts that communities would  be responsible for in the                                                                    
absence of  the amendment:  the City  of Fairbanks  would be                                                                    
responsible  for  $95,000,  the  borough's  share  would  be                                                                    
$56,000,  the North  Star Fire  Department's share  would be                                                                    
$8,000  (the department's  budget was  small and  $8,000 was                                                                    
its  total  training budget),  and  Salcha  Fire and  Rescue                                                                    
would owe $1,600 (they did not  have the money to spend). He                                                                    
added  that many  small fire  departments did  not have  the                                                                    
funding available.                                                                                                              
                                                                                                                                
Representative   Kawasaki   wondered    whether   the   cost                                                                    
allocation  methodology  was  the same  as  the  methodology                                                                    
currently used by Department of Administration.                                                                                 
                                                                                                                                
Co-Chair Austerman believed so, but was not positive.                                                                           
                                                                                                                                
Representative  Kawasaki  asked  for verification  that  the                                                                    
intent  was  to  use  the  existing  language  utilized  for                                                                    
reimbursement  rates  under  ALMR.   He  surmised  that  the                                                                    
numbers listed by Representative  Thompson were in alignment                                                                    
with existing methodology.                                                                                                      
                                                                                                                                
There being NO further OBJECTION, Amendment 2 was ADOPTED.                                                                      
                                                                                                                                
Co-Chair Austerman MOVED to ADOPT Amendment 3:                                                                                  
                                                                                                                                
     OFFERED BY: Rep. Austerman                                                                                                 
                                                                                                                                
     DEPARTMENT:    Commerce,    Community   and    Economic                                                                    
     Development                                                                                                                
     APPROPRIATION: Alaska   Seafood   Marketing   Institute                                                                    
     ALLOCATION:    Alaska   Seafood   Marketing   Institute                                                                    
     LANGUAGE:      Amend section 12(h)(3) page 59, lines                                                                       
     15-17, to read:                                                                                                            
          (3) The sum of $7,286,400[$7,772,200] from the                                                                        
     general  fund, for  the  purpose  of matching  industry                                                                    
     contributions   collected   by   the   Alaska   Seafood                                                                    
     Marketing  Institute for  the fiscal  year ending  June                                                                    
     30, 2012;                                                                                                                  
     EXPLANATION:   This reduction of  $485,800 is 1/16th of                                                                    
     ASMI's  unrestricted  general fund  appropriation,  the                                                                    
     same  percentage   general  fund  reduction   that  was                                                                    
     assessed  to  tourism  marketing. ASMI  has  sufficient                                                                    
     general fund  program receipt carry forward  revenue to                                                                    
    mitigate the impact of this general fund reduction.                                                                         
                                                                                                                                
Representative Gara OBJECTED.                                                                                                   
                                                                                                                                
Co-Chair Austerman  explained that  Amendment 3  removed the                                                                    
same  amount of  general fund  money on  a percentage  basis                                                                    
from the  Alaska Seafood Marketing  Institute (ASMI)  as was                                                                    
taken from tourism marketing.                                                                                                   
                                                                                                                                
Representative  Gara   asked  if  the   amendment  allocated                                                                    
$500,000  less   to  ASMI   than  the   budget  subcommittee                                                                    
recommended.   Co-Chair    Austerman   replied    that   the                                                                    
subcommittee recommendation had been to remove $1 million.                                                                      
                                                                                                                                
Representative Gara  concluded that  Amendment 3  would only                                                                    
remove $500,000 from ASMI's general fund appropriation.                                                                         
                                                                                                                                
2:40:06 PM                                                                                                                    
                                                                                                                                
Co-Chair  Stoltze noted  that no  one was  suggesting giving                                                                    
the  tourism  industry  exclusive  use  of  state's  natural                                                                    
resources.  He made  a remark  about the  fishing industry's                                                                    
exclusive use of Kachemak Bay.                                                                                                  
                                                                                                                                
There being NO further OBJECTION, Amendment 3 was ADOPTED.                                                                      
                                                                                                                                
Representative Wilson MOVED to ADOPT Amendment 4:                                                                               
                                                                                                                                
     OFFERED BY: Reps. Wilson and Austerman                                                                                     
                                                                                                                                
     DEPARTMENT:    Education & Early Development                                                                               
     APPROPRIATION: Teaching & Learning Support                                                                                 
     ALLOCATION:    Student & School Achievement                                                                                
     DELETE:        $2,611,800 general funds (1004)                                                                             
     DELETE THE FOLLOWING INTENT:                                                                                               
     It  is   the  intent   of  the  legislature   that  the                                                                    
     department work  with the Association of  Alaska School                                                                    
     Boards   and   school    districts   to   ensure   that                                                                    
     digitization  One-to-One  funding  is used  to  provide                                                                    
     professional development  in the  form of  training for                                                                    
     teachers  involved in  working  with new  technologies.                                                                    
     The   legislature  wants   to  ensure   that  equipment                                                                    
     purchased  with the  digitization  funding  be used  to                                                                    
     full advantage  to provide the  best and  most complete                                                                    
     education  experience   possible.  The   department  is                                                                    
     requested to  report to the legislature  by January 15,                                                                    
     2014,  regarding   the  progress  and  status   of  the                                                                    
     project.                                                                                                                   
     ALLOCATION:    Online with Libraries (OWL) (new)                                                                           
     ADD:           $761,800 general funds (1004)                                                                               
     ALLOCATION:    Live Homework Help (new)                                                                                    
     ADD:           $138,200 general funds (1004)                                                                               
     EXPLANATION:   This amendment  deletes $2.6  million GF                                                                    
     that was accepted in subcommittee  (of the $5.9 million                                                                    
     requested by  the Governor for digitizing  education in                                                                    
     Alaska).  It also  creates two  new allocations  within                                                                    
     Teaching  and Learning  Support and  funds them  at the                                                                    
     amounts  requested  by  the  Governor.  This  amendment                                                                    
     reduces the subcommittee  recommendation by $1,711,800.                                                                    
     With  the  approval  of   this  amendment,  the  Alaska                                                                    
     Learning  Network (AKLN)  ($1.1 million)  and Statewide                                                                    
     Technology Rollout ($3.9 million) will not be funded.                                                                      
                                                                                                                                
Co-Chair Stoltze OBJECTED for discussion.                                                                                       
                                                                                                                                
Representative  Wilson explained  that  Amendment 4  deleted                                                                    
$2,611,800  general funds  and reallocated  $761,800 to  the                                                                    
Online  With  Libraries  (OWL)  program  for  100  community                                                                    
library/schools. The  amendment would also  provide $138,200                                                                    
for the Live  Homework Help program. She  furthered that the                                                                    
amendment removed  funding from the Alaska  Learning Network                                                                    
and the  one-on-one digital  learning program.  She detailed                                                                    
that  the digital  program would  have  eventually needed  a                                                                    
minimum of  $16 million with  a 60/40 percent  split between                                                                    
state and  district funds respectively. She  stated that due                                                                    
to the uncertainty of future  state funds, investment in the                                                                    
programs was too costly.                                                                                                        
                                                                                                                                
2:42:13 PM                                                                                                                    
                                                                                                                                
Representative  Gara  MAINTAINED  his OBJECTION.  He  stated                                                                    
that    the    amendment    reduced    the    subcommittee's                                                                    
recommendation for digital learning  funds. He supported the                                                                    
Live Homework Help and OWL  programs, but he did not support                                                                    
the removal of  $1 million from the  Alaska Learning Network                                                                    
and $3.9 million from the  one-to-one technology program. He                                                                    
stressed  that money  for the  Alaska  Learning Network  was                                                                    
important  because the  program  allowed  rural students  to                                                                    
access  quality courses  that would  enable them  to qualify                                                                    
for the governor's Alaska  Performance Scholarship (APS). He                                                                    
emphasized  that the  highest quality  courses came  through                                                                    
the learning network  on a consistent basis.  He stated that                                                                    
the  goal  was  to  provide rural  students  with  the  same                                                                    
opportunity  as urban  students. He  emphasized that  if the                                                                    
state was going to invest  in digital learning, it should do                                                                    
it right.  He was open to  the deletion of a  portion of the                                                                    
$3.9 million  because the one-to-one technology  program had                                                                    
not  been explained  well and  more information  was needed;                                                                    
however, he  was uncomfortable  deleting the  entire amount.                                                                    
He would  not be surprised  by a law  suit if the  state did                                                                    
not  provide  access  to  the   courses  necessary  for  APS                                                                    
eligibility.                                                                                                                    
                                                                                                                                
2:45:22 PM                                                                                                                    
                                                                                                                                
Representative  Wilson responded  that  the Alaska  Learning                                                                    
Network  had been  started two  years  earlier with  federal                                                                    
stimulus funding.  She stated that stimulus  funding had not                                                                    
been  intended for  the implementation  of programs  because                                                                    
states would  be responsible for  funding the  programs when                                                                    
federal money  ended. She furthered  that the  Department of                                                                    
Education and Early Development  (DEED) had used the federal                                                                    
funding    for   programs;    there   were    138   students                                                                    
participating.  Her staff  had called  all school  districts                                                                    
(when  the  increment had  been  denied  the past  year)  to                                                                    
determine  whether  schools  had   access  to  other  online                                                                    
learning; she  had been assured  by all districts  that they                                                                    
did have other  access. She stated that  the Alaska Learning                                                                    
Network  contained  40  programs. She  opined  that  another                                                                    
entity could fund  the item; she believed  the program could                                                                    
be self-sufficient.                                                                                                             
                                                                                                                                
Representative Gara did not believe  the state should punish                                                                    
schools  that   were  receiving  less   per-student  funding                                                                    
currently than they were four  years earlier because federal                                                                    
funding  could not  be replaced.  He  stressed that  funding                                                                    
decisions should  be based  on the  worthiness of  a program                                                                    
and not  whether it had  been funded with federal  money; he                                                                    
believed the [Alaska Learning Network] program was worthy.                                                                      
                                                                                                                                
Vice-Chair   Neuman  stated   that  funding   had  increased                                                                    
considerably  for  schools  over  the past  four  years.  He                                                                    
believed the programs were great,  but stated that the money                                                                    
was not available. He supported Amendment 4.                                                                                    
                                                                                                                                
2:48:07 PM                                                                                                                    
                                                                                                                                
A roll call vote was taken  on the motion to adopt Amendment                                                                    
4.                                                                                                                              
                                                                                                                                
IN FAVOR: Munoz,   Neuman,   Thompson,   Wilson,   Costello,                                                                    
Holmes, Stoltze, Austerman                                                                                                      
OPPOSED: Edgmon, Gara, Kawasaki                                                                                                 
                                                                                                                                
The MOTION  PASSED (8/3). There being  NO further OBJECTION,                                                                    
Amendment 4 was ADOPTED.                                                                                                        
                                                                                                                                
Representative Munoz WITHDREW Amendment 5.                                                                                      
                                                                                                                                
2:49:32 PM                                                                                                                    
                                                                                                                                
Representative Wilson MOVED to ADOPT Amendment 6:                                                                               
                                                                                                                                
     OFFERED BY:    Reps.  Wilson, Thompson,  Neuman, Munoz,                                                                    
     Edgmon, Holmes, Costello, Stoltze and Austerman                                                                            
                                                                                                                                
     DEPARTMENT:    Education    and    Early    Development                                                                    
     APPROPRIATION: Teaching     and    Learning     Support                                                                    
     ALLOCATION:    Early Learning Coordination                                                                                 
     ADD:           $100,000 General Fund (1004)                                                                                
     EXPLANATION:   This amendment restores  $100,000 to the                                                                    
     Best Beginnings  program. Best  Beginnings is  a public                                                                    
     private partnership  that works  to ensure  children in                                                                    
     Alaska  begin  school  ready to  learn  in  communities                                                                    
     statewide.                                                                                                                 
                                                                                                                                
Representative Gara OBJECTED.                                                                                                   
                                                                                                                                
Representative  Wilson  explained  that  Amendment  6  would                                                                    
restore  $100,000  to  the   Best  Beginnings  program.  She                                                                    
detailed that  public testimony indicated the  importance of                                                                    
the  program.  She  pointed  to   matching  funds  given  to                                                                    
communities.                                                                                                                    
                                                                                                                                
Representative   Gara  MOVED   to  AMEND   Amendment  6   by                                                                    
increasing the amount by $37,500.                                                                                               
                                                                                                                                
Representative Wilson OBJECTED.                                                                                                 
                                                                                                                                
Representative  Gara  explained  that  Best  Beginnings  had                                                                    
received $937,500  the prior year. He  stated that Amendment                                                                    
6 would restore part of the  funding. He did not believe the                                                                    
program deserved to  be cut. He opined that the  state had a                                                                    
patchwork   of  inadequate   early  learning   services.  He                                                                    
furthered that  Best Beginnings  had been  doing a  good job                                                                    
with the  small amount of  money it had received.  He opined                                                                    
that a 3.5  to 4 percent reduction from  the program's prior                                                                    
year  budget was  not  justified. He  asked  to restore  the                                                                    
money to  the prior year  funding level. He noted  that flat                                                                    
funding the program would not keep up with inflation.                                                                           
                                                                                                                                
2:51:31 PM                                                                                                                    
                                                                                                                                
Representative  Edgmon  believed  the issue  epitomized  the                                                                    
difficulty  of  making  tough   choices.  He  supported  the                                                                    
underlying  amendment  because  it   restored  some  of  the                                                                    
funding  for  Best Beginnings.  He  would  like to  see  the                                                                    
entire amount  restored, but  understood that  tough choices                                                                    
were necessary. He opposed the amendment to Amendment 6.                                                                        
                                                                                                                                
A roll call vote was taken  on the motion to amend Amendment                                                                    
6.                                                                                                                              
                                                                                                                                
IN FAVOR: Gara, Kawasaki                                                                                                        
OPPOSED:   Neuman,  Thompson,   Wilson,  Costello,   Edgmon,                                                                    
Holmes, Munoz, Austerman, Stoltze                                                                                               
                                                                                                                                
The MOTION FAILED (2/9).                                                                                                        
                                                                                                                                
2:53:22 PM                                                                                                                    
                                                                                                                                
Representative Gara  WITHDREW his OBJECTION to  Amendment 6.                                                                    
There being NO further OBJECTION, Amendment 6 was ADOPTED.                                                                      
                                                                                                                                
Representative Munoz MOVED to ADOPT Amendment 7:                                                                                
                                                                                                                                
     OFFERED BY: Reps. Munoz and Austerman                                                                                      
                                                                                                                                
     DEPARTMENT:    Department        of       Environmental                                                                    
     Conservation                                                                                                               
     APPROPRIATION: Spill Prevention and Response                                                                               
     ADD:           It is the intent of the legislature                                                                         
     that  the  Department   of  Environmental  Conservation                                                                    
     provide  recommendations  to   the  legislature  on  or                                                                    
     before the start  of the second session  of the Twenty-                                                                    
     eighth  Alaska  State  Legislature, January  21,  2014,                                                                    
     that  identify ways  to manage  the  oil and  hazardous                                                                    
     substance  release prevention  and response  fund as  a                                                                    
     viable, long-term  funding source for the  state's core                                                                    
     spill  prevention and  response  initiatives. The  plan                                                                    
     should include  an analysis of prior  expenditures from                                                                    
     the   fund   for   the   remediation   of   state-owned                                                                    
     contaminated  sites  and  a proposal  to  expeditiously                                                                    
     remediate state owned contaminated sites.                                                                                  
     EXPLANATION:   The    Department    of    Environmental                                                                    
     Conservation has noted in  its detail budget submission                                                                    
     that managing  the oil and hazardous  substance release                                                                    
     prevention  and response  fund as  a viable,  long-term                                                                    
     funding source  for the  state's core  spill prevention                                                                    
     and response initiatives is  critical, according to the                                                                    
     Legislative Finance Division.                                                                                              
                                                                                                                                
     Agency  projections show  that revenues  collected from                                                                    
     the  four-cent per  barrel  conservation surcharge  are                                                                    
     not  adequate to  fund  spill  prevention and  response                                                                    
     programs. The surcharge revenue  is the primary funding                                                                    
     source for  the prevention account and  that revenue is                                                                    
     not   sufficient  to   sustain   Alaska's  core   spill                                                                    
    prevention and response program over the long term.                                                                         
                                                                                                                                
     Beginning   in  Fiscal   Year   2015,  annual   funding                                                                    
     available  from  this  account  will  be  at  least  $5                                                                    
     million  less than  will be  required  to continue  the                                                                    
     current level of service. Members  of the House Finance                                                                    
     Department   of   Environmental   Conservation   Budget                                                                    
     Subcommittee expressed an interest  in working with the                                                                    
     administration   to  find   a  way   to  address   this                                                                    
     shortfall. This  intent language encourages  the agency                                                                    
     to do so.                                                                                                                  
                                                                                                                                
Representative Kawasaki OBJECTED for discussion.                                                                                
                                                                                                                                
Representative  Munoz explained  that  the Spill  Prevention                                                                    
and Response Fund was funded with  a $0.05 per barrel of oil                                                                    
surcharge.  The fund  was  anticipated to  be  running at  a                                                                    
deficit by  FY 15;  approximately $5  million less  than the                                                                    
projected  amount needed  to provide  the  current level  of                                                                    
service. The  amendment contained intent  language directing                                                                    
the  Department  of   Environmental  Conservation  (DEC)  to                                                                    
provide  specific  recommendations  to the  legislature  the                                                                    
following session on  how to make the fund  solvent over the                                                                    
long-term.                                                                                                                      
                                                                                                                                
2:54:26 PM                                                                                                                    
                                                                                                                                
Representative   Kawasaki   WITHDREW   his   OBJECTION.   He                                                                    
supported the amendment and believed  the intent was to make                                                                    
the fund solvent to address remediation issues.                                                                                 
                                                                                                                                
There being NO further OBJECTION, Amendment 7 was ADOPTED.                                                                      
                                                                                                                                
2:55:07 PM                                                                                                                    
                                                                                                                                
Representative Munoz MOVED to ADOPT Amendment 8:                                                                                
                                                                                                                                
     OFFERED BY:    Reps. Munoz and Austerman                                                                                   
                                                                                                                                
     DEPARTMENT:    Department        of       Environmental                                                                    
     Conservation                                                                                                               
     APPROPRIATION: Water                                                                                                       
     ADD:           It is the intent of the legislature                                                                         
     that the  Department of Environmental  Conservation, to                                                                    
     the extent feasible,  make information regarding cruise                                                                    
     ship  mixing   zones,  including   geographical  areas,                                                                    
     available to the public on the agency's web site.                                                                          
     EXPLANATION:   The   House    Finance   Department   of                                                                    
     Environmental    Conservation    Budget    Subcommittee                                                                    
     discussed how  to help keep the  public better informed                                                                    
     about cruise  ship discharges, especially  near fishing                                                                    
     grounds and other areas. The  agency is working on ways                                                                    
     to post on-line more  information about its activities.                                                                    
     This  intent  language  encourages  the  department  to                                                                    
     continue  doing  so  in  regards  to  its  cruise  ship                                                                    
     program.                                                                                                                   
                                                                                                                                
Representative Kawasaki OBJECTED.                                                                                               
                                                                                                                                
Representative  Munoz  explained  that  Amendment  8  was  a                                                                    
result of  budget subcommittee work for  DEC. She elaborated                                                                    
that the  amendment included  intent language  directing the                                                                    
department  to   make  information  regarding   cruise  ship                                                                    
discharge  available to  the public  on its  website to  the                                                                    
extent  feasible. She  believed  the amendment  was in  line                                                                    
with  the  department's  current   work  to  upgrade  online                                                                    
information reporting.                                                                                                          
                                                                                                                                
Representative  Kawasaki  discussed  reservations  with  the                                                                    
language "to  the extent feasible"  related to  dealing with                                                                    
the  department.  He was  concerned  that  the language  may                                                                    
allow the department  to report the following  year that the                                                                    
change  was  not  feasible.  He   rejected  the  notion  and                                                                    
believed  that  DEC  could easily  include  the  information                                                                    
online.   He  noted   that  the   department  received   the                                                                    
information  digitally  and that  it  was  easy to  track  a                                                                    
ship's location.  He MOVED  to AMEND  Amendment 8  to delete                                                                    
the language "to the extent feasible."                                                                                          
                                                                                                                                
Co-Chair   Austerman  asked   for   verification  that   the                                                                    
amendment  would   remove  the   language  "to   the  extent                                                                    
feasible."                                                                                                                      
                                                                                                                                
Co-Chair  Stoltze  OBJECTED  to  amendments  that  were  not                                                                    
written out.                                                                                                                    
                                                                                                                                
2:57:29 PM                                                                                                                    
                                                                                                                                
Representative Kawasaki  offered to  write the  amendment to                                                                    
Amendment  8.  Co-Chair  Austerman would  hold  Amendment  8                                                                    
while an amendment was drafted.                                                                                                 
                                                                                                                                
Representative Munoz WITHDREW Amendment 9.                                                                                      
                                                                                                                                
2:58:10 PM                                                                                                                    
                                                                                                                                
Co-Chair Austerman MOVED to ADOPT Amendment 10:                                                                                 
                                                                                                                                
     OFFERED BY:    Representative Austerman                                                                                    
                                                                                                                                
     DEPARTMENT:    Fish and Game                                                                                               
     APPROPRIATION: Commercial Fisheries                                                                                        
    ALLOCATION:    Westward Region Fisheries Management                                                                         
     ADD:           $150,000 Test Fisheries Receipts (1109)                                                                     
     EXPLANATION:   This provides additional  funding so the                                                                    
     golden king  crab observers are  funded from  test fish                                                                    
     receipts as are  the observers for the  Bristol Bay red                                                                    
     king  crab and  snow  crab fisheries.  This request  is                                                                    
     unanimously  supported by  the Crab  Observer Oversight                                                                    
     Task Force.                                                                                                                
                                                                                                                                
Vice-Chair Neuman OBJECTED for discussion.                                                                                      
                                                                                                                                
Co-Chair Austerman  explained that  Amendment 10  related to                                                                    
the  Department  of  Fish  and   Game's  (DFG)  practice  of                                                                    
managing  fisheries with  industry funded  management costs.                                                                    
The  amendment funded  a test  fisheries receipt  that would                                                                    
allow DFG  to conduct a test  fishery with crab in  order to                                                                    
manage  biomass and  to  determine how  much  to release  to                                                                    
fishermen. He believed the amount  would come off the top of                                                                    
the quota fishermen were allowed.                                                                                               
                                                                                                                                
Vice-Chair Neuman  surmised that the test  fishery observers                                                                    
would  catch  the fish,  the  product  would  be sold  to  a                                                                    
canary,  and DFG  would receive  proceeds for  the sale.  He                                                                    
asked for verification that the item would be funded by                                                                         
receipts from the proceeds.                                                                                                     
                                                                                                                                
Co-Chair Austerman replied in the affirmative.                                                                                  
                                                                                                                                
Vice-Chair Neuman asked for verification that the                                                                               
allocation was not an increase in the budget. Co-Chair                                                                          
Austerman answered in the affirmative.                                                                                          
                                                                                                                                
Vice-Chair Neuman WITHDREW his OBJECTION. There being NO                                                                        
further OBJECTION, Amendment 10 was ADOPTED.                                                                                    
                                                                                                                                
Representative Thompson MOVED to ADOPT Amendment 11:                                                                            
                                                                                                                                
     OFFERED BY:    Reps. Thompson and Austerman                                                                                
     DEPARTMENT:    Military     and    Veterans'    Affairs                                                                    
     APPROPRIATION: Alaska Aerospace Corporation                                                                                
     ALLOCATION:    Alaska Aerospace Corporation                                                                                
     ADD:           $2,918,700 General Funds 1004                                                                               
     LANGUAGE:      AMEND Sec. 17, DEPARTMENT OF MILITARY                                                                       
     AND VETERANS'  AFFAIRS, by adding  a new  subsection to                                                                    
     read:                                                                                                                      
                                                                                                                                
     (b)  If  the  Alaska  Aerospace  Corporation  does  not                                                                    
     secure a multi-year  commercial launch service contract                                                                    
     for the  Kodiak Launch  Complex on  or before  June 30,                                                                    
     2013, the  appropriation from the  general fund  to the                                                                    
     Alaska   Aerospace    Corporation,   Alaska   Aerospace                                                                    
     Corporation allocation in  sec. 1 of this  Act shall be                                                                    
     reduced by $3,000,000.                                                                                                     
                                                                                                                                
     INSERT a new bill section to read:                                                                                         
          Sec. --. CONTINGENT EFFECT. The appropriation                                                                         
     made in  sec. 17(b)  of this Act  is contingent  as set                                                                    
     out in sec. 17(b) of this Act.                                                                                             
                                                                                                                                
     EXPLANATION:                                                                                                               
     In  FY13  the  State  of  Alaska  provided  a  one-time                                                                    
     increment  of  $8.0  million GF.  It  was  the  State's                                                                    
     understanding that  Alaska Aerospace  Corporation [AAC]                                                                    
     would  not  become wholly  dependent  on  the State  to                                                                    
     provide  funding for  operations  and maintenance.  The                                                                    
     State  understands  that  AAC has  potential  contracts                                                                    
     that  will  be fulfilled  in  FYI4.  To that  end,  the                                                                    
     legislature  will provide  funding  in FY14  to AAC  to                                                                    
     allow AAC to secure a contract  by June 30, 2013. If no                                                                    
     multi-year  commercial   launch  service   contract  is                                                                    
     secured by that date, funding will be reduced by $3.0                                                                      
     million.                                                                                                                   
                                                                                                                                
Representative Kawasaki OBJECTED for discussion.                                                                                
                                                                                                                                
Representative   Thompson   explained   Amendment   11.   He                                                                    
communicated  that  the  Alaska Aerospace  Corporation  fell                                                                    
under the  Department of Military and  Veterans Affairs. The                                                                    
corporation  had  requested  $8 million  for  its  operating                                                                    
budget,  but   the  finance  subcommittee   had  recommended                                                                    
reducing the  number to  $5 million.  He explained  that the                                                                    
corporation  felt  that  the   reduction  would  hamper  its                                                                    
attempt to secure a contract  for launch in August 2014. The                                                                    
amendment would restore funding  to the corporation with the                                                                    
caveat that  failure to secure a  multi-year launch contract                                                                    
by  June 30,  2013  would  mean a  $3  million reduction  in                                                                    
funds.                                                                                                                          
                                                                                                                                
3:01:06 PM                                                                                                                    
                                                                                                                                
Representative   Kawasaki   agreed  with   the   amendment's                                                                    
underlying concept.  He asked whether  multi-year commercial                                                                    
launch  contracts were  typical. He  pointed to  backup data                                                                    
that seemed to  indicate that contracts had  duration of one                                                                    
year.  He  wondered  whether  the  amendment  would  be  too                                                                    
stringent.                                                                                                                      
                                                                                                                                
Representative  Thompson  replied  that  the  amendment  was                                                                    
intended to  be stringent.  He relayed that  the corporation                                                                    
had conveyed  that it  expected there to  be one  launch per                                                                    
year under the  potential contract. The goal was  to let the                                                                    
corporation  know that  the  legislature  was serious  about                                                                    
wanting  to see  production and  the development  of a  good                                                                    
business  plan.   He  reiterated   that  the   language  was                                                                    
restrictive; he had not spoken  to the corporation about the                                                                    
amendment.  He believed  the program  was  great, which  had                                                                    
been  implemented to  diversify the  state's economy  and to                                                                    
involve  the universities  in rocket  technology. There  had                                                                    
not been any  production for a couple of years  and he hoped                                                                    
to see that change.                                                                                                             
                                                                                                                                
3:02:34 PM                                                                                                                    
                                                                                                                                
Co-Chair  Stoltze  pointed  out  that the  amendment  was  a                                                                    
compromise.  He believed  the  Alaska Aerospace  Corporation                                                                    
would get  the message that  a business plan was  needed and                                                                    
that  it  was not  an  "unending  cash cow"  of  legislative                                                                    
appropriations.                                                                                                                 
                                                                                                                                
Co-Chair  Austerman informed  the committee  that two  years                                                                    
earlier the corporation had come  forward with a $40 million                                                                    
request for sustaining funds ($10  million per year for four                                                                    
years) to allow  the corporation to redo  its business plan.                                                                    
The result  had been  a $4  million appropriation  the first                                                                    
year,  $8 million  the second  year, and  $8 million  in the                                                                    
current year. He  shared that the new  executive officer had                                                                    
communicated that  the fourth year request  would be reduced                                                                    
to $6 million. He stated  that the $32 million total request                                                                    
was  for sustaining  funds to  keep the  corporation's doors                                                                    
open. He agreed that the  legislature should not continue to                                                                    
fund  something that  would  not work  and  stated that  the                                                                    
amendment would put the corporation  in a position to ensure                                                                    
that it would work.                                                                                                             
                                                                                                                                
3:03:58 PM                                                                                                                    
                                                                                                                                
Representative Kawasaki liked the  language in Amendment 11,                                                                    
but wanted to make a change.  He MOVED to AMEND Amendment 11                                                                    
by increasing  the $3  million reduction  to $5  million. He                                                                    
stated the language would read:                                                                                                 
                                                                                                                                
     ...the   general   fund   to   the   Alaska   Aerospace                                                                    
     Corporation, Alaska Aerospace Corporation allocation                                                                       
     in sec. 1 of this Act shall be reduced by $5,000,000.                                                                      
                                                                                                                                
Representative Wilson OBJECTED.                                                                                                 
                                                                                                                                
Representative  Kawasaki agreed  that  the Alaska  Aerospace                                                                    
Corporation  should   be  on  its  way   to  becoming  self-                                                                    
sufficient. He stated that the  amendment would put the ball                                                                    
squarely in  its court. He  referred to  budget subcommittee                                                                    
discussions related to an amount  the corporation would need                                                                    
to operate.  He believed  the corporation should  be heading                                                                    
in the direction  of looking at transferring  assets over to                                                                    
a  private  developer or  a  private  contractor that  could                                                                    
operate  the asset.  He believed  the $3  million the  state                                                                    
intended  to  provide  the  corporation  would  provide  the                                                                    
corporation  with the  latitude to  explore the  options. He                                                                    
agreed with  the amendment but  opined that it needed  to be                                                                    
more specific.                                                                                                                  
                                                                                                                                
Co-Chair  Austerman voiced  objection to  amending Amendment                                                                    
11. He  explained that  Amendment 11  would take  $3 million                                                                    
from the  corporation if it  failed to secure a  contract by                                                                    
July 1,  2013; whereas  the proposed amendment  to Amendment                                                                    
11 would take $5 million.  He believed that for an operation                                                                    
of the corporation's  size it would take some  time to close                                                                    
down. He stated that reducing  funding by $5 million may not                                                                    
allow the corporation to close down in an appropriate way.                                                                      
                                                                                                                                
3:06:53 PM                                                                                                                    
                                                                                                                                
Representative Thompson agreed and  objected to the proposed                                                                    
amendment to Amendment 11. He  furthered that a reduction of                                                                    
$3 million  would leave the  corporation with $5  million to                                                                    
carry  it through  the end  of January  2014. He  provided a                                                                    
scenario  in  which  the  corporation   came  up  with  four                                                                    
launches  for   the  following   year;  the   funding  under                                                                    
Amendment  11 gave  the opportunity  for the  legislature to                                                                    
provide  a supplemental  appropriation  in  January 2014  to                                                                    
allow  the  corporation  to continue.  He  stated  that  the                                                                    
amendment  gave  the  corporation the  opportunity  to  work                                                                    
towards  something; if  nothing came  to fruition  the money                                                                    
would  enable  it to  sell  or  lease  out the  complex.  He                                                                    
stressed that reducing  the budget by $5  million would only                                                                    
give  the corporation  funds for  approximately 3  months of                                                                    
operation.                                                                                                                      
                                                                                                                                
Representative Gara  agreed with the amendment  to Amendment                                                                    
11.  He pointed  to  frustration with  the Alaska  Aerospace                                                                    
Corporation. He stated  that there had not been  a launch in                                                                    
the past  two years  and that  there was  no contract  for a                                                                    
launch  in the  future.  He  had heard  a  promise from  the                                                                    
corporation  that  it  was  on   the  verge  of  securing  a                                                                    
contract;  however,  the  possibility  of  a  contract  kept                                                                    
getting pushed further  out into the future.  He agreed that                                                                    
the  corporation should  be  given until  June  30, 2013  to                                                                    
determine  a plan,  but  he  did not  believe  it needed  $5                                                                    
million if  no launches  had been secured  at that  time. He                                                                    
believed if  no launches had  been secured it would  be time                                                                    
for the corporation to find  an operator to run the facility                                                                    
at no cost to the state  or to consider selling. He believed                                                                    
$3  million   would  allow   the  corporation   to  continue                                                                    
negotiating into the following  year for rocket launches. He                                                                    
opined that  leaving the corporation  with $5  million would                                                                    
let it run  an empty facility. He believed  $3 million would                                                                    
keep  the  facility's  integrity  intact and  to  allow  the                                                                    
corporation to determine a way to sell it.                                                                                      
                                                                                                                                
3:09:38 PM                                                                                                                    
                                                                                                                                
Vice-Chair Neuman  spoke against the amendment  to Amendment                                                                    
11. He pointed to a business  plan that had been laid out by                                                                    
the  Alaska  Aerospace  Corporation.   He  stated  that  the                                                                    
corporation needed a certain amount  of structure within the                                                                    
facility itself; the  contracts would not be  obtained if it                                                                    
could not  demonstrate the structure. He  furthered that the                                                                    
funding  would   provide  the  corporation  with   one  more                                                                    
opportunity  to  secure  contracts  by  June  30,  2013.  He                                                                    
stressed  that if  the corporation  did  not have  resources                                                                    
available to  move forward on contracts  the legislature was                                                                    
essentially "cutting them off at the feet."                                                                                     
                                                                                                                                
Representative   Kawasaki  provided   a  wrap   up  on   the                                                                    
amendment.  He   referred  to   discussion  in   the  budget                                                                    
subcommittee  related  to  a   cold  operation  option.  The                                                                    
subcommittee  had asked  the corporation  why  it needed  42                                                                    
staff  when there  had  been  no launches  in  the past  two                                                                    
years; the  corporation responded  that staff was  needed in                                                                    
order  to work  to get  a launch  done. He  referred to  the                                                                    
possibility that  a contract could  be signed in  August for                                                                    
four future  launches. He  remarked that  there had  been 18                                                                    
lifts in 12 years.  He believed the corporation's projection                                                                    
of  three launches  in  2015 were  speculative  at best.  He                                                                    
opined that $3  million was an adequate amount  of money for                                                                    
a cold operation (where engineers would not be needed).                                                                         
                                                                                                                                
Co-Chair  Austerman shared  that he  lived where  the launch                                                                    
facility was located. He detailed  that two weeks earlier 25                                                                    
to 35  people from  the Department  of Military  Defense had                                                                    
visited the  facility, in preparation for  a possible launch                                                                    
contract for  the fall  of 2014.  He noted  it was  the only                                                                    
contract  the  corporation  was  considering  currently.  He                                                                    
stated that  the current staff  was needed in order  to meet                                                                    
with  prospective clients.  He  agreed  with other  comments                                                                    
about the length  of time the state should  continue to fund                                                                    
the  corporation. He  supported the  original amendment  and                                                                    
believed it worked to put  the corporation on notice to come                                                                    
up with  a viable business plan  or figure out how  to close                                                                    
down the operation.                                                                                                             
                                                                                                                                
A roll call vote was taken  on the motion to amend Amendment                                                                    
11.                                                                                                                             
                                                                                                                                
IN FAVOR: Gara, Kawasaki                                                                                                        
OPPOSED: Thompson, Wilson,  Costello, Edgmon, Holmes, Munoz,                                                                    
Neuman, Stoltze, Austerman                                                                                                      
                                                                                                                                
The MOTION FAILED (2/9).                                                                                                        
                                                                                                                                
There being NO further OBJECTION Amendment 11 was ADOPTED.                                                                      
                                                                                                                                
3:14:21 PM                                                                                                                    
                                                                                                                                
Representative Costello MOVED to ADOPT Amendment 12:                                                                            
                                                                                                                                
     OFFERED BY:    Representatives Costello and Austerman                                                                      
     DEPARTMENT:    Natural Resources                                                                                           
     APPROPRIATION: Oil and Gas                                                                                                 
     ALLOCATION:    Oil and Gas                                                                                                 
     LANGUAGE:      Page 62, following line 2:                                                                                  
                                                                                                                                
     Insert a new subsection to read:                                                                                           
     "(e) The  amount necessary, not to  exceed $600,000, is                                                                    
     appropriated from  the general  fund to  the Department                                                                    
     of Natural Resources, Division of  Oil and Gas, for the                                                                    
     purpose  of  retaining  expert contractors  to  examine                                                                    
     commercial  terms for  service of  the North  Slope gas                                                                    
     commercialization  project and  ensure compliance  with                                                                    
     the terms of the  Alaska Gasline Inducement Act license                                                                    
     under AS 43.90.100 -43.90.260."                                                                                            
                                                                                                                                
Representatives Kawasaki OBJECTED for discussion.                                                                               
                                                                                                                                
Representative  Costello explained  that  the Department  of                                                                    
Natural Resources  (DNR) had requested a  one-time increment                                                                    
of  $600,000 to  retain  expert contractors  to examine  the                                                                    
commercial terms  for North Slope gas  commercialization and                                                                    
to ensure compliance with the  Alaska Gasline Inducement Act                                                                    
(AGIA).  The  subcommittee   had  recommended  changing  the                                                                    
increment from a one-time occurrence  to including it in the                                                                    
language section of the budget;  the change would enable the                                                                    
department to  use up to  $600,000, but DNR would  no longer                                                                    
be able to spend the money in other areas.                                                                                      
                                                                                                                                
3:15:22 PM                                                                                                                    
                                                                                                                                
Vice-Chair Neuman  spoke in opposition to  the amendment. He                                                                    
reiterated  the amendment's  purpose. He  believed that  the                                                                    
governor had designated $25 million  in the operating budget                                                                    
for  AGIA and  the  Alaska  Gasline Development  Corporation                                                                    
(AGDC). He  stated that the  items under the  amendment were                                                                    
already part of  the entities' job. He  furthered that under                                                                    
the AGIA terms, if TransCanada  or ExxonMobil were doing the                                                                    
work,  the state  was  currently responsible  for  up to  90                                                                    
percent  of the  costs. He  guessed that  the full  $600,000                                                                    
would be spent if allocated.  He stressed that the state was                                                                    
running in a deficit mode.  He believed reductions needed to                                                                    
be made where they were possible.                                                                                               
                                                                                                                                
Representative  Kawasaki asked  whether the  amendment would                                                                    
restrict the Division  of Oil and Gas by  specifying that it                                                                    
would  be   required  to   retain  expert   consultants  for                                                                    
commercial terms.  He noted  that current  language provided                                                                    
the entity with more autonomy related to decision making.                                                                       
                                                                                                                                
3:17:44 PM                                                                                                                    
                                                                                                                                
Representative  Costello replied  that in  the past  DNR had                                                                    
used  the  one-time  increment   for  the  specific  purpose                                                                    
outlined in  Amendment 12.  She furthered  that it  had been                                                                    
the budget  subcommittee's desire  that the  allocation move                                                                    
into the language section for  appropriation on an as-needed                                                                    
basis.   She  noted   that  the   amendment  also   included                                                                    
sideboards around the budget item.                                                                                              
                                                                                                                                
Vice-Chair Neuman MAINTAINED his OBJECTION.                                                                                     
                                                                                                                                
A roll call vote was taken  on the motion to adopt Amendment                                                                    
12.                                                                                                                             
                                                                                                                                
IN FAVOR: Wilson, Costello, Edgmon,  Gara, Kawasaki, Holmes,                                                                    
Munoz, Thompson, Austerman, Stoltze                                                                                             
OPPOSED: Neuman                                                                                                                 
                                                                                                                                
The MOTION PASSED (10/1). There  being NO further OBJECTION,                                                                    
Amendment 12 was ADOPTED.                                                                                                       
                                                                                                                                
3:19:15 PM                                                                                                                    
                                                                                                                                
Representative Costello MOVED to ADOPT Amendment 13:                                                                            
                                                                                                                                
     OFFERED BY:    Representatives Costello and Austerman                                                                      
                                                                                                                                
     DEPARTMENT:    Natural Resources                                                                                           
     APPROPRIATION: Oil and Gas                                                                                                 
     ALLOCATION:    Oil and Gas                                                                                                 
     LANGUAGE:      Page 62, following line 2:                                                                                  
                                                                                                                                
     Insert a new subsection to read:                                                                                           
     "(e) The amount necessary,  not to exceed $500,000, for                                                                    
     costs  related   to  royalty  oil  and   gas  valuation                                                                    
     matters, including audit  disputes, reopener provisions                                                                    
     under   royalty  settlement   agreements,  establishing                                                                    
     minimum  royalty  values,  disposition  of  royalty  in                                                                    
     kind,  and similar  matters  is  appropriated from  the                                                                    
     general fund  to the  Department of  Natural Resources,                                                                    
     Division of  Oil and  Gas, for  the fiscal  year ending                                                                    
     June 30, 2014."                                                                                                            
                                                                                                                                
Representative Kawasaki OBJECTED.                                                                                               
                                                                                                                                
Representative  Costello  explained   that  the  DNR  budget                                                                    
subcommittee recommended  moving $500,000 from the  base for                                                                    
royalty arbitration  in which DNR  would argue on  behalf of                                                                    
the  state  against  oil companies  to  obtain  hundreds  of                                                                    
millions  of dollars  that the  state believed  it was  owed                                                                    
based on  royalty valuation. She  furthered that  the entire                                                                    
request equaled  $1.3 million; $500,000 would  come from the                                                                    
capital budget and $800,000 had  come as an operating budget                                                                    
request. The  amendment would mean  a reduction  of $300,000                                                                    
to DNR.  She communicated that  the oil companies  would not                                                                    
know the  amount of funds used  but they would know  that it                                                                    
would not  exceed $500,000. She  believed that the  work was                                                                    
significant.                                                                                                                    
                                                                                                                                
Representative  Gara  agreed  with  the  importance  of  the                                                                    
ability  to   litigate  the   cases  against   high  powered                                                                    
attorneys. He  pointed to the original  $1.3 million request                                                                    
and  asked  if   the  $500,000  was  an   increment  to  the                                                                    
subcommittee budget.                                                                                                            
                                                                                                                                
Representative Costello replied that  the increment had been                                                                    
in the  base and the  budget subcommittee had moved  it into                                                                    
the  language section.  She elaborated  that the  additional                                                                    
$500,000 request was included in the capital budget.                                                                            
                                                                                                                                
3:21:41 PM                                                                                                                    
                                                                                                                                
Representative Gara  asked if the operating  budget cost was                                                                    
$800,000 and the capital budget request was $500,000.                                                                           
                                                                                                                                
Representative  Costello  replied  that  $500,000  would  be                                                                    
included  in the  operating budget  language section  if the                                                                    
proposed amendment passed and  $500,000 would be included in                                                                    
the capital budget if approved.                                                                                                 
                                                                                                                                
Representative Gara asked for  verification that without the                                                                    
amendment there would  be zero funds allocated  to the item.                                                                    
Representative Costello replied in the affirmative.                                                                             
                                                                                                                                
3:22:17 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Neuman  asked  for clarification  on  the  total                                                                    
proposed  expenditure. He  wondered if  the amendment  added                                                                    
$500,000 to the amount the agency would receive.                                                                                
                                                                                                                                
Representative Costello answered  that without the amendment                                                                    
the royalty arbitration work would not receive any funding.                                                                     
                                                                                                                                
Vice-Chair Neuman  pointed to a  capital budget  request for                                                                    
funding  of a  portion of  the increment.  He surmised  that                                                                    
without the amendment the division  would still receive some                                                                    
funding.                                                                                                                        
                                                                                                                                
Co-Chair  Austerman  explained  that without  the  amendment                                                                    
there  would  be zero  operating  funds  designated for  the                                                                    
item. The  capital budget could contain  partial funding for                                                                    
the item.                                                                                                                       
                                                                                                                                
Representative Kawasaki WITHDREW  his OBJECTION. There being                                                                    
NO further OBJECTION Amendment 13 was ADOPTED.                                                                                  
                                                                                                                                
3:23:58 PM                                                                                                                    
                                                                                                                                
Representative Munoz MOVED to ADOPT Amendment 14:                                                                               
                                                                                                                                
     OFFERED BY: Reps. Munoz and Austerman                                                                                      
                                                                                                                                
     DEPARTMENT:    University of Alaska                                                                                        
     APPROPRIATION: University of Alaska                                                                                        
     ALLOCATION:    Budget       Reductions/Additions      -                                                                    
     Systemwide                                                                                                                 
     DELETE:        $36,000,000    University   of    Alaska                                                                    
     Restricted Receipts (1048)                                                                                                 
     EXPLANATION:                                                                                                               
     This  amendment would  reduce unrealized  University of                                                                    
     Alaska Restricted Receipts,  Fund Code 1048 (Designated                                                                    
     General Funds), by $36,000,000 to  an amount that comes                                                                    
     closer to reflecting how much  the University of Alaska                                                                    
     raises in tuition, fees, and other sources.                                                                                
                                                                                                                                
     Previous University  budgets have  included significant                                                                    
     receipt  authority that  is unrealizable,  according to                                                                    
     discussions  with University  officials and  members of                                                                    
     the   House  Finance   University   of  Alaska   Budget                                                                    
     Subcommittee.   This  over-authorization   for  "hollow                                                                    
     receipts"  creates the  appearance that  the University                                                                    
     has more funding than what it can generate.                                                                                
                                                                                                                                
     For  example,  in  Fiscal Year  2012,  the  legislature                                                                    
     authorized   nearly   $314.1  million   in   University                                                                    
     receipts.  The   University  ended  that   fiscal  year                                                                    
     generating  almost  $272.4  million  -a  difference  of                                                                    
     roughly $41.7 million.                                                                                                     
                                                                                                                                
     This $36,000,000  amendment neither reduces  revenue to                                                                    
     the  University nor  affects  spending  in Fiscal  Year                                                                    
     2014.  It is  a  technical adjustment  to provide  more                                                                    
     accurate  receipt   information  for   this  Designated                                                                    
     General Fund source.                                                                                                       
                                                                                                                                
Representative Kawasaki OBJECTED.                                                                                               
                                                                                                                                
Representative  Munoz  explained  that  Amendment  14  would                                                                    
remove  $36 million  in hollow  receipt  authority [for  the                                                                    
University  of  Alaska].  The  subcommittee  had  discovered                                                                    
hollow   receipt   authorities   embedded   throughout   the                                                                    
university budget, which made it  difficult to know the true                                                                    
line  item expenditures  in different  areas of  the budget.                                                                    
The  amendment  would  retain the  university's  ability  to                                                                    
raise federal funds; there was  approximately $10 million in                                                                    
federal  receipt authority.  She  furthered  that there  was                                                                    
close  to $10  million  in designated  general fund  receipt                                                                    
authority above  the amount  currently collected  in tuition                                                                    
fees  and from  other revenue  sources. She  summarized that                                                                    
the reduction  would provide a  more accurate  reflection of                                                                    
the actual university budget.                                                                                                   
                                                                                                                                
Representative Gara  provided a scenario where  a university                                                                    
professor obtained  private grants totaling $50  million. He                                                                    
wondered if  the amendment would allow  professors to accept                                                                    
the  private   grant  funding  above  the   $36  million  in                                                                    
unrealized receipts.                                                                                                            
                                                                                                                                
Representative Munoz replied in  the affirmative. She stated                                                                    
that  the  university  could  ask  the  Legislative  Finance                                                                    
Division   [Correction:   Legislative   Budget   and   Audit                                                                    
Committee] for  a language amendment  that would  be brought                                                                    
forward in the following legislative session.                                                                                   
                                                                                                                                
Co-Chair   Austerman   corrected   that   the   agency   was                                                                    
Legislative  Budget  and   Audit  Committee.  Representative                                                                    
Munoz agreed.                                                                                                                   
                                                                                                                                
Representative   Gara  asked   for  verification   that  the                                                                    
Legislative Budget and Audit Committee  had the authority to                                                                    
approve the grants during the interim.                                                                                          
                                                                                                                                
3:27:12 PM                                                                                                                    
                                                                                                                                
Representative Munoz replied in the affirmative.                                                                                
                                                                                                                                
Representative Gara remarked that he  would only be upset if                                                                    
the university was  denied use of grant money  it raised. He                                                                    
doubted that the situation would occur.                                                                                         
                                                                                                                                
Co-Chair Austerman commented that  on average the university                                                                    
had  somewhere in  the neighborhood  of $40  million to  $45                                                                    
million annually in unused receipt authority.                                                                                   
                                                                                                                                
Representative Kawasaki WITHDREW  his OBJECTION. There being                                                                    
NO further OBJECTION Amendment 14 was ADOPTED.                                                                                  
                                                                                                                                
Co-Chair Austerman MOVED to ADOPT Amendment 15:                                                                                 
                                                                                                                                
     OFFERED BY:    Representatives Austerman and Costello                                                                      
                                                                                                                                
     DEPARTMENT:    University of Alaska                                                                                        
     APPROPRIATION: University of Alaska                                                                                        
     ALLOCATION:    Anchorage Campus                                                                                            
     DELETE:        $250,000 general funds (1004)                                                                               
     EXPLANATION:                                                                                                               
     This amendment deletes the funding  for the second year                                                                    
     of a  two-year project of  the Institute of  Social and                                                                    
     Economic  Research (ISER)  on  Alaska Education  Policy                                                                    
     Research.                                                                                                                  
                                                                                                                                
Co-Chair Stoltze OBJECTED for discussion.                                                                                       
                                                                                                                                
Co-Chair Austerman  addressed Amendment 15. He  referenced a                                                                    
lengthy discussion  from the  prior year  related to  how to                                                                    
handle education  funding throughout the state.  He referred                                                                    
to  an education  task-force that  had  been established.  A                                                                    
bill addressing  the issue  had not  passed, but  the Senate                                                                    
had recommended  putting two  installments of  $250,000 into                                                                    
Institute of  Social and Economic Research  (ISER) on Alaska                                                                    
Education  Policy Research.  He had  recently met  with ISER                                                                    
staff and had learned the  first installment of $250,000 had                                                                    
not  been  spent.  The amendment  would  remove  the  second                                                                    
installment  of $250,000  from the  FY 14  budget, with  the                                                                    
understanding that the  money would be allocated  at a later                                                                    
time  when  ISER  could demonstrate  that  it  was  actively                                                                    
working to understand the education  system across the state                                                                    
and how it should be funded.                                                                                                    
                                                                                                                                
3:29:44 PM                                                                                                                    
                                                                                                                                
Representative Kawasaki  had not spoken directly  with ISER,                                                                    
but  believed  that  the  legislature  needed  to  keep  all                                                                    
agencies  accountable to  money  they received.  He did  not                                                                    
want  to cut  funds if  ISER  had not  fully encumbered  the                                                                    
initial $250,000  because it was  waiting on  the additional                                                                    
funds; if  that was  the case  he surmised  that contingency                                                                    
language may  be more appropriate  that would allow  ISER to                                                                    
show what the legislature expected.                                                                                             
                                                                                                                                
Representative  Gara agreed  with the  amendment as  long as                                                                    
ISER  understood  that it  was  supposed  to use  the  first                                                                    
$250,000 for  a work product  and not solely a  work product                                                                    
plan.  He believed  the entity  could generate  a good  work                                                                    
product for that amount.                                                                                                        
                                                                                                                                
Co-Chair Austerman  replied that the budget  amount included                                                                    
a page of instructions for ISER.                                                                                                
                                                                                                                                
Representative  Gara  believed  the legislature  would  also                                                                    
work to determine an education funding plan.                                                                                    
                                                                                                                                
There being NO further OBJECTION, Amendment 15 was ADOPTED.                                                                     
                                                                                                                                
3:31:29 PM                                                                                                                    
                                                                                                                                
Representative Munoz WITHDREW Amendment 16.                                                                                     
                                                                                                                                
Representative Edgmon MOVED to ADOPT Amendment 17:                                                                              
                                                                                                                                
     OFFERED BY:    Rep. Edgmon                                                                                                 
                                                                                                                                
     DEPARTMENT:    University of Alaska                                                                                        
     APPROPRIATION: University of Alaska                                                                                        
     ALLOCATION:    Bristol Bay Campus                                                                                          
     ADD:           $55,000 UGF (lO04) $55,000 Univ Rcpt                                                                        
     (1048)                                                                                                                     
     EXPLANATION:   There  is presently  a waiting  list for                                                                    
     the  Bristol  Bay  Campus   Nursing  program  and  this                                                                    
     request  will help  fund  the  nursing faculty  member.                                                                    
     Producing  more   nursing  graduates  will   help  meet                                                                    
     employer  needs  and   fill  the  increasing  statewide                                                                    
     demand  for  nurses,   specifically  nurses  for  rural                                                                    
     Alaska.                                                                                                                    
                                                                                                                                
Representative Kawasaki OBJECTED for discussion.                                                                                
                                                                                                                                
Representative  Edgmon explained  that  the amendment  would                                                                    
provide the Bristol Bay Campus  with a faculty position that                                                                    
would  help  it to  continue  a  local nursing  program.  He                                                                    
pointed  to the  program's  success and  noted  that it  had                                                                    
graduated  its  first  class. Graduates  were  eligible  for                                                                    
employment  opportunities  at   the  regional  hospital.  He                                                                    
furthered that  the program had  a waiting list.  The campus                                                                    
had identified a number of candidates for the position.                                                                         
                                                                                                                                
Representative Kawasaki WITHDREW  his OBJECTION. There being                                                                    
NO further OBJECTION, Amendment 17 was ADOPTED.                                                                                 
                                                                                                                                
3:33:21 PM                                                                                                                    
                                                                                                                                
Representative Munoz MOVED to ADOPT Amendment 18:                                                                               
                                                                                                                                
     OFFERED BY: Rep. Munoz                                                                                                     
                                                                                                                                
     LANGUAGE:  AMEND  Sec.  21, UNIVERSITY  OF  ALASKA,  by                                                                    
     adding a new subsection to read:                                                                                           
                                                                                                                                
          (--) The sum of $90,000 is appropriated from the                                                                      
     general fund and $27,800 in  receipts of the University                                                                    
     of Alaska  as described  in AS  37.05. 146(b)(2)  for a                                                                    
     total   of$117,800  to   the  Juneau   Campus  of   the                                                                    
     University   of  Alaska   for  the   Center  for   Mine                                                                    
     Training."                                                                                                                 
                                                                                                                                
    This section has an effective date of July 1, 2013.                                                                         
                                                                                                                                
     EXPLANATION:                                                                                                               
     The University  of Alaska Center  for Mine  Training at                                                                    
     the Juneau Campus was created  in June 2011 after Hecla                                                                    
     Greens  Creek donated  $300,000 to  the program.  It is                                                                    
     becoming  an  internationally   recognized  center  for                                                                    
     training  miners with  state-of-the-art training  aids,                                                                    
     faculty, and  facilities. It works in  cooperation with                                                                    
     the University of Alaska  Mining and Petroleum Training                                                                    
     Service   to    provide   Mine   Safety    and   Health                                                                    
     Administration  training,  such as  entry-level  mining                                                                    
     classes,  that  lead  to  good-paying  jobs  in  Alaska                                                                    
     mines.                                                                                                                     
                                                                                                                                
     The  $117,800  request  is for  the  center's  training                                                                    
     director who also serves as  an assistant professor who                                                                    
     teaches  courses supported  by the  Hecla Greens  Creek                                                                    
     donation  as  part of  the  Hecla  Greens Creek  Mining                                                                    
     Training  Career  Pathway.  The  director  teaches  two                                                                    
     statewide introductory courses that  serve as the first                                                                    
     steps in  a pathway that  leads to a career  in mining.                                                                    
     Students then  enter a  UA Mine  Mechanics Occupational                                                                    
     Endorsement and Power  Technology Associates of Applied                                                                    
     Sciences  certificate  programs  with  an  emphasis  in                                                                    
     diesel mechanics  all funded by the  Hecla Greens Creek                                                                    
     donation.  The director  also operates  amine simulator                                                                    
     and represents  the UA  mine training  program locally,                                                                    
     regionally,   across   the   state,   nationally,   and                                                                    
     internationally.                                                                                                           
                                                                                                                                
     This  program  creates  jobs in  Southeast  Alaska.  By                                                                    
     putting this appropriation in  the language section, it                                                                    
     assures that this program will be funded.                                                                                  
                                                                                                                                
Vice-Chair Neuman OBJECTED.                                                                                                     
                                                                                                                                
Representative  Munoz  explained  that the  amendment  would                                                                    
provide funding  for the  mining training  director position                                                                    
at  the University  of  Alaska  Southeast. She  communicated                                                                    
that  the program  had initially  been funded  with a  grant                                                                    
from  the Hecla  Greens  Creek Mining  Company. A  statewide                                                                    
course was  also offered  to high  school students  for dual                                                                    
credit. She shared  that the program had  been successful in                                                                    
training  and preparing  individuals for  jobs at  Hecla and                                                                    
Kensington  Mine.   She  expounded   that  other   mines  in                                                                    
Southeast  Alaska  were  training  individuals  through  the                                                                    
program  in  anticipation  of opening  on  Prince  of  Wales                                                                    
Island.                                                                                                                         
                                                                                                                                
Vice-Chair  Neuman believed  that the  request had  been put                                                                    
forward by  the university's  Board of  Regents and  had not                                                                    
been  in  the governor's  proposed  budget.  He stated  that                                                                    
there was  already legislation that increased  the funds and                                                                    
asked   for   matching   grants   from   private   industry;                                                                    
transferrable  credits  could   be  obtained  for  corporate                                                                    
taxes. He stated  that there was a  partnership with private                                                                    
industry that would allow mines  to partner with schools for                                                                    
training.  He wanted  to see  increased private  partnership                                                                    
with  the  education  industry where  transferrable  credits                                                                    
could  be received  for various  businesses; he  stated that                                                                    
fish, mining, and other taxes  could be used. He believed in                                                                    
vocational  education  training   and  understood  that  the                                                                    
courses were  needed. He remarked  that workers  were coming                                                                    
in  from out  of state  for mining  jobs. He  reiterated his                                                                    
belief  that there  were other  ways to  offer the  training                                                                    
such  as  public-private  partnerships. He  pointed  to  the                                                                    
current  budget   deficit.  He  mentioned   his  legislation                                                                    
related  to  technical  vocational education  program  funds                                                                    
that  would  take funds  from  employees'  paychecks and  go                                                                    
towards  vocational education  in Southeast;  the university                                                                    
would receive 5 percent  of funds that totaled approximately                                                                    
$10.7 million.                                                                                                                  
                                                                                                                                
3:36:46 PM                                                                                                                    
                                                                                                                                
Vice-Chair Neuman  restated his  objection to  Amendment 18.                                                                    
He believed the  programs were necessary, but  the state was                                                                    
running  in a  deficit  mode.  He noted  that  there were  a                                                                    
significant number  of other training programs  in Fairbanks                                                                    
and in other  areas; he would like to fund  them all, but he                                                                    
did not believe the state could afford it.                                                                                      
                                                                                                                                
Representative Gara  supported the amendment, but  wanted it                                                                    
to recognize the  need of mining programs  across the state.                                                                    
He  stated   that  the  Board   of  Regents   had  requested                                                                    
bolstering the  mining program at  the University  of Alaska                                                                    
campuses  in  Fairbanks  (UAF), Anchorage  (UAA),  Southeast                                                                    
(UAS), and in one other  location. He believed that with the                                                                    
exception of  a couple  of proposals  the mining  history in                                                                    
the state had been  responsible. The industry provided well-                                                                    
paying jobs, but positions were  frequently filled by out of                                                                    
state workers. He stressed that  the issue was not regional;                                                                    
there were  mines throughout Alaska and  students across the                                                                    
state could benefit from the  jobs. He wanted to see funding                                                                    
for the other campuses as well.                                                                                                 
                                                                                                                                
3:38:58 PM                                                                                                                    
                                                                                                                                
Representative  Wilson  spoke  against  the  amendment.  She                                                                    
recalled  a   similar  discussion  related  to   the  Alaska                                                                    
Vocational  Technical Center  (AVTEC)  and private  funding.                                                                    
She believed  the university  had a  block grant  that would                                                                    
allow it to fund  the program. She mentioned micromanagement                                                                    
and UAF programs needing instructors.                                                                                           
                                                                                                                                
Representative   Kawasaki  supported   the  increment,   but                                                                    
wondered if it  would be more appropriate to  leave it under                                                                    
the Consolidated  Alaskan Mining Initiative (CAMI)  to allow                                                                    
the  Board  of   Regents  to  determine  the   best  way  to                                                                    
appropriate the  funds. He  communicated that  the amendment                                                                    
went to the  Board of Regents' original FY  14 CAMI request.                                                                    
The request was over  $702,000 and included certification in                                                                    
Fairbanks  and  was  associated with  the  Anchorage  mining                                                                    
industry and a mining initiative in Fairbanks.                                                                                  
                                                                                                                                
3:40:56 PM                                                                                                                    
                                                                                                                                
Representative Munoz spoke in support  of Amendment 18 and a                                                                    
terrific program.  She had visited  classrooms and  had seen                                                                    
youths  with  limited  opportunities  complete  the  program                                                                    
successfully  and  transition  into high  paying  jobs.  She                                                                    
stated that without the money  the program would probably go                                                                    
away.                                                                                                                           
                                                                                                                                
A roll call vote was taken  on the motion to adopt Amendment                                                                    
18.                                                                                                                             
                                                                                                                                
IN FAVOR:  Costello, Edgmon, Gara, Kawasaki,  Holmes, Munoz,                                                                    
Thompson, Austerman, Stoltze                                                                                                    
OPPOSED: Neuman, Wilson                                                                                                         
                                                                                                                                
The MOTION  PASSED (9/2). There  being NO  further OBJECTION                                                                    
Amendment 18 was ADOPTED.                                                                                                       
                                                                                                                                
3:42:29 PM                                                                                                                    
                                                                                                                                
Representative Munoz MOVED to ADOPT Amendment 19:                                                                               
                                                                                                                                
     OFFERED BY: Reps. Munoz, Thompson, Edgmon and                                                                              
     Austerman                                                                                                                  
                                                                                                                                
     DEPARTMENT:   University   of   Alaska   APPROPRIATION:                                                                    
     University of Alaska                                                                                                       
     ADD INTENT:                                                                                                                
     It  is   the  intent   of  the  legislature   that  the                                                                    
     University of  Alaska use  funding appropriated  by the                                                                    
     legislature  to  pay  operating costs  associated  with                                                                    
     opening new facilities.                                                                                                    
                                                                                                                                
Co-Chair Stoltze OBJECTED for discussion.                                                                                       
                                                                                                                                
Representative Munoz  explained that Amendment 19  would add                                                                    
intent  language directing  the  university  to use  funding                                                                    
appropriated by  the legislature to pay  the operating costs                                                                    
associated with opening  new university facilities including                                                                    
a  life  sciences building  in  Fairbanks  and a  number  of                                                                    
facilities on the Kenai Peninsula.                                                                                              
                                                                                                                                
Representative Edgmon spoke in  support of the amendment; he                                                                    
believed it  represented a compromise.  He relayed  that the                                                                    
amendment  asked  the university  to  reach  within its  own                                                                    
funding to  pay for a  number of buildings that  would begin                                                                    
servicing  students.  He mentioned  a  new  facility on  the                                                                    
Bristol Bay campus. He hoped  the intent language would help                                                                    
the  university  make the  right  choices  when it  came  to                                                                    
getting the buildings and programs up and running.                                                                              
                                                                                                                                
3:44:00 PM                                                                                                                    
                                                                                                                                
Representative Gara spoke to the  operation of buildings and                                                                    
noted  that   the  legislature  had   funded  a   number  of                                                                    
university  buildings  statewide;  the science  facility  in                                                                    
Fairbanks  would  cost  approximately   $2  million  to  get                                                                    
operating.  He was  not aligned  with the  committee on  the                                                                    
amount   of  funding   included  in   the  budget   for  the                                                                    
university. He  stressed that  the money  would come  out of                                                                    
classroom  funding  and  other.  He  stated  that  he  would                                                                    
support  the amendment  because the  university had  to keep                                                                    
its buildings open.                                                                                                             
                                                                                                                                
Vice-Chair Neuman  supported the amendment. He  believed the                                                                    
university's total  operating budget  was slightly  under $1                                                                    
billion and  that its FY 14  request was for an  increase of                                                                    
approximately $18  million; $16 million of  the increase had                                                                    
been approved. He thought the  university's budget was doing                                                                    
well in  comparison to  other many  other budgets.  He noted                                                                    
that the university served a  significant number of specific                                                                    
needs including mining operations.                                                                                              
                                                                                                                                
Representative  Kawasaki  spoke  against  Amendment  19.  He                                                                    
provided an example  of a new dorm facility in  a rural area                                                                    
and surmised that  operating costs would be  high. He stated                                                                    
that the  intent language specified  that if  the university                                                                    
wanted  to   see  a  building  opened   and  needed  capital                                                                    
improvement  money,  it  may need  to  think  about  raising                                                                    
tuition to cover costs. He  believed the issue represented a                                                                    
slippery slope  when the legislature  was stepping  into the                                                                    
Board of Regents territory.                                                                                                     
                                                                                                                                
3:47:23 PM                                                                                                                    
                                                                                                                                
Representative  Thompson supported  Amendment 19  because it                                                                    
would allow the  regents to determine how to  make the funds                                                                    
work in particular areas. He  stated that the intent applied                                                                    
to the  opening of new  buildings that the state  had funded                                                                    
through bonding  or grants. He  pointed to the  $108 million                                                                    
life  sciences  facility  in Fairbanks  as  an  example.  He                                                                    
mentioned   a  new   building  in   Representative  Edgmon's                                                                    
district that  would cost $246,000  to open and  operate. He                                                                    
stressed that the  state could not let a  brand new building                                                                    
sit empty. He added that  perhaps the state should determine                                                                    
how   building  maintenance   would  be   funded  prior   to                                                                    
construction. He relayed that  the amendment would make sure                                                                    
the  regents  understood  that  they  were  responsible  for                                                                    
determining  where  they  would  take  the  funds  from  the                                                                    
university's $946 million budget.                                                                                               
                                                                                                                                
Representative Kawasaki MAINTAINED his OBJECTION.                                                                               
                                                                                                                                
A roll call vote was taken  on the motion to adopt Amendment                                                                    
19.                                                                                                                             
                                                                                                                                
IN FAVOR: Edgmon,  Gara,  Holmes, Munoz,  Neuman,  Thompson,                                                                    
Wilson, Costello, Stoltze, Austerman                                                                                            
OPPOSED: Kawasaki                                                                                                               
                                                                                                                                
The MOTION PASSED (10/1). There  being NO further OBJECTION,                                                                    
Amendment 19 was ADOPTED.                                                                                                       
                                                                                                                                
Representative Wilson MOVED to ADOPT Amendment 20:                                                                              
                                                                                                                                
     OFFERED BY: Reps. Wilson and Thompson                                                                                      
                                                                                                                                
     LANGUAGE:                                                                                                                  
     AMEND Sec. 25, FUND  CAPITALIZATION, by inserting a new                                                                    
     subsection after subsection (g) to read:                                                                                   
                                                                                                                                
     (h) The  sum of  $125,000,000 is appropriated  from the                                                                    
     general fund  to the Alaska Industrial  Development and                                                                    
     Export  Authority sustainable  energy transmission  and                                                                    
     supply   development    fund   (AS    44.88.660).   The                                                                    
     appropriation made in this  subsection is contingent on                                                                    
     approval by  the Alaska Energy  Authority of a  loan of                                                                    
     no less  than $10,000,000  from the  sustainable energy                                                                    
     transmission   and   supply    development   fund   (AS                                                                    
     44.88.660)  for the  purpose of  advancing  the use  of                                                                    
     North Slope natural gas in the Fairbanks area.                                                                             
                                                                                                                                
     ADD  Contingent Effect  to  sec  35: The  appropriation                                                                    
     made in  sec. 25(h)  of this Act  is contingent  as set                                                                    
     out in sec. 25(h) of this Act."                                                                                            
                                                                                                                                
     EXPLANATION: Capitalizing the  AIDEA sustainable energy                                                                    
     transmission and  supply development fund  will provide                                                                    
     the financing component to HB 74/SB 23.                                                                                    
                                                                                                                                
There being NO OBJECTION, Amendment 20 was ADOPTED.                                                                             
                                                                                                                                
Co-Chair Austerman MOVED to ADOPT Amendment 21:                                                                                 
                                                                                                                                
     OFFERED BY:    Representative Austerman                                                                                    
                                                                                                                                
     DEPARTMENT:    Fund Transfers                                                                                              
     APPROPRIATION: OpSys DGF Transfers (non-add)                                                                               
     ALLOCATION:    Power Project Fund                                                                                          
     LANGUAGE:                                                                                                                  
     Add  the following  subsection  on  page 74,  following                                                                    
     line 11:                                                                                                                   
                                                                                                                                
     "(P) The  sum of  $10,000,000 is appropriated  from the                                                                    
     general fund  to the power project  fund (AS 42.45.010)                                                                    
     for  the  purpose  of  making a  loan  to  the  Cordova                                                                    
     Electric   Cooperative    for   the    Humpback   Creek                                                                    
     hydroelectric project.  The appropriation made  in this                                                                    
     subsection is contingent on the  approval by the Alaska                                                                    
     Energy  Authority of  a loan  not to  exceed $9,123,000                                                                    
     from  the power  project fund  to the  Cordova Electric                                                                    
     Cooperative  for   the  Humpback   Creek  hydroelectric                                                                    
     project."                                                                                                                  
                                                                                                                                
     Page 77, following  line 20: Insert a  new bill section                                                                    
     to read:                                                                                                                   
                                                                                                                                
     "Sec. 35. CONTINGENT EFFECT.  The appropriation made in                                                                    
     sec.  26(p) of  this Act  is contingent  as set  out in                                                                    
     sec. 26(P) of this Act."                                                                                                   
                                                                                                                                
Representative Kawasaki OBJECTED for discussion.                                                                                
                                                                                                                                
Co-Chair  Austerman   explained  that  Amendment   21  would                                                                    
transfer $10  million from the  General Fund into  the Power                                                                    
Project Fund. He detailed that  legislative approval was not                                                                    
required for  loans to utilities  for up to $5  million. The                                                                    
amendment  enabled the  Alaska Energy  Authority to  conduct                                                                    
due  diligence; it  could approve  a  loan that  was not  to                                                                    
exceed $9,123,000.                                                                                                              
                                                                                                                                
Representative Kawasaki WITHDREW  his OBJECTION. There being                                                                    
NO further OBJECTION, Amendment 21 was ADOPTED.                                                                                 
                                                                                                                                
3:50:45 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
4:03:29 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Austerman  pointed to  an amendment to  Amendment 8                                                                    
that had been held for drafting.                                                                                                
                                                                                                                                
Representative Kawasaki MOVED to AMEND Amendment 8:                                                                             
                                                                                                                                
     OFFERED BY:    Representative Kawasaki                                                                                     
                                                                                                                                
     DEPARTMENT:    Department        of       Environmental                                                                    
     Conservation                                                                                                               
     APPROPRIATION: Water                                                                                                       
                                                                                                                                
     Amendment to Amendment #8                                                                                                  
                                                                                                                                
     REMOVE", to the extent feasible," after the word                                                                           
     "Conservation"                                                                                                             
     EXPLANATION:   this   ensures   the   department   does                                                                    
     implement the intent of this amendment                                                                                     
                                                                                                                                
Co-Chair Stoltze and Representative Thompson OBJECTED.                                                                          
                                                                                                                                
Representative   Kawasaki   explained   the   amendment   to                                                                    
Amendment 8.  He discussed that  the legislature  included a                                                                    
significant amount  of intent language  in the budget  on an                                                                    
annual  basis. He  believed that  deleting the  language "to                                                                    
the extent  feasible" forcefully  conveyed exactly  what the                                                                    
legislature  wanted without  any caveats;  it would  require                                                                    
the  department to  make information  regarding cruise  ship                                                                    
geographical areas available to the public on its website.                                                                      
                                                                                                                                
4:05:06 PM                                                                                                                    
                                                                                                                                
Representative  Munoz  shared  that  the  language  "to  the                                                                    
extent feasible" did  not come out of  the subcommittee. She                                                                    
supported the deletion of the language.                                                                                         
                                                                                                                                
Co-Chair Stoltze WITHDREW his OBJECTION.                                                                                        
                                                                                                                                
Representative Wilson OBJECTED.                                                                                                 
                                                                                                                                
A roll call vote was taken  on the motion to amend Amendment                                                                    
8.                                                                                                                              
                                                                                                                                
IN FAVOR: Gara, Kawasaki,  Holmes, Munoz,  Costello, Edgmon,                                                                    
Austerman                                                                                                                       
OPPOSED: Neuman, Thompson, Wilson, Stoltze                                                                                      
                                                                                                                                
The MOTION  PASSED (7/4). There being  NO further OBJECTION,                                                                    
the amendment to Amendment 8 was ADOPTED.                                                                                       
                                                                                                                                
There  being  NO  OBJECTION,  Amendment  8  as  amended  was                                                                    
ADOPTED.                                                                                                                        
                                                                                                                                
4:07:35 PM                                                                                                                    
                                                                                                                                
Representative Gara MOVED to ADOPT Amendment 22:                                                                                
                                                                                                                                
     OFFERED  BY:   Representatives  Gara,   Guttenberg  and                                                                    
     Kawasaki                                                                                                                   
     DEPARTMENT:    Education and Early Development                                                                             
     APPROPRIATION: Teaching and Learning Support                                                                               
     ALLOCATION:    Early Learning Coordination                                                                                 
     ADD:           $242,500 General Funds (1004)                                                                               
     EXPLANATION:   Restores    Governor's    FY14    budget                                                                    
     proposal  for  Parents  as Teachers,  a  cost-effective                                                                    
     Pre-Kindergarten effort for students  who do not attend                                                                    
     Pre-K  classes.  In  FY13,  legislation  (SB  182)  was                                                                    
     passed  to fund  this  effort with  three  years of  an                                                                    
     additional $3.3  million to  reach students  across the                                                                    
     state. That  fiscal note was  vetoed down  to $492,500.                                                                    
     This  amendment restores  funding  to  the base  amount                                                                    
     requested by the Governor in his FY14 budget.                                                                              
                                                                                                                                
Co-Chair Stoltze OBJECTED.                                                                                                      
                                                                                                                                
Representative  Gara communicated  that  Amendment 22  would                                                                    
restore the  governor's proposed funding  recommendation for                                                                    
the Parents as Teachers program.  He explained that a number                                                                    
of years earlier several legislators  had begun work to plan                                                                    
Pre-K  funding  that  was acceptable  to  the  Democrat  and                                                                    
Republican  parties.   He  relayed   that  there   had  been                                                                    
objections  in   the  past   related  to   classroom  Pre-K;                                                                    
therefore an out  of the classroom option  had been created.                                                                    
Parents  were  trained  to  work   with  their  children  on                                                                    
intellectual  development, which  put  them on  an equal  to                                                                    
advanced footing with peers  upon entrance into Kindergarten                                                                    
and  1st grade.  The Parents  as Teachers  program was  used                                                                    
statewide  in   many  conservative  states   throughout  the                                                                    
country. He  stated that the  program was proven to  work to                                                                    
improve intellectual capability and reading ability.                                                                            
                                                                                                                                
Representative Gara relayed that  the prior year legislation                                                                    
with  a three-year  $3.3 million  per year  fiscal note  had                                                                    
been  passed  that  would extend  the  Parents  as  Teachers                                                                    
program across the  state. The governor had  vetoed the bill                                                                    
and had reduced the fiscal note  to $492,000 for each of the                                                                    
three  years.  The  governor  included   the  funds  in  his                                                                    
proposed FY  14 budget and  it had  been cut by  $242,000 in                                                                    
subcommittee.  He  stressed   that  preparing  students  for                                                                    
learning  would  improve  student  and  school  success.  He                                                                    
listed classroom Pre-K, home learning,  and other as ways to                                                                    
increase improvement. He relayed  that the current increment                                                                    
would  only provide  service  for 300  to  400 families.  He                                                                    
believed  the   funding  should  be  part   of  the  state's                                                                    
education plan  to provide students with  tools for success.                                                                    
He stated that  if children did not  receive early education                                                                    
by 3 or 4 years of  age they would have trouble through high                                                                    
school,  more  money  would  be  spent  on  remediation  and                                                                    
special  education  services,  and  graduation  rates  would                                                                    
decline. He  communicated that the amendment  was modest and                                                                    
sought to restore the governor's proposed funding.                                                                              
                                                                                                                                
4:12:01 PM                                                                                                                    
                                                                                                                                
Representative Wilson spoke in  opposition to the amendment.                                                                    
She discussed  the Best Beginnings  and Parents  as Teachers                                                                    
programs. She stated that Best  Beginnings had over $230,000                                                                    
in  donations and  a $130,000  cash match.  She stated  that                                                                    
unfortunately  Parents  as  Teachers  did  not  have  funds;                                                                    
however, the program should be  able to locate other funding                                                                    
sources.  She furthered  that it  was becoming  increasingly                                                                    
necessary for  programs to look  for matching funds  and in-                                                                    
kind  matches.  She relayed  that  the  intent was  to  send                                                                    
Parents as Teachers the same message as Best Beginnings.                                                                        
                                                                                                                                
Representative Kawasaki  spoke in  support of  Amendment 22.                                                                    
He  referenced  a  supporting  document  for  the  amendment                                                                    
stating   that   the   highest   performing   children   had                                                                    
participated in  Parents as Teachers  and in  other programs                                                                    
such as  combined preschool  and/or center  based childcare.                                                                    
He believed that  the debate on the issue  should be focused                                                                    
on one program.                                                                                                                 
                                                                                                                                
Representative Gara  stated that  the committee  agreed that                                                                    
Parents  as  Teachers  worked   and  prepared  children  for                                                                    
success in greater  numbers. He noted that  the only dispute                                                                    
he had heard  was that the program needed  to locate private                                                                    
funding. He discussed that Best  Beginnings did receive some                                                                    
private funding  and had a  limited budget  of approximately                                                                    
$900,000.  He stressed  that the  people running  Parents as                                                                    
Teachers  were busy  educating  kids and  did  not have  the                                                                    
extra  staff  to  locate  funding   that  was  probably  not                                                                    
available. He remarked  that it would be one  thing if there                                                                    
was  private money  available that  the program  was missing                                                                    
out on.  He stated that  the legislature tended to  fund the                                                                    
school  system  with  public  dollars.  He  hoped  committee                                                                    
members  would  recognize  that  the  money  would  lead  to                                                                    
success for many children.                                                                                                      
                                                                                                                                
4:15:23 PM                                                                                                                    
                                                                                                                                
A roll call vote was taken  on the motion to adopt Amendment                                                                    
22.                                                                                                                             
                                                                                                                                
IN FAVOR: Kawasaki, Holmes, Munoz, Gara                                                                                         
OPPOSED:   Neuman,  Thompson,   Wilson,  Costello,   Edgmon,                                                                    
Stoltze, Austerman                                                                                                              
                                                                                                                                
The MOTION FAILED (4/7).                                                                                                        
                                                                                                                                
4:16:14 PM                                                                                                                    
                                                                                                                                
Representative Gara MOVED to ADOPT Amendment 23:                                                                                
                                                                                                                                
     OFFERED BY: Representatives Gara, Guttenberg and                                                                           
     Kawasaki                                                                                                                   
     DEPARTMENT:    Education    and    Early    Development                                                                    
     APPROPRIATION: Teaching and Learning Support                                                                               
     ALLOCATION: Pre-Kindergarten Grants                                                                                        
     DELETE: $2,000,000 GF (1004) OTI                                                                                           
     ADD: $2,480,000 GF (1004)                                                                                                  
                                                                                                                                
     EXPLANATION:  This  amendment  restores $2  million  of                                                                    
     one-time  funding  to  the  base  budget  of  the  Pre-                                                                    
     Kindergarten  Grants  as  requested in  the  Governor's                                                                    
     FY14  budget proposal  it  also  restores the  $480,000                                                                    
     increment  requested  by the  Governor  in  this FY  14                                                                    
     budget.                                                                                                                    
                                                                                                                                
     In  2010   the  Commissioner   of  the   Department  of                                                                    
     Education stated  his intention  that this  310 student                                                                    
     pilot  project would  be expanded  upon  proof that  it                                                                    
     enhances  student achievement.  It has  been proven  to                                                                    
     enhance  learning in  a state  that ranks  45th in  the                                                                    
     nation in 4th grade reading levels.                                                                                        
                                                                                                                                
Representative Wilson OBJECTED.                                                                                                 
                                                                                                                                
Representative  Gara  explained  the  amendment  that  would                                                                    
restore Pre-K  funding to the governor's  proposed level. He                                                                    
stated that  a pilot  Pre-K program  had been  started three                                                                    
years earlier and the DEED  commissioner had relayed that if                                                                    
the  program  was  proven  to work  the  state  would  begin                                                                    
expanding  it  by approximately  $2  million  per year;  the                                                                    
pilot  program had  ended in  2012. He  shared that  roughly                                                                    
half of  the students  previously in  the bottom  quarter of                                                                    
standardized testing had advanced  out of the category after                                                                    
the first  half of  the year. He  detailed that  the program                                                                    
resulted in  almost a  doubling of  students testing  in the                                                                    
top   two   quarters.   He   stated   that   the   program's                                                                    
effectiveness had been proven.                                                                                                  
                                                                                                                                
Representative   Gara  furthered   that  the   governor  had                                                                    
requested an  additional $480,000 to  be added to  the prior                                                                    
year  funding  of $2  million.  He  opined that  the  number                                                                    
should be  higher, but he  was satisfied with  the increment                                                                    
as  long  as  the  program   continued  to  be  expanded  to                                                                    
additional  families going  forward. He  listed benefits  of                                                                    
the program  including higher  graduation, college,  and job                                                                    
rates. He shared  that students were also less  likely to be                                                                    
incarcerated in later  years and were more likely  to earn a                                                                    
higher  wage upon  graduation. He  relayed that  the current                                                                    
Pre-K  program served  approximately 2  percent of  eligible                                                                    
children  in the  state; the  national  average (outside  of                                                                    
Head  Start)  was  28  percent. He  stressed  that  the  low                                                                    
percentage was part of the  reason graduation rates were low                                                                    
in the  state. He  stated that  the additional  $480,000 was                                                                    
not a substantial sum of  money and emphasized the program's                                                                    
success.                                                                                                                        
                                                                                                                                
4:20:10 PM                                                                                                                    
                                                                                                                                
Representative   Wilson  wondered   whether  the   program's                                                                    
results were  proven. She discussed testing  the students in                                                                    
Kindergarten  through third  grades; DEED  planned to  begin                                                                    
tracking the  current Pre-K  students. She  wondered whether                                                                    
Pre-K children  were actually reading at  higher levels than                                                                    
others in  second or third  grade. She relayed that  six out                                                                    
of the  eight programs were Head  Start; five out of  six of                                                                    
the programs  that received the  first three years  would be                                                                    
receiving two additional years.  She expected that the state                                                                    
would  look   at  different  types  of   Pre-K  programs  to                                                                    
determine  which provided  the  most benefit  for the  money                                                                    
spent.  She  discussed  other  options  apart  from  funding                                                                    
current programs with additional money.                                                                                         
                                                                                                                                
Representative Wilson  relayed that  the $2  million funding                                                                    
had been changed to a  one-time increment in the DEED budget                                                                    
subcommittee process.  She emphasized that the  grants would                                                                    
end  the following  year. She  wanted to  ensure the  grants                                                                    
were funding  all types of  programs including  private pre-                                                                    
schools.  She stated  that private  pre-schools were  funded                                                                    
through  the Department  of Health  and Social  Services for                                                                    
one-income  families who  may not  qualify  for Head  Start.                                                                    
She stressed that a pilot  project should be done throughout                                                                    
the state  to be fair  and to determine programs  that work.                                                                    
She opined that  it was not fair for a  program that had not                                                                    
received  three years  of state  funding to  compete with  a                                                                    
program that  had. She  reiterated that  the state  would be                                                                    
tracking the programs to determine their results.                                                                               
                                                                                                                                
Representative  Munoz asked  whether the  entities currently                                                                    
using  the  funds would  be  able  to  apply for  funds  and                                                                    
receive consideration.                                                                                                          
                                                                                                                                
Representative Wilson  replied that  the grant went  for one                                                                    
more year and that  entities currently receiving funds would                                                                    
receive slightly less  funding; how it appeared  would be up                                                                    
to  the  department.  She  hoped  that  programs  which  had                                                                    
already received four years of  funding would see a decrease                                                                    
and would not be grantees the following year.                                                                                   
                                                                                                                                
4:23:29 PM                                                                                                                    
                                                                                                                                
Representative Kawasaki  spoke in support of  the amendment.                                                                    
He  referenced  page  2  of the  Amendment  23  package.  He                                                                    
pointed  to  frequent  confusion  between  various  programs                                                                    
including Head Start, Best  Beginnings, early education, and                                                                    
private  Pre-K  schools.  He   communicated  that  DEED  had                                                                    
relayed that  no student  attended both a  Pre-K and  a Head                                                                    
Start class. He emphasized that  when making a commitment to                                                                    
education, a  one-time increment was not  sufficient. He was                                                                    
in favor of restoring the governor's funding increment.                                                                         
                                                                                                                                
Representative  Holmes  spoke  against  the  amendment.  She                                                                    
stated  that  she was  a  huge  believer in  education.  She                                                                    
relayed that she had supported  reinstating some funding for                                                                    
the Best  Beginnings and Parents  as Teachers  programs. She                                                                    
referred  to   the  legislature's  process  of   working  to                                                                    
determine how  to continue  core services  during a  time of                                                                    
potential budget deficits. She  believed in Pre-K and opined                                                                    
that  the   current  budget  would  allow   the  program  to                                                                    
continue, while  enabling the legislature to  analyze how it                                                                    
would continue to fund K-12 education.                                                                                          
                                                                                                                                
4:26:27 PM                                                                                                                    
                                                                                                                                
Representative   Wilson   followed  up   on   Representative                                                                    
Kawasaki's remarks and stated  there were different children                                                                    
in the Head  Start programs because it was  all one program.                                                                    
She elaborated that the department  did not track Parents as                                                                    
Teachers or  Best Beginnings as Pre-K  programs. Her concern                                                                    
about duplication  related to  programs that  the department                                                                    
used  essentially  as  block  grants,  which  had  not  been                                                                    
tracked in  the past.  She noted  that tracking  would begin                                                                    
for programs including Parents as Teachers.                                                                                     
                                                                                                                                
Representative    Gara   believed    there   was    a   huge                                                                    
misunderstanding about  the program. He communicated  that a                                                                    
portion of the students used  some Head Start services (e.g.                                                                    
screening, health,  and other).  He disputed  the impression                                                                    
that  many  of the  children  were  attending a  Head  Start                                                                    
classroom.  He   stated  that   children  needed   to  enter                                                                    
Kindergarten  ready to  learn  if the  goal  was to  improve                                                                    
school  outcomes and  to  save money  in  the long-term.  He                                                                    
believed it  was a problem  that one-fourteenth  of Alaska's                                                                    
children  were  receiving  Pre-K compared  to  the  national                                                                    
average.                                                                                                                        
                                                                                                                                
A roll call vote was taken  on the motion to adopt Amendment                                                                    
23.                                                                                                                             
                                                                                                                                
IN FAVOR: Edgmon, Gara, Kawasaki                                                                                                
OPPOSED: Holmes, Munoz,  Neuman, Thompson, Wilson, Costello,                                                                    
Austerman, Stoltze                                                                                                              
                                                                                                                                
The MOTION FAILED (3/8).                                                                                                        
                                                                                                                                
Representative Gara WITHDREW Amendment 24.                                                                                      
                                                                                                                                
4:29:50 PM                                                                                                                    
                                                                                                                                
Representative Gara MOVED to ADOPT Amendment 25:                                                                                
                                                                                                                                
     OFFERED  BY:   Representatives  Gara,   Guttenberg  and                                                                    
     Kawasaki                                                                                                                   
                                                                                                                                
     DEPARTMENT:    Health      and     Social      Services                                                                    
     APPROPRIATION: Children's Services                                                                                         
     ALLOCATION:    Infant Learning Program Grants                                                                              
     ADD:           $400,000 General Fund/Mental Health                                                                         
     (1037)                                                                                                                     
     EXPLANATION:   Restores    Governor's    FY14    budget                                                                    
     proposal   The   Infant   Learning   Program   provides                                                                    
     screening, evaluation  and early  intervention services                                                                    
     for  children  ages   0·3  with  developmental  delays.                                                                    
     Services  provided  support  rather than  supplant  the                                                                    
     natural  care-giving roles  of families,  and providers                                                                    
     seek to promote a family's autonomy.                                                                                       
                                                                                                                                
Vice-Chair Neuman OBJECTED.                                                                                                     
                                                                                                                                
Representative  Gara communicated  that the  amendment would                                                                    
restore  funding  for the  Infant  Learning  Program to  the                                                                    
governor's proposed  level of $400,000.  He shared  that the                                                                    
program  targeted   children  with  hearing   and/or  visual                                                                    
disabilities that a parent may  not be aware of. The program                                                                    
provided  services to  children upon  diagnosis in  order to                                                                    
prevent  significant developmental  delays.  He stated  that                                                                    
the  cost  of  the  program  was  minimal  compared  to  the                                                                    
substantial  results   it  achieved.   He  pointed   to  the                                                                    
importance  of identifying  Fetal Alcohol  Syndrome, Autism,                                                                    
and other in  the early years. He  furthered that addressing                                                                    
the issues early on would save money in the long-term.                                                                          
                                                                                                                                
4:31:21 PM                                                                                                                    
                                                                                                                                
Vice-Chair Neuman  spoke in opposition to  the amendment. He                                                                    
referenced line  31 of a  LFD budget worksheet for  DHSS. He                                                                    
relayed that  the increment was  part of the Bring  the Kids                                                                    
Home program.  He noted that  a portion of funding  had been                                                                    
reduced  in the  governor's  budget. He  pointed to  various                                                                    
increments  for   the  Infant  Learning   Program  including                                                                    
$175,000  for maintenance  and services,  $25,000 for  early                                                                    
intervention,  $1,500,000  for  child abuse  prevention  and                                                                    
treatment,  $80,000 for  positive parenting,  and $4,485,000                                                                    
for other  programs. He stated that  the budget subcommittee                                                                    
had  worked  to  spread  out   [funding  cuts]  as  much  as                                                                    
possible.  He mentioned  that another  committee member  was                                                                    
looking  at  Infant  Learning  Programs  in  the  amount  of                                                                    
$7,750,000. He stated that the decrease was small.                                                                              
                                                                                                                                
Vice-Chair  Neuman stressed  the importance  of reigning  in                                                                    
some of  the budgets in  order to prevent  continued growth.                                                                    
He remarked  that a  significant amount  of other  money was                                                                    
going into the programs.                                                                                                        
                                                                                                                                
Representative  Gara understood  the  difficulty facing  the                                                                    
subcommittee chair. He believed  the state's revenue outlook                                                                    
should be able to support the  funding for items such as the                                                                    
Infant Learning Program.                                                                                                        
                                                                                                                                
4:34:14 PM                                                                                                                    
                                                                                                                                
A roll call vote was taken  on the motion to adopt Amendment                                                                    
25.                                                                                                                             
                                                                                                                                
IN FAVOR: Gara, Kawasaki                                                                                                        
OPPOSED: Munoz, Neuman,  Thompson, Wilson, Costello, Edgmon,                                                                    
Holmes, Stoltze, Austerman                                                                                                      
                                                                                                                                
The MOTION FAILED (2/9).                                                                                                        
                                                                                                                                
Representative Gara MOVED to ADOPT Amendment 26:                                                                                
                                                                                                                                
     OFFERED  BY:   Representatives  Gara,   Guttenberg  and                                                                    
     Kawasaki                                                                                                                   
     DEPARTMENT:    Education and Early Development                                                                             
     APPROPRIATION: K-12 Support                                                                                                
     ALLOCATION:    Foundation Program                                                                                          
                                                                                                                                
     ADD:  New   Language  Section:   Sec.  14(b)   The  sum                                                                    
     of$60,000,000 is appropriated from  the general fund to                                                                    
     the Department  of Education  and Early  Development to                                                                    
     be distributed  as state aid to  districts according to                                                                    
     the   average  daily   membership  for   each  district                                                                    
     adjusted under  AS 14.17.41O(b)(l)(A) -(D) for  each of                                                                    
     the fiscal  years ending June  30,2014; June  30, 2015;                                                                    
     and June 30,2016.                                                                                                          
                                                                                                                                
     Renumber sections accordingly.                                                                                             
                                                                                                                                
     ADD:  Intent   Language:  It  is  the   intent  of  the                                                                    
     legislature  that  the  FY15  and  FY16  budgets  shall                                                                    
     include $40,000,000 increments in  each year also to be                                                                    
     distributed as state aid to  districts according to the                                                                    
     average  daily membership  for  each district  adjusted                                                                    
     under AS 14.17.4 I O(b)(I)(A)  -(D) so schools can plan                                                                    
     their budgets.                                                                                                             
                                                                                                                                
     EXPLANATION:  This FY14  increment will  avoid educator                                                                    
     and  staff  cuts,  which  have  been  seen  in  Mat-Su,                                                                    
     Anchorage,    Kodiak,   Juneau    and   other    Alaska                                                                    
     communities. It will allow for  the replacement of lost                                                                    
     education staff over the past two years.                                                                                   
                                                                                                                                
     The  intent   language  will  allow   school  classroom                                                                    
     funding  to  keep up  with  inflation,  and will  allow                                                                    
     schools to  plan their budgets  for the coming  year as                                                                    
     was intended with forward funding of education costs.                                                                      
                                                                                                                                
Co-Chair Stoltze OBJECTED.                                                                                                      
                                                                                                                                
Representative Gara  addressed the amendment. He  relayed it                                                                    
was  his  only amendment  that  did  not  try to  restore  a                                                                    
governor's  proposal. He  explained that  the amendment  was                                                                    
aimed at reversing three years  of statewide school staffing                                                                    
cuts.  He furthered  that funds  would be  distributed under                                                                    
the Base  Student Allocation (BSA)  formula; the  goal would                                                                    
be $60  million the first  year and a $40  million increment                                                                    
in  each of  the following  two  years. The  first year  was                                                                    
intended to make  up for some of the losses  and would allow                                                                    
schools  to hire  back some  of the  lost staff.  He relayed                                                                    
that  over 200  staff had  been lost  in Anchorage  over the                                                                    
past three years; there was a  proposal to cut over 200 more                                                                    
the  following year.  He pointed  to  various proposed  cuts                                                                    
including 30 teacher positions  in Fairbanks; Juneau schools                                                                    
had lost  over 10 percent  of its staff and  additional cuts                                                                    
were  proposed  for  the following  year;  Kenai  and  Lower                                                                    
Kuskokwim had lost  staff and more cuts  were proposed; Mat-                                                                    
Su  student   population  had   increased,  but   staff  had                                                                    
decreased; the  same was true  for Kodiak,  Northwest Arctic                                                                    
Borough, Chugach, Nome, Ketchikan, and other.                                                                                   
                                                                                                                                
Representative Gara relayed that  the amendment was intended                                                                    
to reduce  the cuts.  He stressed  that vibrant  schools and                                                                    
students ready to  enter the workforce were  not produced by                                                                    
reducing  teacher positions.  He agreed  that the  state had                                                                    
invested  a significant  amount  of money  into its  schools                                                                    
over the years; however, claims  that the state was spending                                                                    
record funding  on schools counted  money that could  not be                                                                    
used in  classrooms. He  furthered that  when money  for the                                                                    
Teachers' Retirement  System (TRS) and  pupil transportation                                                                    
were  backed   out,  according  to  a   Legislative  Finance                                                                    
Division  report,  the  state  was  approximately  $110  per                                                                    
student behind where it had  been three years earlier in per                                                                    
student  funding  (assuming   the  Federal  Reserve  Board's                                                                    
estimate of  1.8 percent inflation for  the following year).                                                                    
He continued  that schools had  to pay for  health insurance                                                                    
rates that  were rising quicker  than inflation.  He relayed                                                                    
that the amendment was the  best attempt to bring funding to                                                                    
higher  levels   for  long-term  planning.  He   pointed  to                                                                    
families  discussing  moving  from the  state  because  they                                                                    
believed there was a lack of commitment to school funding.                                                                      
                                                                                                                                
4:40:03 PM                                                                                                                    
                                                                                                                                
Co-Chair Austerman asked about the  $60 million in FY 14 and                                                                    
$40 million in  FY 15 and FY 16. He  wondered if the numbers                                                                    
compounded each  year. Representative  Gara replied  that it                                                                    
would  be $60  million  the  first year  and  a $40  million                                                                    
increment in both FY 15 and FY 16.                                                                                              
                                                                                                                                
Co-Chair Austerman  asked for clarification on  the numbers.                                                                    
He asked  if the cost would  be $60 million the  first year,                                                                    
$100 million the second year,  and $140 million in the third                                                                    
year.  Representative Gara  replied in  the affirmative.  He                                                                    
elaborated that the  funding would be aimed  at keeping pace                                                                    
with inflation and health insurance costs.                                                                                      
                                                                                                                                
4:41:34 PM                                                                                                                    
                                                                                                                                
A roll call vote was taken  on the motion to adopt Amendment                                                                    
26.                                                                                                                             
                                                                                                                                
IN FAVOR: Gara, Kawasaki                                                                                                        
OPPOSED:   Neuman,  Thompson,   Wilson,  Costello,   Edgmon,                                                                    
Holmes, Munoz, Austerman, Stoltze                                                                                               
                                                                                                                                
The MOTION FAILED (2/9).                                                                                                        
                                                                                                                                
4:42:31 PM                                                                                                                    
                                                                                                                                
Representative Kawasaki MOVED to ADOPT Amendment 27:                                                                            
                                                                                                                                
     OFFERED BY: Representatives Gara, Guttenberg and                                                                           
     Kawasaki                                                                                                                   
                                                                                                                                
     DEPARTMENT:    Labor and Workforce Development                                                                             
     APPROPRIATION: Business Partnerships                                                                                       
     ALLOCATION:    Business Services                                                                                           
     ADD:           $250,000 STEP (1054)                                                                                        
     EXPLANATION:  This amendment restores 50% of the cut                                                                       
     to the State Training and Employment Program (STEP)                                                                        
     program. The STEP program is funded through a set-                                                                         
     aside from the Unemployment  Insurance Trust Fund. This                                                                    
     program  provides training  and  job  skills to  people                                                                    
     eligible  for unemployment  benefits to  help them  get                                                                    
     back to work in good-paying jobs.                                                                                          
                                                                                                                                
Co-Chair Stoltze OBJECTED.                                                                                                      
                                                                                                                                
Representative  Kawasaki explained  that Amendment  27 would                                                                    
restore 50 percent  of a cut made to the  State Training and                                                                    
Employment Program (STEP). He  detailed that the program was                                                                    
currently  funded through  unemployment insurance  receipts.                                                                    
He  understood that  the Unemployment  Insurance Trust  Fund                                                                    
was   solvent.  He   explained   that   STEP  ensured   that                                                                    
individuals  had  adequate  job  skills  to  account  for  a                                                                    
changing economy.  He furthered that the  program helped put                                                                    
people to  work who were  in need of  jobs. He spoke  to the                                                                    
importance   of  access   to  training   that  would   allow                                                                    
individuals to  obtain available jobs. He  noted that Alaska                                                                    
had been fortunate to weather  the fiscal storm occurring in                                                                    
the Lower 48 and had done so due to programs like STEP.                                                                         
                                                                                                                                
Representative Wilson remarked that  she would be interested                                                                    
in any  information that  showed the  increment was  used to                                                                    
put Alaskans back  to work; she did not believe  it did. She                                                                    
was concerned that much of  the funding had been used within                                                                    
labor unions  to train  their own  workers. She  shared that                                                                    
unions  had  flown their  members  to  conduct training  for                                                                    
individuals who  had gone  back to  school and  were looking                                                                    
for work. She believed some of  the items should be paid for                                                                    
with  union  dues.  She discussed  that  $500,000  had  been                                                                    
removed by the subcommittee  because the Department of Labor                                                                    
and Workforce  Development (DLWD)  was spending  faster than                                                                    
it was  recouping. She  shared that the  goal was  to ensure                                                                    
the funds were utilized to  put unemployed people to work or                                                                    
to help people obtain higher paying jobs.                                                                                       
                                                                                                                                
4:46:01 PM                                                                                                                    
                                                                                                                                
Representative  Gara believed  Representative Wilson  helped                                                                    
to relay  that the  money was  being used  to put  people to                                                                    
work.  He furthered  that the  department  and the  governor                                                                    
were working  to spend the  money on the most  efficient way                                                                    
to put  people to work. He  had no objection to  money being                                                                    
used  for  apprenticeship  programs  or  private  vocational                                                                    
education to  put people  to work.  He expressed  his desire                                                                    
for individuals  to receive the  best training  possible. He                                                                    
addressed  Representative  Wilson's   comment  about  unions                                                                    
paying  with their  dues and  elaborated that  Alaskans paid                                                                    
into  the   unemployment  system.   He  detailed   that  the                                                                    
unemployment  system  was  designed to  provide  funding  to                                                                    
individuals for  job training. He  emphasized that  the STEP                                                                    
program worked. He invited members  to speak with DLWD about                                                                    
using independent contractors for  training if they believed                                                                    
it was more  efficient. He concluded that  without the money                                                                    
fewer people would be put back to work.                                                                                         
                                                                                                                                
A roll call vote was taken  on the motion to adopt Amendment                                                                    
27.                                                                                                                             
                                                                                                                                
IN FAVOR: Gara, Kawasaki                                                                                                        
OPPOSED: Thompson, Wilson,  Costello, Edgmon, Holmes, Munoz,                                                                    
Neuman, Stoltze, Austerman                                                                                                      
                                                                                                                                
The MOTION FAILED (2/9).                                                                                                        
                                                                                                                                
4:48:33 PM                                                                                                                    
                                                                                                                                
Representative Gara MOVED to ADOPT Amendment 28:                                                                                
                                                                                                                                
     OFFERED BY:    Representatives Gara, Guttenberg and                                                                        
     Kawasaki                                                                                                                   
                                                                                                                                
     DEPARTMENT:    Alaska Court System                                                                                         
     APPROPRIATION: Therapeutic Courts                                                                                          
     ALLOCATION:    Therapeutic Courts                                                                                          
     ADD:           $1,165,000 General Fund/Mental Health                                                                       
     (1037)                                                                                                                     
     EXPLANATION:   This  amendment restores  the Governor's                                                                    
     FY14 budget  proposal for  base funding  of Therapeutic                                                                    
     Courts  operating  since  2001  in  Anchorage,  Bethel,                                                                    
     Fairbanks, Juneau and Ketchikan. It also funds the                                                                         
     Governor's   requested   FY14   increment   to   expand                                                                    
     Therapeutic Courts to Kenai and Palmer.                                                                                    
                                                                                                                                
Co-Chair Stoltze OBJECTED.                                                                                                      
                                                                                                                                
Representative  Gara   MOVED  to   AMEND  Amendment   28  by                                                                    
replacing the  funding request increment of  $1,165,000 with                                                                    
a  $689,000   increment.  There  being  NO   OBJECTION,  the                                                                    
amendment to Amendment 28 was ADOPTED.                                                                                          
                                                                                                                                
Co-Chair Stoltze  MAINTAINED his OBJECTION to  the motion to                                                                    
adopt Amendment 28.                                                                                                             
                                                                                                                                
Representative  Gara  spoke  to  amended  Amendment  28.  He                                                                    
explained that the Court System  was not ready to expand the                                                                    
Therapeutic Court  System model  to Kenai  and Homer  in the                                                                    
current  year as  the  contractors and  staff  had not  been                                                                    
obtained at present; therefore,  the requested increment had                                                                    
been reduced.  The amended  amendment would  restore funding                                                                    
to  the  prior year's  level  for  the existing  therapeutic                                                                    
courts   in  Juneau,   Ketchikan,  Fairbanks,   Bethel,  and                                                                    
Anchorage. He  pointed to a population  with substance abuse                                                                    
problems, mental  illness, and  other. The  program provided                                                                    
"tough love" for individuals. He  furthered that the program                                                                    
required individuals to appear in  court once a week to show                                                                    
they   were  following   education,  job   training,  mental                                                                    
illness,  or substance  abuse  treatment plans.  Individuals                                                                    
who  did  not  follow  their plans  were  removed  from  the                                                                    
program and sent to jail.                                                                                                       
                                                                                                                                
Representative Gara shared that  criminals not going through                                                                    
the therapeutic  court program had  a 39  percent recidivism                                                                    
rate; however, the  recidivism rate was one-third  of the 39                                                                    
percent  for  individuals   going  through  the  therapeutic                                                                    
courts after one year. He  emphasized that two-thirds of the                                                                    
people had  reduced crimes. He  stated that the  program had                                                                    
existed for  many years and  that it worked pretty  well. He                                                                    
elaborated  that   it  was  not  possible   to  always  cure                                                                    
individuals  with substance  abuse  problems, mental  health                                                                    
disorders, and  other. He furthered  that the  program saved                                                                    
prison and law enforcement costs;  the program put people to                                                                    
work instead  of in jail. He  stated that there was  no such                                                                    
thing as  a 100  percent success rate,  but he  believed the                                                                    
numbers  were  better  than  those   in  the  Department  of                                                                    
Corrections.  He noted  that criminals  convicted of  sexual                                                                    
abuse were  not eligible for  the program. Low  level crimes                                                                    
and  offences  such  as  a  third  DUI  [Driving  Under  the                                                                    
Influence] qualified an individual for the program.                                                                             
                                                                                                                                
4:53:45 PM                                                                                                                    
                                                                                                                                
Co-Chair  Stoltze discussed  that  the  reduced funding  was                                                                    
related  to a  disappearance  of federal  funds. He  relayed                                                                    
that the Court System had  indicated it would pursue funding                                                                    
elsewhere. He stated that it  had not been possible to reach                                                                    
a  compromise during  the  budget  subcommittee process.  He                                                                    
furthered that  the system had been  receiving federal money                                                                    
that had  not been reflected  in its budget. He  stated that                                                                    
the issue was  problematic and that the courts  did not have                                                                    
the Capital Improvement Project  (CIP) receipt authority. He                                                                    
explained that  the receipt authority  had been  inserted in                                                                    
the  budget  in  the  event  that  federal  funds  could  be                                                                    
located. He elaborated  that if the issue  was critical they                                                                    
would find  the funds in  other locations. He  stressed that                                                                    
the  primary  issue  was  a  loss  of  federal  funding  and                                                                    
believed there  was a non-acceptance  from the  Court System                                                                    
on the  issue. He  remarked that  discussion with  the Court                                                                    
System had been limited and that  it had not been engaged in                                                                    
locating an alternative solution.                                                                                               
                                                                                                                                
4:56:40 PM                                                                                                                    
                                                                                                                                
Representative Kawasaki  spoke in support of  the amendment.                                                                    
He believed  that success of  the therapeutic  court program                                                                    
had  been seen.  He addressed  the issue  of federal  versus                                                                    
state  funds  and  discussed the  legislature's  process  of                                                                    
weighing the  importance of items  and determining  what was                                                                    
most effective going  forward. He pointed to  an ISER report                                                                    
accompanying  the  budget  amendments (copy  on  file)  that                                                                    
showed   recidivism  rates   of  comparison   offenders  and                                                                    
graduates of  the program. He  stressed that  the recidivism                                                                    
rates of those  who underwent the program  were roughly half                                                                    
those of non-therapeutic court  graduates. He expounded that                                                                    
fewer individuals in prison made  the program economical. He                                                                    
emphasized  that the  state  spent an  average  of $135  per                                                                    
prisoner  in  the  corrections  system.  He  reiterated  the                                                                    
effectiveness  of the  program and  believed smaller  budget                                                                    
growth  in  other  agencies could  potentially  occur  as  a                                                                    
result.                                                                                                                         
                                                                                                                                
Representative Gara provided  a wrap up on  Amendment 28. He                                                                    
understood that  reduced federal  funding was a  reality and                                                                    
that the state would need to  decide which items to fund. He                                                                    
stated items that did not make  a difference in the lives of                                                                    
residents   included  federal   overreach  or   bad  policy;                                                                    
however, the  state should not blame  the federal government                                                                    
for  taking  away  funds  from  something  that  worked.  He                                                                    
stressed  that  the  state  needed  to  decide  how  to  run                                                                    
successfully.  He  was  positive there  would  be  increased                                                                    
costs in  the Alaska  Psychiatric Institute (API),  the jail                                                                    
system and other if the  therapeutic program was not funded.                                                                    
He believed the program provided  a much cheaper way to deal                                                                    
with a  problem of abuse  and violence. He  accentuated that                                                                    
the  program reduced  violence and  institutionalization and                                                                    
saved money.                                                                                                                    
                                                                                                                                
5:00:12 PM                                                                                                                    
                                                                                                                                
Co-Chair Stoltze remarked that that  there was no blaming of                                                                    
the federal government for the  reduced funding, but that it                                                                    
was a reality that needed to be acknowledged.                                                                                   
                                                                                                                                
A roll  call vote was taken  on the motion to  adopt amended                                                                    
Amendment 28.                                                                                                                   
                                                                                                                                
IN FAVOR: Gara, Kawasaki                                                                                                        
OPPOSED:  Wilson, Costello,  Edgmon, Holmes,  Munoz, Neuman,                                                                    
Thompson, Austerman, Stoltze                                                                                                    
                                                                                                                                
The MOTION FAILED (2/9).                                                                                                        
                                                                                                                                
Representative Gara MOVED to ADOPT Amendment 29:                                                                                
                                                                                                                                
     OFFERED  BY:   Representatives  Gara,   Guttenberg  and                                                                    
     Kawasaki                                                                                                                   
                                                                                                                                
     DEPARTMENT:    Health and Social Services                                                                                  
     APPROPRIATION: Behavioral Health                                                                                           
     ALLOCATION:    Unallocated Reduction                                                                                       
     ADD:           $8,368,800 General Funds (1004)                                                                             
     EXPLANATION:   Restores    Governor's    FY14    budget                                                                    
     proposal  for Behavioral  Health  services and  grants.                                                                    
     The Division of Behavioral  Health serves Alaskans in a                                                                    
     variety  of important  ways, by  acting to:  1) Prevent                                                                    
     and treat  mental health  conditions; 2)  Help Alaskans                                                                    
     with      mental      illness      avoid      long-term                                                                    
     institutionalization  or  jai1;  3)  Transition  people                                                                    
     from   illness   to  productivity,   including   stable                                                                    
     housing;  4) Treat  Alaskans willing  to resolve  their                                                                    
     substance abuse problems, and  reduce waiting lists for                                                                    
     this  treatment;  5)  Provide early  intervention  with                                                                    
     mental health problems so they  are caught early, don't                                                                    
     grow, can be treated, and  harm and illness are avoided                                                                    
     or minimized.  6) Address and  prevent the  epidemic of                                                                    
     suicide,  particularly in  rural  Alaska.  7) Fund  the                                                                    
     Alaska Psychiatric Institute.  8) Provide Fetal Alcohol                                                                    
     Syndrome support.                                                                                                          
                                                                                                                                
Co-Chair Stoltze OBJECTED.                                                                                                      
                                                                                                                                
Representative  Gara  explained   that  Amendment  29  would                                                                    
restore  $8.3  million  of  behavioral  health  funding.  He                                                                    
acknowledged the challenge that  faced the DHSS subcommittee                                                                    
in sifting through  a difficult budget. He  relayed that the                                                                    
department  had communicated  there would  be close  to $8.3                                                                    
million  less  in services  to  people  with FAS,  substance                                                                    
abuse problems,  autism, mental health problems,  and other.                                                                    
He  discussed   that  treatment  of  the   various  problems                                                                    
prevented   individuals    from   becoming    homeless   and                                                                    
institutionalized   at  API   or   other.   He  pointed   to                                                                    
significant  public  testimony  that the  funding  had  kept                                                                    
families together and people off the streets.                                                                                   
                                                                                                                                
Representative  Gara  looked  forward to  meeting  over  the                                                                    
interim  to look  at programs  that did  not work;  however,                                                                    
there was  no evidence  that the behavioral  health services                                                                    
were wasteful. He stated that  on the contrary, the services                                                                    
were  underfunded.  He  referred   to  testimony  by  agency                                                                    
employees that their entities had  been flat funded over the                                                                    
years.  He mentioned  Nugent's Ranch,  which provided  long-                                                                    
term alcoholism  care. The program's  prior facility  had 46                                                                    
beds;  however, the  new facility  served 26  people because                                                                    
funding was  disappearing (there was currently  only funding                                                                    
for 20 of the beds). He  pointed to waiting lists across the                                                                    
state  for  treatment  programs;  the  methadone  clinic  in                                                                    
Anchorage had a  priority for pregnant women,  but there was                                                                    
no  room for  other  addicts.  He observed  that  a lack  of                                                                    
treatment programs  would increase  crime on the  street. He                                                                    
stressed that  the amendment would  cut crime and  agony and                                                                    
would  keep people  off of  the street  and out  of homeless                                                                    
shelters  and would  keep families  together. He  emphasized                                                                    
that the governor had included  $3 million in grant money in                                                                    
his  proposed budget  in  order to  serve  the shortfall  in                                                                    
funding over the upcoming three years.                                                                                          
                                                                                                                                
5:05:50 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Neuman understood  the  passion  related to  the                                                                    
issue.  He  explained that  the  prior  year $9  million  in                                                                    
additional money had been included  in the DHSS budget; $700                                                                    
[thousand]  of  the  amount had  been  appropriated  towards                                                                    
programs   and   $8.3    million   had   been   unallocated.                                                                    
Consequently  the  $8.3 million  had  been  pulled from  the                                                                    
budget.  He emphasized  that services  to  programs had  not                                                                    
been  cut.  He  furthered  that the  legislature  worked  to                                                                    
provide for efficiencies that went  back to the department's                                                                    
commissioner.  He  shared  that  earlier  in  the  year  the                                                                    
Legislative Budget  and Audit Committee  had pulled  over $7                                                                    
million  from  DHSS  that the  department  had  worked  hard                                                                    
through  efficiencies  to  obtain.  As a  result,  the  DHSS                                                                    
subcommittee   had   created   a   new   allocation   titled                                                                    
Performance  Bonuses  and  had   appropriated  close  to  $4                                                                    
million  in   unrestricted  federal  receipts   through  the                                                                    
Children's Health Insurance  Program Reauthorization Act for                                                                    
performance  bonuses.  Other   language  had  been  included                                                                    
specifying  that  if  the commissioner  found  efficiencies,                                                                    
worked  hard, and  other that  the money  would be  directed                                                                    
back  to the  commissioner's office  instead of  being swept                                                                    
into the General Fund.                                                                                                          
                                                                                                                                
Vice-Chair Neuman emphasized that  the legislature was doing                                                                    
its  best to  ensure  that  the hard  work  provided by  the                                                                    
department    went   back    to    the   commissioner    for                                                                    
reappropriation  (the  legislature  would continue  to  have                                                                    
oversight on  the spending). He informed  the committee that                                                                    
the DHSS budget had grown  significantly in recent years and                                                                    
was currently  approximately $2.7 billion. He  detailed that                                                                    
the  total   reduction  to  the   FY  14  DHSS   budget  was                                                                    
approximately  $25  million  (less  than  0.1  percent).  He                                                                    
explained   that   the   behavioral  health   reduction   of                                                                    
$8,368,800 or  a 6.4 percent  reduction from  the governor's                                                                    
proposed behavioral health  budget; however, the unallocated                                                                    
reduction  could be  spread into  any allocation  within the                                                                    
division and  was not limited  to the grants  allocation. He                                                                    
expounded that the flexibility  would allow the commissioner                                                                    
the ability to  absorb the money more  evenly throughout the                                                                    
department.                                                                                                                     
                                                                                                                                
Vice-Chair  Neuman  addressed  how  the  cuts  would  impact                                                                    
behavioral  health  grantees  in  FY 14.  The  budget  would                                                                    
provide  approximately  $9  million in  general  funds  that                                                                    
could  be  carried  forward  into  FY  14.  He  stated  that                                                                    
depending on  how the department  used the funds,  there may                                                                    
be  no significant  impact  to  the grantees  in  FY 14.  He                                                                    
detailed that  there were about  $131 million  in behavioral                                                                    
health  appropriations.  He  stated   that  the  funds  were                                                                    
additional. He stressed that he  was not happy about cutting                                                                    
funding for  disabled children;  however, he  emphasized the                                                                    
need  for capturing  growth in  the budget.  He stated  that                                                                    
budgets would  continue to  grow if cuts  were not  made. He                                                                    
discussed the  need to reign  in funds in order  to allocate                                                                    
money to capital infrastructure projects.                                                                                       
                                                                                                                                
5:11:09 PM                                                                                                                    
                                                                                                                                
Representative  Munoz asked  if  the $8.3  million from  the                                                                    
prior year could be fully  appropriated to behavioral health                                                                    
services for FY 14.                                                                                                             
                                                                                                                                
Vice-Chair Neuman  clarified that $9 million  had been added                                                                    
in  FY  13;  $700,000  had  been  appropriated  to  specific                                                                    
programs   and   approximately   $8.3   million   had   been                                                                    
unallocated.  He explained  that  the $8.3  million was  the                                                                    
funding that would be reduced from the budget.                                                                                  
                                                                                                                                
Representative  Munoz wondered  whether the  money could  be                                                                    
expended FY  14. Vice-Chair Neuman  replied in  the negative                                                                    
and stated  that the funds had  been removed from the  FY 14                                                                    
budget.  He   added  that  a  one-time   decrement  was  not                                                                    
possible.                                                                                                                       
                                                                                                                                
Representative  Munoz restated  that she  was interested  in                                                                    
the one-time $9  million increment from the  prior year that                                                                    
was currently  $8.3 million. She wondered  whether the money                                                                    
could  be   appropriated  in   FY  14   or  if   there  were                                                                    
restrictions on the funds.                                                                                                      
                                                                                                                                
5:12:51 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Neuman  replied  that  $8.3  million  was  being                                                                    
removed from the budget.                                                                                                        
                                                                                                                                
Representative  Gara remarked  that it  was unclear  whether                                                                    
the $3 million  that was intended to cut  back waiting lists                                                                    
and  meet service  needs could  be used  to offset  the $8.3                                                                    
million reduction.  He furthered  that by removing  the $8.3                                                                    
million from  the base it  meant the increment would  not be                                                                    
present  the  following  year or  in  subsequent  years.  He                                                                    
continued that  the one-time money intended  to meet service                                                                    
needs could  be used  to replace the  $8.3 million,  but the                                                                    
money  would  not  be  available  the  following  year.  The                                                                    
department had conveyed  that the money would  be taken away                                                                    
from  services for  seriously mentally  ill and  emotionally                                                                    
disturbed. He  complimented Vice-Chair  Neuman for  his work                                                                    
on  a complex  budget  and his  acknowledgment  of the  many                                                                    
existing needs.                                                                                                                 
                                                                                                                                
Representative Holmes  noted that  the issue  was difficult.                                                                    
She  believed the  one-time funding  was available  for use;                                                                    
therefore,  the  $8.3 million  had  been  taken out  of  the                                                                    
budget  because  the  one-time funding  was  available.  She                                                                    
clarified  that  because  of the  one-time  increment  there                                                                    
would  not  be  a  reduction in  funding.  She  referred  to                                                                    
discussions  with LFD  about the  possibility of  a one-time                                                                    
decrement  so that  the money  would automatically  be built                                                                    
back  into the  following  year's  budget. She  communicated                                                                    
that LFD had  relayed that the one-time  decrement would not                                                                    
work. She understood that there  was concern the money would                                                                    
not be appropriated in the  future, but she was committed to                                                                    
looking at  the issue the  following year. She  believed the                                                                    
cut  had been  made due  to  the one-time  funding that  was                                                                    
available to back-fill the decrease.                                                                                            
                                                                                                                                
Representative  Gara   referenced  a  memo  from   the  DEED                                                                    
commissioner and believed the  department was not certain it                                                                    
could use  more than $6 million  of the $9 million  that had                                                                    
been appropriated  to meet unmet  service needs. He  did not                                                                    
believe  it was  appropriate to  take the  money out  of the                                                                    
capital  budget  because it  had  been  appropriated for  an                                                                    
unmet  need for  people  with mental  illness and  substance                                                                    
abuse  problems.  He  stated that  because  it  was  unclear                                                                    
whether all of  the money could be used it  was unclear that                                                                    
there would be no cuts in services.                                                                                             
                                                                                                                                
5:18:00 PM                                                                                                                    
                                                                                                                                
A roll call vote was taken  on the motion to adopt Amendment                                                                    
29.                                                                                                                             
                                                                                                                                
IN FAVOR: Gara, Kawasaki                                                                                                        
OPPOSED: Costello, Edgmon,  Holmes, Munoz, Neuman, Thompson,                                                                    
Wilson, Austerman, Stoltze                                                                                                      
                                                                                                                                
The MOTION FAILED (2/9).                                                                                                        
                                                                                                                                
Representative Gara MOVED to ADOPT Amendment 30:                                                                                
                                                                                                                                
     OFFERED  BY:   Representatives  Gara,   Guttenberg  and                                                                    
     Kawasaki                                                                                                                   
                                                                                                                                
     DEPARTMENT:    University of Alaska                                                                                        
     APPROPRIATION: University of Alaska                                                                                        
     ALLOCATION:    Budget     Reductions    Additions     -                                                                    
     Systemwide                                                                                                                 
     ADD:           $2,000,000    General     Fund    (1004)                                                                    
     $2,000,000 Univ Rcpt (1048)                                                                                                
     EXPLANATION:   These funds  are intended to be  used by                                                                    
     the  University  of  Alaska to  fund  the  High  Demand                                                                    
     Program  requests.  This   unallocated  increment  will                                                                    
     allow the  University to determine which  programs will                                                                    
     be funded.                                                                                                                 
                                                                                                                                
Co-Chair Stoltze OBJECTED.                                                                                                      
                                                                                                                                
5:18:45 PM                                                                                                                    
                                                                                                                                
Representative  Kawasaki explained  that Amendment  30 would                                                                    
add $2 million  back into the University of  Alaska Board of                                                                    
Regents  budget request  specifically  to  fund high  demand                                                                    
programs.  He  furthered  that   a  number  of  the  program                                                                    
requests  were  to  support  specific  campus  accreditation                                                                    
needs  and   requirements.  He  pointed  to   mandatory  and                                                                    
comprehensive student  advising at the main  campuses and at                                                                    
the  College  of  Rural  and  Community  Development  as  an                                                                    
example. He pointed to the  need for students to graduate in                                                                    
a  timely  manner  and  detailed  that  the  university  had                                                                    
identified  the  need  as an  issue  needing  attention.  He                                                                    
stated  that  the  legislature had  indirectly  communicated                                                                    
that the university should pursue the issue.                                                                                    
                                                                                                                                
Representative  Kawasaki  relayed  that the  amendment  also                                                                    
addressed  other  high  demand program  requests.  He  cited                                                                    
examples  including  public-private  partnerships,  the  UAF                                                                    
nursing  program, the  UAF/UAA  clinical psychology  demand,                                                                    
construction and tribal management,  and CAMI. He pointed to                                                                    
support  for the  issues from  the  legislature and  private                                                                    
industry.   The  unallocated   increment  would   allow  the                                                                    
university to determine which programs would be funded.                                                                         
                                                                                                                                
5:22:03 PM                                                                                                                    
                                                                                                                                
Co-Chair  Austerman asked  if the  Board of  Regents request                                                                    
had been  in the governor's budget.  Representative Kawasaki                                                                    
did not know.                                                                                                                   
                                                                                                                                
Representative   Gara    clarified   that    the   increment                                                                    
represented a  portion of the  Board of Regent's  request on                                                                    
high demand programs. He elaborated  that the $2 million was                                                                    
the same as the governor's  proposed request, which had been                                                                    
aimed at  building operation. The  amendment would  take the                                                                    
same  $2  million  and  redirect   it  towards  high  demand                                                                    
classes.                                                                                                                        
                                                                                                                                
Representative Wilson  asked how much the  university budget                                                                    
had  grown from  the prior  year. She  wondered whether  the                                                                    
university had room  to fund the programs if it  chose to do                                                                    
so.                                                                                                                             
                                                                                                                                
Representative  Munoz replied  that the  overall growth  was                                                                    
$16 million  from FY 13  to FY 14  (half of the  amount came                                                                    
from  tuition  and the  other  half  was undesignated).  She                                                                    
detailed   that   the   governor's  proposed   request   for                                                                    
additional  funding   tied  to  operational  costs   of  new                                                                    
facilities  had been  reduced by  $2.3 million.  She relayed                                                                    
that the  subcommittee had  included language  that directed                                                                    
the  Board of  Regents  to fund  the particular  operational                                                                    
costs. The  $2.3 million  reduction was  a reduction  in one                                                                    
appropriation; in  the past, there  had been  seven separate                                                                    
appropriations    for   the    university.   The    multiple                                                                    
appropriations  had restricted  the university's  ability to                                                                    
locate  cost savings  across  the  system. The  subcommittee                                                                    
felt  that   the  reduction  had  been   the  most  flexible                                                                    
approach.                                                                                                                       
                                                                                                                                
Representative Wilson spoke in  opposition to the amendment.                                                                    
She  communicated that  the legislature  was  not trying  to                                                                    
micromanage  the university.  She  had  confidence that  the                                                                    
university  would  locate  funding   for  programs  that  it                                                                    
believed were in high demand.                                                                                                   
                                                                                                                                
5:25:04 PM                                                                                                                    
                                                                                                                                
Representative Kawasaki provided a  wrap up on Amendment 30.                                                                    
He reflected that  in the past the legislature had  met as a                                                                    
Committee  of the  Whole on  the university  budget and  had                                                                    
taken  a close  look  at  how the  regents  operate and  how                                                                    
college students  perform. He shared a  personal story about                                                                    
his father attending  the university. He stated  that it was                                                                    
necessary to change the way  business was done and to locate                                                                    
emergent  high demand  programs including  mining. He  noted                                                                    
that mining jobs were some  of the highest paying throughout                                                                    
the  state.   He  discussed  student  achievement   and  the                                                                    
importance of  tangible results  (i.e. diplomas).  He shared                                                                    
that  partnerships  with private  industry  was  one of  the                                                                    
underfunded  high demand  program  areas.  He discussed  the                                                                    
legislature's  desire   for  the  university  to   focus  on                                                                    
emergent  industries  including   health,  biomedicine,  and                                                                    
workforce  development in  fishing and  mining. He  stressed                                                                    
that the  university had  done a  significant number  of the                                                                    
things the  legislature had requested. He  stressed that the                                                                    
legislature  needed  to  ensure   that  the  university  had                                                                    
adequate resources necessary to accomplish its goals.                                                                           
                                                                                                                                
A roll call vote was taken  on the motion to adopt Amendment                                                                    
30.                                                                                                                             
                                                                                                                                
IN FAVOR: Gara, Kawasaki                                                                                                        
OPPOSED:  Edgmon, Holmes,  Munoz, Neuman,  Thompson, Wilson,                                                                    
Costello, Stoltze, Austerman                                                                                                    
                                                                                                                                
The MOTION FAILED (2/9).                                                                                                        
                                                                                                                                
Representative Kawasaki WITHDREW Amendment 31.                                                                                  
                                                                                                                                
5:28:19 PM                                                                                                                    
                                                                                                                                
Representative Kawasaki MOVED to ADOPT Amendment 32:                                                                            
                                                                                                                                
     OFFERED BY:    Representatives Gara and Kawasaki                                                                           
                                                                                                                                
     DEPARTMENT:    Commerce,    Community   and    Economic                                                                    
     Development                                                                                                                
     APPROPRIATION: Economic Development                                                                                        
     ALLOCATION:    Economic Development                                                                                        
     ADD:           If a Qualified Trade Association (QTA)                                                                      
     collects $2  million of  additional matching  funds not                                                                    
     currently  in  the budget  by  July  1, 2013  then  the                                                                    
     unexpended   and  unobligated   balance  of   the  FY14                                                                    
     appropriation  for Tourism  Marketing  Funding, not  to                                                                    
     exceed $13 million, is reappropriated  to the QT A as a                                                                    
     grant for  a tourism marketing program  approved by the                                                                    
     Department.                                                                                                                
                                                                                                                                
     EXPLANATION:   This  conditional   language  allows   a                                                                    
     Qualified Trade  Association (QTA), such as  the Alaska                                                                    
     Travel   Industry  Association,   the  opportunity   to                                                                    
     receive state funding set  aside for tourism marketing,                                                                    
     provided  that  the QTA  is  able  to raise  additional                                                                    
     funds  from the  travel industry.  If this  occurs, $13                                                                    
     million  of   the  $15  million  appropriated   to  the                                                                    
     Department   of   Commerce,  Community   and   Economic                                                                    
     Development  for  Tourism  Marketing  Funding  will  be                                                                    
     reappropriated to the QTA.                                                                                                 
                                                                                                                                
Co-Chair Stoltze OBJECTED.                                                                                                      
                                                                                                                                
Representative  Kawasaki explained  that in  past years  the                                                                    
Alaska  Travel Industry  Association  (ATIA) had  advertised                                                                    
for the  state; similar  to convention and  visitors bureaus                                                                    
in Fairbanks or Anchorage. He  stated that ATIA had received                                                                    
state funding because they had  been the state's advertising                                                                    
entity. He  communicated that two  years earlier  a proposal                                                                    
had been  made to bring  most of the advertising  money back                                                                    
"in-house" under  the Department of Commerce,  Community and                                                                    
Economic  Development (DCCED).  Amendment 31  would look  at                                                                    
whether the state should be  advertising as opposed to ATIA.                                                                    
The amendment  would also  ensure that  the state  was doing                                                                    
its due diligence related to  finances and to determine that                                                                    
any  qualified trade  organization wanting  to partner  with                                                                    
the  state  had "skin  in  the  game"  (i.e. $2  million  in                                                                    
matching funds). He  believed the private sector  had done a                                                                    
great job  showing that  it could  raise private  funds from                                                                    
groups  with  a  vested  interest  in  the  state's  tourism                                                                    
industry and also allowed them  some autonomy. The amendment                                                                    
supported  using  the  private  sector instead  of  a  state                                                                    
department for the advertising function.                                                                                        
                                                                                                                                
Representative  Costello spoke  against  the amendment.  She                                                                    
addressed the  amendment's language  related to  locating $2                                                                    
million  in  additional  matching funds.  She  believed  the                                                                    
issue was revisited every year.  She offered that $2 million                                                                    
could  be taken  from multiple  municipal revenue  locations                                                                    
including the $29.2  million in sales tax,  $26.7 million in                                                                    
lodging tax, $15.2 million in  dockage revenues, $32 million                                                                    
in commercial  passenger vessel tax,  $3.6 million  from the                                                                    
ocean   ranger  program,   $800,000   from  the   commercial                                                                    
passenger  vessel  environmental compliance,  $17.8  million                                                                    
from the Department  of Fish and Game  licensing tags, $18.4                                                                    
million  from the  funds the  AMHS collected  from visitors,                                                                    
$20.2  from  the  Alaska   Railroad  Corporation,  and  from                                                                    
passenger  gambling tax.  She stressed  that the  money from                                                                    
the  various  locations could  be  designated  if the  state                                                                    
chose to do  so; many items in the  budgets were designated.                                                                    
She  emphasized that  the tourism  industry did  not receive                                                                    
credit for revenue it brought to the state.                                                                                     
                                                                                                                                
Representative  Costello continued  to list  various sources                                                                    
that $2 million  could be located within  including the $5.7                                                                    
million vehicle rental tax, and  $3.5 million from corporate                                                                    
income tax.  She stated that  an argument heard  from people                                                                    
who were unsupportive of the  tourism industry and felt that                                                                    
the industry  did not carry  its weight was that  somehow it                                                                    
was not possible  to attribute the entire  revenue source to                                                                    
tourists.  She  furthered  that  7 out  of  the  12  revenue                                                                    
sources (she  had listed) that  were paid  to municipalities                                                                    
and  the state  would fully  cover  the amount  paid by  the                                                                    
state  for  tourism  marketing.   She  provided  an  example                                                                    
related to tipping  at a restaurant; an 11  percent tip sent                                                                    
a message  that the  waitress did a  poor job.  She stressed                                                                    
that 11 percent  of the total brought in was  the amount the                                                                    
state provided  for tourism  funding. She  communicated that                                                                    
many committee members had looked  for a more stable revenue                                                                    
source to prevent the topic from being revisited annually.                                                                      
                                                                                                                                
Representative   Costello  explained   that  the   marketing                                                                    
activities  had  been  brought  under  DCCED's  purview  and                                                                    
funding had  been reduced by  $1 million. She  was dedicated                                                                    
to educating  legislators about revenues  brought in  by the                                                                    
tourism industry.  She furthered  that the  tourism business                                                                    
was  competitive  in Alaska.  She  stated  that it  was  not                                                                    
reasonable  to   compare  the  industry  with   others.  For                                                                    
example, entities  did not own  the mountains  around Juneau                                                                    
and it was  not possible to tax based on  the mountains. She                                                                    
felt frustration  that the state  was not  more appreciative                                                                    
of   an  industry   that  provided   jobs  and   provided  a                                                                    
significant financial  return to  the state.  She emphasized                                                                    
that  tourism was  a  great  business to  get  into and  she                                                                    
appreciated the effort to allow QTA to market itself.                                                                           
                                                                                                                                
Co-Chair  Stoltze remarked  that  the  legislature would  be                                                                    
remiss  if  it  failed to  acknowledge  that  Representative                                                                    
Costello  was the  reason the  tourism  budget included  $15                                                                    
million.  He  thought  the  current  conversation  would  be                                                                    
characterized  negatively in  the  press.  He stressed  that                                                                    
Representative Costello  had fought  the battles  related to                                                                    
the tourism industry funding.                                                                                                   
                                                                                                                                
5:36:52 PM                                                                                                                    
                                                                                                                                
Representative  Gara explained  that the  amendment's intent                                                                    
was to  save money and  to get the tourism  marketing effort                                                                    
back into  the private sector. He  did not intend to  make a                                                                    
headline out of the issue.                                                                                                      
                                                                                                                                
Representative  Kawasaki expressed  that  his intention  was                                                                    
not to challenge other committee  members. He furthered that                                                                    
intent of the  amendment was to address  a policy discussion                                                                    
he  believed  the  legislature  should  have.  He  shared  a                                                                    
personal story  about his work history  beginning that began                                                                    
in tourism.  He emphasized that the  visitor industry played                                                                    
a  substantial   role  in  Fairbanks.  He   stated  that  he                                                                    
supported the visitor industry  100 percent. He communicated                                                                    
that  the  amendment  spoke  to  where,  how,  and  who  was                                                                    
advertising  on behalf  of the  state for  the state's  best                                                                    
interest.  He   had  not  been  supportive   of  moving  the                                                                    
advertising function from the  private industry to DCCED. He                                                                    
believed  any  qualified  trade  association  could  perform                                                                    
well.  He  reiterated  his  support  for  the  industry.  He                                                                    
pointed to international requests  from people interested in                                                                    
visiting the state.                                                                                                             
                                                                                                                                
5:40:47 PM                                                                                                                    
                                                                                                                                
A roll call vote was taken  on the motion to adopt Amendment                                                                    
32.                                                                                                                             
                                                                                                                                
IN FAVOR: Gara, Kawasaki                                                                                                        
OPPOSED: Holmes, Munoz,  Neuman, Thompson, Wilson, Costello,                                                                    
Edgmon, Austerman, Stoltze                                                                                                      
                                                                                                                                
The MOTION FAILED (2/9).                                                                                                        
                                                                                                                                
Co-Chair  Stoltze   MOVED  to  authorize  the   Division  of                                                                    
Legislative Finance  and Legislative Legal Services  to make                                                                    
technical  and  conforming  amendments  to  incorporate  the                                                                    
amendments adopted by the committee into a CS.                                                                                  
                                                                                                                                
Co-Chair Austerman recessed the  meeting until 9:00 a.m. the                                                                    
following day.                                                                                                                  
                                                                                                                                
5:42:11 PM                                                                                                                    
RECESSED UNTIL 9:00 A.M. MARCH 14, 2013                                                                                         

Document Name Date/Time Subjects
HB 65 HB 66 Amendments HB 65.pdf HFIN 3/12/2013 1:30:00 PM
HB 65
HB 66
HB 65 Kawasaki Amendment 8A.pdf HFIN 3/12/2013 1:30:00 PM
HB 65
HB 65 HB 66 Amendments ACTION.pdf HFIN 3/12/2013 1:30:00 PM
HB 65
HB 66